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How to Make a Grocery Budget That’ll Actually Work for You

How to Make a Grocery Budget That’ll Actually Work for You

By Berna Anat, Berna Ana, Anna Stockwell, Lauren Joseph, David Tamarkin, Joe Sevier

Does anyone else find themselves making multiple trips to the fridge, hoping that the next time you open the door, all the free groceries will just… appear? (Just me?)

Groceries take up such a huge chunk of our budgets, with the average US household spending anywhere between $300-500 per month—and those are the pre-pandemic figures. Yet many of us still gamble, guess, and hope our way through the aisles, forever carrying those queasy questions to the cashier line: Did I spend too much? Can I even afford this?

Since groceries are a major part of your monthly spending, knowing your grocery budget brings clarity and control not just to your food spending, but to the way all of your cash flows. As a financial educator, the million-dollar question I always get is: How much money should I be spending on groceries?

But when we’re forced to hit the reset button on all of our spending—whether due to change of income, or to prepare for an uncertain future—we should be asking a different question: What have you been spending on groceries, and should you keep spending the same, especially if your financial situation has changed?

Below, I’ll walk through what a grocery budget looks like, how to stick to it, and a few ways to re-rack your grocery budget entirely.

How do I set a realistic grocery budget?

To figure out where you’re going, you’ve got to know where you’ve been. Before you do anything else, look back at the last two to three months of your spending and find a ballpark average of what you typically spend on groceries each month, taking special note of how your spending has changed if your city has gone on lockdown.

If you’re more of an analog person, you can find this average by going through your credit or debit card statements over the last few months. If you’re more of a techie, there are tons of apps (including Mint, Clarity Money, and Charlie, a favorite of mine) that connect to your bank accounts and analyze your historical spending with aesthetically-pleasing visuals.

While you’re at it, try to measure out how much space your grocery spending takes in relation to other spending. What percentage of your overall spending in a month is spent on groceries? Is it more or less than what you spend on entertainment? Do you tend to spend money on takeout according to your mood, and could that money have been used to pad your grocery list?

Random, impulsive grocery trips are the budget’s biggest enemy, so resolve to have one official grocery shopping trip every 10 or 14 days. Next, you’ll whip out your calculator, take your average monthly spend on groceries, and split it between your future trips.

Let’s say you typically spend $400 on groceries, and you decide to run for groceries every 10 days—so, roughly 3 times per month. $400 divided by 3 is about $134, and that’s your new grocery budget for every time you hit the store.

You can stick to this budget, or you can challenge yourself to go 10-20% below your average monthly spend and see where it gets you. You can always experiment and re-adjust next month. And if you’re looking at this new budget like, “There’s no way that number will work for me,” now is the perfect time to poke around your monthly bills and make space.

Have you looked at all of your random subscriptions and cancelled the useless ones? Have you hit pause on your federal student loans, since you’re now allowed to postpone payments until October 1? Can you ask your bank or credit card companies to waive interest fees or monthly payments for a while, due to pandemic hardship?