After college, I had NO CLUE how much money I would need every month to feed myself.
I was in for a rude awakening when I realized that getting Chipotle for lunch Monday-Friday cost $200/month alone. Yikes!
I felt so frustrated that I wasn’t saving even though I had a legit salary. Student loans weren’t part of the picture for me, which is the best position to be in for saving money. But it just didn’t happen. I broke even for the first 6ish months out of school.
Money scared me. I was scared to look at my credit card statements and really look at where my money went. But when I did, I realized that money isn’t something to fear; we can control it and tell it where to go. That’s essentially what a budget does!
At 22, it was clear where I had to cut back on spending: bar hopping, taxis, clothes and food. That’s when I got into meal prep and kept track of my grocery budget.
Meal prepping helped me enjoy home cooked food more than takeout and helped me fall in love with cooking. Savings came pretty easy after that.
Unlike fixed expenses like rent, utilities and Netflix, a food budget is hard to nail down.
Think about all the factors:
- Where you live (and how much groceries typically cost in your region)
- Your income
- How much you need to eat to be full and satisfied
- Any dietary restrictions/preferences you may have (vegetarian, vegan, gluten-free etc)
- What supermarkets are convenient for you to get to
- How much you cook vs dine out or eat take out
- Your food priorities (eating only organic, trying to only eat “clean” etc)
You also have to decide if you want to include dining out or takeout is included in your food budget! It’s tough, but in this post I want to walk you through the three steps to take to get a solid idea of how much you should/can spend on food.
My original food budget (after I got my life together) looked something like this:
Groceries: $60/week | $240/mo
Restaurants: $40/week | $160/mo
Takeout: $30/mo (this wasn’t a weekly thing for me)
Total: $100/week | $450/mo
I used to include alcohol/bars in my food budget, but since I go out so rarely it’s just part of my “entertainment” budget now.
How does $450/month for a single person in New York City sound to you?
Keep in mind this was my budget when I lived alone in Manhattan, where food is more expensive than other places I’ve lived like a small town in Colorado. I also live with my partner now, and somehow we spend $500/month on food together including restaurants.
I don’t have dietary restrictions, I don’t care about buying organic (then my budget would have to be higher) and I eat most of my meals at home. When I do eat out, I don’t go to expensive places. My life is pretty sedentary, so I don’t need to eat as much food as, say, a professional basketball player! My store of choice is Key Foods or a chain store that’s similar, not health food specialty stores. I could probably buy cheaper groceries if I was willing to travel, but I don’t want to spend hours shlepping to stores in different boroughs and riding the subway just to pick up groceries! (I hate the subway. A lot.)
See how all of these factors matter?
I can’t say what the best/most ideal food budget is. But I CAN help you nail down one that’s realistic for you, your needs, your income and where you live. Let’s start with the most important question/step:
1. How much did you spend last month on food?
This is the easiest way to start nailing down a food budget.
You can easily review your food spending over the last month if you use a credit card by logging into your bank’s site and reviewing the last statement. Add up every charge from grocery stores, restaurants and takeout places. While doing this, you’ll really get to see how often you eat out vs. grocery shop and how the two compare.
If you don’t use a credit card, I recommend tracking your food spend (restaurants and grocery trips) for at least two weeks starting today – preferably weeks that are “normal” where you’re not traveling or hosting. Then you can double that amount and get a feel for how much you’re currently spending per month. Try keeping the receipts or keeping track of costs in the notes app on your phone.
If you use a budgeting app like Mint (that’s what I use) and your cards are connected to it, it’s even easier to get these totals right in the app by looking at your spending trends and history.
Here’s my restaurant spending from last month according to Mint. Definitely on the higher side since I took my mom and my boyfriend out to dinner for their birthdays!
When you have the total amount you spent on food last month, now you can evaluate it. Is it higher than you thought? Lower? What about your food spending habits could you change to spend less?
It might mean shopping at different stores, cooking more (and I can help you with that!) and changing your grocery shopping strategy in general.
If you want to learn how to shave $20 off your next grocery trip, you can download my free guide now and learn all my tips!
2. Test different weekly budgets to find out what’s realistic.
Now that you know how much you spend without trying to cut back, how much do you want to spend? If you learn you spent $600 on food last month, do you think $300 would be realistic? (I don’t).
The best way to find out where that line is between lean but comfortable and completely unrealistic is to test different budgets each week.
If you’re currently spending $200/week, try to cut it back to $150 for the next week. If that’s easy, try doing $100/week.
By putting your new budget to work, you’ll quickly find out what’s doable for you and what’s not. This is exactly what I did when trying to cut back on food spending and it worked well! Instead of dramatically cutting back, do it in steps.
Within three or four weeks, you’ll find your new conscious comfort zone.
3. Track your spending with an app or cash envelopes.
It’s fairly easy to SET a budget. It’s sticking to it that’s the hard part!
I used to be someone who NEVER looked at credit card statements or my Mint app even though I had been using it for years (since 2014). The habit you have to form to be able to stick to your grocery budget is to consistently check and track your spending.
There are lots of ways to do this. I suggest Mint (I’m not affiliated, just a long time customer) and only using credit cards to accurately track your food spending. You can set a budget and Mint will alert you when you’re close to hitting it, or if you’ve already gone over.
If you’re not into using credit cards or budgeting apps, cash envelopes are the way to go. This involves taking out a set amount of cash for the month or week and using that to track or stick to your budget. I haven’t done this before, but it’s really effective!
Just remember, these are things to TRY. It might not work for you – but you’ll only know if you test different ways to track your spending. You don’t have to commit to any of this long term! Treat it like an experiment.
If you know you’d like to cut back on food spending, using a food budget you can stick to will help you get closer to financial goals like paying off student loans, saving up for a big trip or big expense like a house.
For me, it’s been instrumental in building an emergency fund and saving money for snowboarding, which is my one true passion in life (and a very expensive hobby).
Now you know how to create and hopefully stick to a food budget!
Are you ready to start saving money on groceries?
It’s packed with nine of my BEST tips and strategies for keeping grocery costs super low and more tips and tricks that work no matter where you live, how many people are in your family or how you eat.