It's interesting to me how financial experts, mothers-in-law, and total strangers on a Facebook page all have distinct opinions on how much you should spend on groceries. The thing is, while food costs certainly shouldn't be complex, they can vary from person to person and household to household — even region to region.
I've heard the finance gurus spout percentages — you should never spend more than X percent of your income on food — but this is so incredibly unhelpful to me! This formula presumes that all people's lives are created equal, and that all communities nationwide offer the same prices and sourcing options for food, or that incomes are always proportionately commensurate with those costs.
How You Should Actually Decide How Much to Spend on Groceries
More than 10 years ago, I ditched the arbitrary percentage in favor of the USDA Food Cost reports. Every month, the USDA issues a report on what food should cost families nationwide, presented in four different priced plans: thrifty, low cost, moderate cost, and liberal.
Download the PDFs: USDA Food Plans: Cost of Food
These reports present weekly and monthly totals for what it costs to feed a household, based on the demographics of the members in that household. For instance, it costs more to feed my 16-year-old son than it does my eight-year-old daughter based on the sheer volume of food he consumes in comparison to her. The USDA's reports take this into account.
You can add the projected costs for all the members of your household and then decide which plan will be your target goal.
How It's Going for Me
Currently, on the thrifty plan with my family (two parents, four teenage sons, and two tween daughters), I can expect it to cost me around $1,300 per month to feed everyone with all meals prepared at home. For the past 13 years or so, I've been able to keep our spending at or below the thrifty level, while still eating a healthy diet and even slipping in (more expensive) organics from time to time.
Keep in mind that your results may vary. For example, families with food allergies or special diets may spend more. And folks who travel and dine out for work will obviously have to adjust. Every household has unique needs and purposes.
The USDA Food Cost reports are a great starting point if you're not sure where to start in creating a food budget. So far, they're working well for me as a good gauge for keeping my spending on track.
How do you decide what to spend on groceries?