01. How Much Should You Be Spending on Groceries...Now?
A "thrifty" food budget in October 2022
I was working with a long-time financial coaching client recently, and she wanted to check in on her budget categories given the current economic conditions, especially groceries.
After I calculated her new baseline grocery budget for her family of 10 living at home, I almost felt I needed to apologize. $2,039.40!
While, not all of us have 8 kiddos at home, but all of us have felt the crush of ballooning grocery costs.
What to Do in the Face of Rising Grocery Prices?
I’ve been regularly tracking grocery prices for my students and coaching clients (and my own family) since 2014, and in the past, everyone has come to me saying, Shannon, it seems like my grocery bill is always going up.
And of course, that is true.
There's always a certain amount of inflation. (Plus, we’re often growing our families and our children need more and more fuel to fill their growing bodies over time.)
But typically the annual increase represents only about $2 to $10 per month for most families.
Now, all that has changed.
In the last two years alone, we’ve watched grocery prices go up almost 50%.
That's a shock that every family is feeling, and of course, it affects all of the other areas of your budget as well.
So, what steps can you take to mitigate the situation?
Set a realistic grocery budget
While prices will continue to go up, the best first step we can take is to set a reasonable budget (I’ll help you do that below), and then take steps to stick to it.
It would be easy to hold tight to what you were spending two years ago.
Believe me, I get it!
Baseline grocery costs for my family in February 2020 were $634. We’ve made some big diet changes since then, so I wasn’t surprised to see that go up for a while, but it’s hard to believe a “Thrifty” grocery budget for the four of us is now $960/month.
The problem comes when we hang onto our idea of what groceries “should” cost without accepting the new reality. Then we beat ourselves up and wonder what’s wrong with us and give up.
Instead of the grocery spending shame spiral, it’s a lot more constructive when we can set a realistic budget and work within the confines of current conditions.
So let’s start there.
Thrifty Monthly Grocery Budget for the Average American Family
Below is a range of grocery costs calculated for families based on the USDA Cost of Food at Home Thrifty Food Plan for October 2022. This represents the minimum you’ll spend to meet your family’s nutritional needs.
So take a look, and see where your family falls within the guideline.
Use the lower end of the range if you have young children, and the higher end if you're feeding hungry teenage boys.
Household of 1: $288 - $335
Family of 2: $383 - $593
Family of 3: $680 - $889
Family of 4: $810 - $1,154
Family of 5: $938 - $1,328
Family of 6: $1,126 - $1,546
Family of 7: $1,272 - $1,670
Family of 8: $1,478 - 1,848
Family of 9: $1,669 - 2,007
Family of 10 - $1,888 - $2,154
Family of 11 - $2,108 - $2,252
Is this really realistic?
Over the years, I’ve seen my clients consistently hit this guideline without spending time shopping sales, clipping coupons, or compromising their family’s health following my methods, even if they have special dietary restrictions. (I’ve also seen some go lower, but that’s the exception rather than the rule.)
However, this assumes that you’re doing quite a bit of cooking from scratch. If you’re working toward paying off debt or building your emergency fund, this is a great goal. There can also be seasons where some convenience foods free up time and help you focus on other family goals. So be sure to consider what your priority is right now.
Happily, even a 50% increase in grocery costs hasn’t held my coaching client back from making progress toward her family’s financial goals, and I have every confidence that the same will be true for you. Once you determine a reasonable grocery budget for your family, then you can take strategic steps to meet it, with confidence that you can get there.
Where does your budget fall compared to the Thrifty grocery budget? How have rising grocery prices affected your family over the last couple of years? Share your tips and inspiration in the comments.
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Looking at where my family falls into this, I am asking myself can we do better? I will admit I am not one to plan my shopping based on a circular as we are consistent on what we do buy. My spouse is not one to use coupons or club cards either. We have to accept the new reality otherwise we can get stuck in the loop of what groceries used to cost. The same goes for life expenses. Hitting the guidelines without shopping sales, clipping coupons, etc. seems more manageable. Do you have any suggestions for better organizing shopping lists like how a store keeps inventory? I would like a more efficient way to maintain staples/lists by categories in order to streamline shopping. We used to shop online however with rising costs most of these services have increased fees and tips for shoppers (which can really add up if using multiple services) that it has become a question of financially weighing on which convenience service to choose because there is never a one size fits all solution. Ever since enrolling in your Budget Breakthrough course, I really had to examine online shopping habits as convenience makes it easier time wise as a busy mom. It also comes down to not only financial but what my time is worth. For example when we lived in the city and our apartment did not have laundry, it was either go spend time in the laundry mat or have them pick it up . It is also interesting to me after having conversations with friends who grew up in other countries how it was more acceptable to have outside help with household tasks from childcare to cleaning but here in the United States besides costs for these services we as mothers are wearing multiple hats. I can really appreciate an old movie where a governess is running a household.