5 Steps to Reducing your food budget & saving money

Is your Food Budget creating budget woes?

Perhaps you found this post because you asked yourself the same question I did…why am I constantly going over my monthly budget?

I suspected our food budget was the issue as it’s much more variable than other bills. I also knew we were eating out way too much! So I sat down and looked back over the past 6 months to see how much we spent.

In this post, I’m going to share our food budget wake up call and go over 5 steps you can take to also start your journeying to controlling your food budget and stop blowing your budget every month! Be sure to get the printable budget worksheets!

stop spending money on food

Our food budget wake-up call

The results were frightening! We were spending just over $1,000 on average each month on food! This included groceries, eating out both fast food and sit down dining, as well as beverages and quick stops at Starbucks and 7-11.

I couldn’t believe how quickly it added up. This was definitely the reason we were constantly going over our monthly budget!

I broke our spending down into categories so that we could see where the biggest chunks were going and then set out to find a way to reduce each category. We’re just starting our journey and I hope you’ll come on it with us! I’ll be following this post up with more posts about how to save on food in general and how to specifically save money on groceries!

I’ll also be posting monthly updates to let you know what’s working for us. For reference, we’re a family of 3, 2 adults and a toddler with a baby on the way.

Jump into Step 1 below right now and start fixing your food budget woes!

5 Steps to Rescuing your food budget

Step 1: Find our what you’re spending! Get the Printable Budget Worksheet template

food budget calculator worksheet

This may be the most painful part of the process, actually sitting down and seeing what you’re spending. If you use cards to pay for everything this makes it easier, simply look back at your statements. If you often pay with cash you may have to do a bit more guessing or start now and track going forward.

I recommend tracking the last 6 months if possible so you can get a good average of what’s being spent. Be sure to check all your accounts. Include places like 7-11 where you may stop for a quick coffee or snack. Even check Amazon if you frequently purchase food products on there! You want to get a complete picture of your spending.

Seeing that final number might be painful, especially if it’s much higher than you anticipated and much higher than what you generally allow for in your monthly budget. Be sure to update your budget for the current or next month to reflect your average spending over the last 6 months! You should be able to slowly reduce this budget line as you start reducing your costs using the following steps.

Now take a deep breath and move onto Step 2! As I said earlier, our number after completing step 1 was $1,070 for a family of 2 adults and 1 toddler.

If you’re just starting your tracking take into account that you may have gotten gift cards for Christmas that will make your spending appear to be less than it usually is. We get quite a few Starbucks gift cards for Christmas as well as date night type gift cards from my parents and in-laws so our January spending will likely be less out of pocket than it generally is.

Step 2: How do you compare to the average

average food spending

Now you have a number, but what does that number mean? A good way to give your number some context is to see how your spending compares to what others spend.

Grab the most recent chart from the USDA which outlines the average cost of food for US families. I would calculate the number for your family make-up based upon the “moderate cost plan”. If you eat a lot of organic food that costs more you may want to use the “liberal plan”.

Of course, this chart does not account for eating out. You can either use just the USDA amount for your comparison budget or you can add on some to account for what people tend to spend on eating out. According to the Bureau of Labor Statistics, the average household spends $280 per month of eating away from home. This number is a total average, it’s not divided to reflect different family sizes and make-ups.

For Step 2 our comparison number using the USDA chart was $712.50. That’s the national average for a family of 3 with a male and female adult between age 19-50 and a toddler age 2-3. If we add in the average spent eating away from home our comparison number would be $992.50.

I’m pretty sure their toddlers must be less picky than mine as they allow just $159.90 per month for my toddler. Since her diet is currently 90% made up of pouches and cereal bars I’m pretty sure she costs us more than that!

Remember this is just an average. If you live in a higher cost of living area like I do your grocery budget may not go as far. If you live in a cheaper area you may get more for your dollar than the average person does.

Where did you stack up to the national average?

If you are above the average I would suggest setting the average as your first goal reduction target. If you’re already close to or below the average that doesn’t mean there isn’t still room to save! But congrats to you for already being a thrifty eater!

Step 3: Identify your pain points

In step 1 we broke the spending down into categories so that should help you with step 3. Look over your categories and identify which seem way too high. Are there any that really surprise you?

For me I was blown away by the amount we were spending on fast food and sit down dining. I knew we were eating out too much, but I had no idea how high that number truly was! The Starbucks line was always a bit higher than expected. Those yummy drinks add up quickly!

I tried to convince my husband that getting a ninja bar could really help to cut down on monthly spending on fancy coffee but he didn’t go for it…plus we’re pretty limited on kitchen counter space.

Step 4: Identify ways to “realistically” cut your food and grocery bill

saving money on your food budget

Now it’s time to sit down and come up with some ideas to help save money, especially in those pain points. Make sure to involve your spouse and kids, if they’re old enough, in creating this list of ideas.

Here are a few ideas to get you started:

  • Have 1 less fancy coffee per week (or whatever your vice is)
  • Eat at home more – whether this means meal planning, meal prepping, meal delivery, whatever it takes to get you eating more meals at home.
  • Use more coupons for groceries
  • Use coupons when you eat out

For more great ideas check out my post 18 Simple ways to save money on groceries

As busy parents of a young child, and me being very tired and very pregnant the items above are a few of the ideas we plan to start with. One for us is trying a meal delivery service to help us eat at home more since the food comes ready to cook and the service we chose has meals that are quick to prepare.

I’ll also be cutting down on my Starbucks runs. This will be made a little easier since the yummy holiday drinks will all be going away until next year!

Now that you have a big list of ideas let’s start doing them!

Step 5: Slowly implement the savings.

Don’t try to change everything at once. I would recommend each family member picking one item to start with. Or choose one item per category if you want to be a bit more ambitious. Cutting the costs will likely mean some lifestyle changes so don’t try to do too many at once!

Step 6: Track your progress by monitoring your food budget

To find out if the 5 steps are working you’ll need to do the 6th step, tracking your progress. At the end of each month calculate your costs and see if the amount is going down. Then, figure out what you did that worked and what you want to tackle next.

Questions? Let me know what you’re going to do to rescue your food budget. We’re just starting our journey as well and I’ll be posting monthly updates as to how it’s going for us!

food budget calculator

How to stop overspending on food

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