Budgeting for food is one of the toughest things to do because let’s face it, we all love to eat!

Between groceries and eating out, the bills can add up fast. But, how much should we be allocating for food each month?

Unfortunately, there isn’t a specific dollar figure, but rather a percentage of your monthly income.

This number will vary by household size, location, and age.

In this article, we’ll go in-depth on how much you should budget for food and how you can successfully do this without starving!

Food Budget Variables

As mentioned above, your budget will depend on several variables. For this purpose of this article, I’ve chosen data that would typically be categorized as average. 

There’s a husband, wife and their 4-year old son. They live in Milwaukee, WI which has an average cost of living for a larger city.

The family spends $900 per month on food, but has a goal to get it down to $500 and maintain a similar lifestyle.

Based on the numbers provided, you can simply play around with a few numbers and find your monthly budget.

• Family name: The Johnson’s
• Household size: 3
• Ages: 32, 30, 4
• Location: Milwaukee, WI
• Household monthly net income: $5,000
• Favorite grocery store: Whole Foods
• Grocery/Restaurant visits per month: 4 each
• Monthly grocery spending: $500
• Monthly restaurant spending: $400
• Current percentage of monthly income spent on food: 18% or $900
• Desired percentage of monthly income spent on food: 10% or $500

Breaking Down The Numbers

Before crunching any numbers you can see the Johnson’s spend way more on food than their monthly budget should allow. 

Currently, they are spending $900/mo on food which is 18% of their monthly income. 

The average cost of food per month for one person ranges from $150 to $300, depending on age. A general rule of thumb is to budget between 5% and 15% on food each month.

How can they be more frugal and get down to their household monthly budget goal of $500?

Let’s begin with the obvious. Their spending habits are slightly out of control in relation to their monthly income.

Restaurant Spending in Your Food Budget

Is it necessary to be going out to eat once a week and spending $100 each time? 

NO.

I get date night is important and you like to enjoy yourselves, but is it a crime to do this at an affordable local restaurant?

The Johnson’s could easily cut restaurant spending in half each month and still go out once a week.

Don’t be embarrassed to find dinner deals on apps like Groupon. 

Also, take advantage of happy hour specials. If this means going out on Wednesday after work instead of Saturday then do it!

Grocery Spending in Your Food Budget

Is $500 per month on groceries too much?

YES.

Buy generic brand items and minimize trips to costly grocery stores. 

It’s really that simple.

Try the store brand items and generic ones sitting right next to the big name brand you usually purchase.

I promise it’s going to taste the same and you’ll reap the monetary benefits in the long-term.

The only thing that’s going to take a hit is your reputation for buying cheap items.

Joking!

No, you’re not too cool for these and nobody is going to judge you. Oftentimes, store brands will be 20-50% cheaper than big brand items.

Grocery Store Budget Shopping

I love Whole Foods too, but just about any other grocery store is more affordable! 

Bulk grocery shopping is still a great idea for any size household. There’s likely a Costco or Sam’s club within 20 minutes. 

Buy your frozen and boxed goods here. If you prefer, you can buy other miscellaneous items at Whole Foods or another store.

Don’t be afraid to check out discount grocery stores!

Tips & Recommendations Budgeting For Food

Below are a few tips and recommendations to decrease your spending and reach your monthly food budget.

• Check out Mint’s grocery budget calculator. This can be a useful tool if you want to mess around with some numbers for your grocery budget
• Buy generic or store brand items
• Buy in bulk when possible
• Go out during happy hour
• Use coupons and discount apps
• Invest your food budget savings each month

New Monthly Budget

Alright, we’ve had a chance to look at the Johnson’s monthly spending habits at a high-level. 

Now, let’s consider some of these recommendations above and create a more affordable food budget.

• Household monthly net income: $5,000
• New favorite grocery stores: Costco & Aldi
• Grocery/Restaurant visits per month: 4 each
• Monthly grocery spending: $300
• Monthly restaurant spending: $200
• Current percentage of monthly income spent on food: 10% or $500
• Savings per month: $400

As you can see, the monthly budget looks fairly similar at a quick glance, but the savings are immense.

The major changes don’t require more effort or time. It’s more about an awareness of spending to maintain your standard of living.

It’s no extra money out of your pocket. All of the money being saved and invested is money you were spending in the previous months!

You can still enjoy your weekly date nights and still buy more than enough groceries to spoil your family.

If it makes it easier to save, think about all the traveling (or whatever you enjoy doing) you’ll be able to do down the road with your savings.

Imagine investing the $400 each month over 30 years at a 6% return and having an extra $400,000 to enjoy in retirement!

Credit: Saving.org

Now, guaranteed returns aren’t a reality, but over the long-term, the market tends to average 6-8% annually.

Final Thoughts

Creating a budget for food can save you thousands of dollars every year. All it takes are some minor changes and sacrifice to your weekly routine.

Being frugal now is the key to being happy later.

Little things like changing what day you go out to eat or what food brands you buy can put hundreds of dollars back into your pocket each month.

Investing a portion of this extra money into something like index funds over a 30 year span could easily result in over $100,000.

Make these adjustments today and you just may be able to retire 5 years earlier!

Check out our other resources on budgeting such as our zero based budgeting example or Which Payment Type is Best if You Are Trying to Stick to a Budget.

Jordan Parker is a former financial advisor and entrepreneur who teaches others about personal finance, investing, and creating a full-time income blogging. He is the founder of byjordanparker.com