Knowing how to prepare a grocery shopping budget is a crucial part of making an entire household budget work. It is one task that is well worth the effort.
Preparing a Grocery Shopping Budget
Composing a budget for your groceries is going to take a little forethought and preparation, but the result will be a much better understanding of where your money has been going versus where it should be going. If you need help downloading the printable, check out these helpful tips.
Track Grocery Spending
To get started with your grocery budget, track your monthly grocery spending habits. Save every receipt you get, from quick trips to the corner store for milk to the bi-weekly supermarket trip. At the end of each week, total up the amount you have spent, dividing items into categories like:
- Food (everything from snacks to meats)
- Drinks (soda, juice, alcoholic beverages)
- Toiletries (soap, shampoo, toothpaste)
- Cleaning supplies (paper towels, dish soap, laundry detergent)
Be sure to use the regular price of the items if they were on sale and add any grocery coupons back into the total. This gives you a realistic look at exactly how much things cost when they are not on sale and you are out of coupons.
Analyze the Numbers
At the end of the month, you're ready to start composing your budget.
- Gather all of your receipts.
- Open up a spreadsheet on your computer. Make each row of the spreadsheet one of the categories above (Food, Drinks, Toiletries, Cleaning Supplies).
- Total up each section of your grocery bills and add them together, entering the total in the spreadsheet.
- Title the column whatever month it happens to be and put your total spend at the bottom of the column. Make each column a new month so that you can see how your spending changes over time.
- Plug your final number into a budget worksheet that includes the rest of your monthly expenses.
If your expenses are greater than your income, the grocery section is one area where you can save money. Even if your total household budget balances beautifully, you may still be able to find ways to save money on your groceries.
Reduce Food Costs
To cut back on your food costs, look at each category of groceries you purchased. Figure the percentage of your total grocery bill within each category. Because snacks and convenience foods are often costly and nutritionally weak, you should cut this category back first. If it happens to be one of the biggest spending areas, you should aim to cut it in half. Otherwise, try reducing it by 20 percent. Implement this plan by:
- Buying in bulk and portioning snacks
- Making your own snacks
- Switching to store brands
- Eliminating snacking and sticking to meals only
Protein is another area where costs can be reduced. While beans and peanut butter are fairly cheap per serving, meats can add several dollars to otherwise thrifty meal plans. Cut costs by:
- Buying cheaper meat cuts (burgers out of ground chuck instead of ground sirloin)
- Deboning chicken and turkey breasts, thighs and wings yourself
- Watching flyers for bulk product sales (you may have to split 10 pounds or more into individual packages for freezing)
- Picking up reduced-for-quick-sale meats and freezing for later use
- Serving more vegetarian dishes
- Splitting meat orders with another family
National Grocery Spending Habits
Grocery budgets can vary depending on your location and the size of your family. A general idea of what people of the same income level, geographic location or household size spend can help you determine if your grocery budget is where it should be.
Income, Expenditures, Poverty, & Wealth: Consumer Expenditures
The U.S. Census Bureau provides the table Average Annual Expenditures of All Consumer Units by Region and Size of Unit which allows you to check your spending against that of people who live in your area of the country. Regional costs do vary, as the cost of living rises in certain areas. You can also use the data to check against household size expenditures, from one to five persons.
Average Grocery Spending
The IRS Collection Financial Standards explains what the average family will spend monthly, depending on the number of people in the household. The standards for 2012 for food purchases are:
- 1 Person=$301
- 2 Persons=$537
- 3 Persons=$639
- 4 Persons=$765
Compare your total grocery budget to these amounts. If yours is more than the standard, you may want to consider revisiting your grocery budget, even if your overall personal budget works for you.
Budgeting Choices
When preparing your budget, don't leave anything that you purchase at the grocery store out. If you purchase baby items, lottery tickets, books, toys or anything else, be sure to include them as an item in your spreadsheet. You want to make sure you know where all of your money is going.
Once you have your basic budget, you can split it up into more categories, like grains, dairy, and convenience foods. It will give you an even better idea of your spending habits and will help you figure out if you are spending a little too much money on certain items at the grocery store.
