I have received many, much-appreciated emails from readers and educators alike wondering about my suggestion from as far back as our 2011 budgeting presentation and a 2010 blog that households should try to spend between $75 and $125 per person per month in their household on groceries. Many of these emails express concerns that the suggested budget amount appears extraordinarily low, especially when compared to the suggested figures released by the federal government (upwards of $200 to $400 per person per month – see USDA 2017 Cost of Food report).
As with most all consumer goods, prices do go up. In the years subsequent to my earlier post, I have tended to raise the figure, though not to what many still feel is reasonable. Most disagreeing parties either cite their own household grocery budgets, the IRS’ allowable living expenses national standards for food (see example here), or the USDA’s Food Plan as proof that I’m off my rocker. After all, my suggested monthly grocery allowance per person is usually half that of the federal government’s suggestion. Even then, I know from personal experience and from other sources that it is possible to spend even less per month – as little as 25% of the IRS guidelines – and still eat nutritious and satisfying meals.
The first point to make is that the IRS guidelines are not suggestions nor even averages. These are amounts below which related expenses claimed on our taxes are not questioned by the IRS. Additionally, the USDA’s food plans are based on the assumption that most all American families can conform to one of their food plans: 1) thrifty, 2) low-cost, 3) moderate-cost and 4) liberal. If I were involved (and there’s a good reason I am not), the names of these plans would instead have been: 1) reasonable, 2) dial it back, 3) lap of luxury and 4) Alaska (yes, food is sky high expensive there).
I know from my experience in teaching, as well as my own family of six expenses (including 2 teenagers), that the $50 to $150 per person per month is a reasonable range for food for many (if not most) American households.
Is it easy? No.
Is it convenient? Certainly not.
At $125 per person per month, you would have to eliminate most of the grocery store budget busters that add nothing to our diets but do add inches to our waistlines, such as bags of chips, expensive brand name breakfast cereals, soft drinks and alcoholic beverages.
A $125 per person per month grocery budget means that dinners are not served from convenient, but expensive, heat-and-serve containers or pre-chopped bags and boxes. Rather, dinners are likely prepared, if not from scratch, at least from several basic ingredients. Expensive meats are likely not an everyday affair on the dinner tables of households living on a $125 per person per month grocery budget.
A $125 per person per month grocery budget means brown bag lunches for all family members in school and at work. However, according to 2012 data from the National Center for Education Statistics’ website, essentially ONE-HALF of all American schoolchildren are eligible for free or reduced-price lunches at schools.
A $125 per person per month grocery budget also probably means buying store brand rather than name brand products.
With all of these probabilities, you may be wondering what’s left to eat: crackers, peanut butter and the occasional water on the rocks?
Actually, in our household, where my amazingly resourceful wife regularly hits $50 per person per month (including our older teens). Such frugal budgets often require an extra hour or two per week of research on the Internet and circulars for special deals. There was a time when our grocery shopping habits included the extensive usage of doubled-value coupons, buy-one-get-one-free coupons and the like. However, now, grocery shopping trips typically include two trips a month to a warehouse (e.g. Costco), a weekly run to the supermarket, an occasion visit to the local grocery store for milk, and a monthly trip to the bakery outlet for half-priced (or better) bread. When our local grocery store has special deals (aka “case lot sales”), we usually stock up on many of the staples available at great prices.
But our $125 per person per month grocery budget also includes healthy and tasty breakfast cereals (hot and cold), organic deli meats for sandwiches a couple times per week, some convenience foods, but mostly healthy and delicious meals (including affordable, in-season fresh fruits and vegetables). Plus, we have our occasional – 1 to 4 times per month, or more often if I’m lucky – home made crepes with Nutella and fresh strawberries (that’s our splurge).
The truth is, a $125 per person per month grocery budget may seem like a farce to a household currently spending $300 per person per month, but it’s actually quite achievable. In single-parent homes or homes where both parents work full time and non-work time is spent hauling kids from one activity to another, grocery planning and shopping time are likely difficult to come by or not prioritized. For such families, spending $125 per person per month is not an impossibility, but it may be a casualty of the realities of life.
I do recognize that there are many communities and neighborhoods around this country that do not have grocery stores nearby but rather convenience stores or corner markets whose prices are higher than grocery stores. Coupled with the fact that many households lack sufficient transportation to carry more than a few bags of groceries at a time, and the strategies described above may be irrelevant.
Regardless, here are the basic principles of minimizing grocery costs in every household:
- Plan and prepare for each grocery trip
- Be a little flexible in your meal planning options, since what is on sale may not match what you are craving for dinner that week
- Don’t pay full price unless absolutely necessary
- Take advantage of periodic sales on staples that have a long shelf-life
- Buy meat when it’s on sale and store in the freezer
- Use store coupons especially when items are on sale
- Check store ads and take advantage of store policies that match other stores’ low prices
- Leave the credit card and possibly even the debit card at home if you know that you are tempted to overspend using plastic
Keep in mind that I always say in my classes that the $125 per person per month grocery budget is a target, not an inviolable law. The reality is that the grocery bill is one of the easiest of all household bills to save money on with a little extra effort. So that makes it a great place to start when it comes to improving the household finances.
Good luck, and please feel free to share your successes (and your frustrations) in reducing your monthly grocery bill.
This article was updated May, 4th 2017 to reflect current grocery spending standards.
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Director of Education – Debt Reduction Servinces Inc.
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