Is your food spending normal?
You might be one of those people who gets every meal out and uses your oven for storage.
Or you’re a frugalista who shops for the best deals in-store and online, stocks up on discount groceries, and whips up 40 inexpensive freezer meals in a day.
Whatever your style, here are some quick checks to see whether your spending is in line with the average Americans and — more importantly — whether it’s in line with your financial priorities:
1. Check your budget percentage.
According to the U.S. Bureau of Labor Statistics, Americans devote 11% and 15% of their budget to food each year.
If you’re sitting at the 15% mark, weekly food expenditures would look like this:
|Monthly After-Tax Income||Weekly Food Budget|
To figure out where you land in this table, take a look at the amount of money that hits your bank account each month. You can also pull out last year’s tax return and divide your annual take-home pay by 12.
2. Compute your budget through the USDA.
Did you know that the USDA publishes reports on the cost of food every single month?
I know. That sounds like an insanely . . . dull . . . read.
However, the report is actually a valuable tool for evaluating your food budget.
Each report is an easy-to-read, one-page chart that gives you four possible “eating plans” — Thrifty Plan, Low-Cost Plan, Moderate-Cost Plan, and Liberal Plan.
The footnotes in the report give you more details on what each plan is and how it’s determined, but the summary is this: Each plan reflects at-home food costs for healthy diets of meals and snacks.
Within each food plan are weekly food costs for the average person, broken down into age and gender groups.
Looking at the report for May of 2018 (the latest report), here are the calculations for the weekly budget for my family:
- Female (19 to 50 years): $37.90
- Male (19 to 50 years): $42.80
- Child (3 years): $23.70
- Thrifty Plan Weekly Family Food Budget: $104.40
- Female (19 to 50 years): $75.40
- Male (19 to 50 years): $84.90
- Child (3 years): $44.60
- Liberal Plan Weekly Family Food Budget: $204.90
Clearly, there’s a huge range in budget between Thrifty and Liberal. For my family of three, the Liberal Plan is nearly twice as much as the Thrifty Plan!
Keep in mind also that these numbers are for the country as a whole. If you live in an area that has far-from-average costs for produce, meat, dairy, etc., your numbers may look pretty different.
3. Now figure out what you’re actually spending.
If you’re not already tracking your spending on groceries, it might be time to start.
An easy way to approximate your food costs if you’re a credit card user is to visit your cardholder’s website. Many credit card sites these days allow you to fiddle around with online tools that report on how much you’ve spent on food, clothing, etc.
Sometimes these reports aren’t as accurate as you’d like, since your cardholder is guessing that your recent big expense at a supermarket was for food and not for that pricey prescription you picked up.
So, if you want just a quick, rough guess, check out your cardholder’s report. Otherwise, for more accuracy, download the last few months of your spending and do some custom calculations of your own. Or, even better, start taking notes from your groceries receipts and restaurant bills going forward.
Whatever your approach, take a good look at your numbers when you’re done.
The BLS found that approximately half of the money Americans spend on food is spent on away-from-home food.
That number is huge!
Remember . . . Ready-to-go food purchased outside of your home at a restaurant, deli, coffee shop, etc. tends to come with a massive markup over homemade food.
4. Determine your own ideal food budget.
At the end of the day, it may not matter if you’re spending less on food than the average American.
If you’re struggling financially or saving for a big goal, you need a budget that works specifically for you and your family.
So take an honest look at your financial goals. Then create an easy budget that doesn’t leave you in the red by the year’s end.
How much does your family spend on your groceries each month?
Updated after original publication in October 2016