Your Grocery Budget: How to Make It and Stick to It

Do you have a grocery budget that’s working for you? To me, it’s super basic, but to so many, making any kind of budget is like speaking a foreign language. Setting a budget goal for food will help you save money, period.

Whether you're making a grocery budget for the first time, or simply trying to save more, these tips will help you reach your goals.

Without a budget or a plan, your spending habits and your control over your money are doomed to fail. And it doesn’t matter how much money you may have, it still happens. But I can help you find your budget and stick to it.

Is the Cart Full Yet?

Too many people head to the supermarket, start shopping, and know that they are finished only when their cart is “full”. Without a workable budget to guide your shopping, you’re probably spending way more than you need to every month with much of it going to waste. Americans wind up throwing out millions of dollars of food every year!

There’s an “Art” to a Budget

Unfortunately, for lots of people, the idea of budgeting is either scary (will I need to use spreadsheets?) or restrictive (I just want to buy what I want so leave me alone!). It doesn’t have to be either one of those choices.

A grocery budget is simply a goal to help you plan for what’s really important. You can treat it like an art form, a skill that will reward you if done right. Or even treat it like a game where the object is to see how little you can spend while still providing nourishing and tasty meals and snacks for your family. And the prize is putting that extra money toward another goal! You have other goals, don’t you, say retirement savings?

We’re All a Little Bit Different from Each Other

Everyone’s spending on food is different. While experts say you should spend a rough guideline of 10-15% of your total budget on food every month, so many factors can affect these numbers.

Is your family large or is it just you? Do you mostly dine out or cook at home? Do you choose organic, fresh foods or processed and prepared ones? Is one or more of your family on a special needs diet? Do you try the latest foodie recipes or do you rotate the same basic dishes? And of course, where and how you shop can and will affect your spending drastically.

That’s a lot of questions that have to be answered and decisions that you can make about your food choices.

How Do You Actually Make a Grocery Budget?

The first and most critical step in creating a grocery budget that’s right for you is to begin with tracking what you’re spending now. Wait, you might be saying, “How is this going to save me money?”

Well, if your monthly food costs are currently $400 and you set your new budget for $200, you’ll only be setting yourself up for failure. You aren’t likely to slash your food costs by 50% on day one.

Start where you are and then start reducing gradually. Can you get to $375? or $350? Maybe you can, but you want to do it in a way that you don’t feel deprived. Track your spending over about 2-3 months to really get a good idea of your real spending habits.

To track your spending, you don’t need a spreadsheet (although you certainly can use one), but you do need to keep a record of some sort. It can be a notebook, a spreadsheet, a word document, a program like Quicken, Mint, or another budgeting app.

Whichever method you choose, you need to record every purchase amount and divide it into at least a few categories like groceries, health and beauty products, eating out (restaurant, fast food, takeout/delivery), and household items (paper goods, aluminum foil, cleaning supplies, batteries, lightbulbs, etc.). You’ll want to know how much of your monthly budget is for groceries versus eating out, because while you may have a separate budget for each, the numbers will be your total budget for food.

Your household items tend to be higher-ticket items that are not necessarily purchased every month, so these numbers may vary quite a bit. But you’ll want to include them and average them out for a real monthly amount.

The Calculations

Once you have your spending added up for the record period, you are ready to set your first budget goal. A realistic number would be a 5-10% reduction in costs. So for our example of a $400 spend, the budget goal for the first month might be $360- $380.

Once you’ve successfully reduced your spending to that level, set a new budget goal reducing costs another 5-10%. Continue this process month after month until you honestly feel your grocery budget can’t go any lower without abandoning the nutrition, quality, and taste standards for your family. Then make a plan for the money you’ll be saving and actually follow through with it (maybe that goal is saving for a vacation or the big one…retirement!).

It’s always easier to cut back if you have a positive goal you’re working towards.

Sticking to Your Grocery Budget

Setting your grocery budget goal is the easier part. Sticking to the budget goal is where you need your full arsenal of tips and tools, a bit of effort and creativity. Here are just some of the ways to reach your budget goal:

1. Plan your meals for the week

This doesn’t mean you have to know which meal you’re going to cook each day, but you do need to have ingredients on hand between your pantry, your freezer, and your shopping list in order to make enough meals for the week. Shopping without a plan greatly increases your chances of buying prepared foods, coming home with not enough meals, or resorting to eating out. Don’t forget to plan for snacks, too.

2. Figure out your cost per meal and try to reduce it

This is especially true if you have a regular rotation of dishes you cook. Calculate the cost of your ingredients and see where you might substitute and save. This might mean going meatless once in a while (try replacing with beans or lentils) or simply substituting store or sale brands. It might mean cooking in bigger batches and then freezing portions for other weeks.

3. Track prices to know the sales cycle and get the best prices

By tracking prices, you’ll know how to get the best deal. This is where the numbers tell you the story.

4. Get organized with your coupons and identify new sources for discounts

Clipless coupons, rebates, loyalty cards, and rewards points are all important to saving money.

5. Consider where you shop

Think about whether changing stores or simply adding a quick side trip might gain you some bargains. In addition to supermarkets, don’t neglect discount grocery stores, drugstores, and warehouse clubs.

6. Plan your grocery list around the weekly sales and your coupons

Have a plan, but be flexible when you get to the store in case you find that the unit prices or store brand prices show that non-sale items are actually a better buy.

7. Buy fresh and in-season items to avoid wasting food at home

In-season fruits and vegetables will cost less and stay fresh longer.

Improvement Is the Goal

You won’t be perfect but you will be better then you are now and you will save money!

Accept that impulse buys and “mistakes” will happen once in a while, but don’t let them derail you. If you already have one impulse item in your cart, don’t add another unless you take the first one out. Decide what’s really important.

The most important part of stretching your money and freeing up some of it for other priorities is to feel and know that you can do it! If you never try, you will continue to suffer from your failures.

Remember that great comment made by superstar NHL Hall of Famer Wayne Gretzky when he said: “You miss 100% of the shots you don't take.

Final Thoughts

Don’t wait until the end of the month to check how you’re doing against your budget goal. If it’s only one week into the month and you’ve spent half your budget, you’ll want to know that and you’ll need to slow your spending down.

At the end of the month, check your progress over the previous month and if you didn’t make your goal, see if you can figure out why and develop strategies for next time.

Did you eat out more than planned? Buy too many items not on the list? Did you have a special event or party that put a dent in that month’s budget? Can you adjust and make a new goal for the next month, and move forward? Yes, you can do this and the best time to start is right now!