How Setting Up (and Sticking To) a Food Budget Could Be the Fastest Way to Get Out of Debt

It’s the area of my budget less examined: My husband and I set aside a whopping $1,000 for groceries a month. This covers the two of us and our toddler son. This total also applies to just groceries—no sad desk salads or dinners out included here. It’s a number we reached with the help of our financial planner. In other words, a lot of thought and calculations went into it, and we take extra care to never color outside the lines when it comes to our spending in this category.

But here’s the thing: As our toddler gets more expensive and we have frequent conversations about creative places we can cut, our monthly grocery spend is starting to feel like a place that’s worth a second look.

Case in point: This week, my husband whipped up a delicious Japanese curry from scratch, and we ate it over rice for three nights in a row. (Leftovers are the best.) The cost? About $20. That’s hardly making a dent in our monthly grocery tab.

Which got me thinking—say we made an effort to shave just $100 off our monthly food budget. That would be $1,200 back in our pocket at the end of the year, which would definitely be nice to have. Bottom line: Food is an area with wiggle room. (There are coupons! And in-season produce that’s on sale!) But where should you start when it comes to cutting costs?

First step: Zero in on your food budget. From there you can find creative ways to trim the (financial) fat.

1. First, Take a Look at Your Overall Budget
This requires you to look at how much money is coming in and then determine how much money has to go out. In other words, what are your fixed expenses? Typically, these are things like your mortgage payment or rent, the cost of your commute, utilities and more. Once you have that ironed out, calculate how much cash is left over each month. From there you can see exactly how much you have to play with when it comes to things like groceries, entertainment and more.

2. Now Review Your Spending to See How Much You’re Actually Shelling Out
After calculating your budget, the next step is cross-checking the number you can realistically spend with how much you’ve been spending on groceries. A finance app like Mint—which separates your spending into categories—can actually help with this. Or you can simply go line by line on your statement to see how many transactions would be categorized as part of your monthly grocery spend. (Don’t forget to account for any items bought with cash.) Once you have that number, compare it to your budget. If they’re aligned, phew. If they’re not, you have some tweaking to do.

3. Conduct a Grocery Audit
This is the moment where you take a hard look at your grocery spending habits. Ask yourself the tough questions: Who do you feed? (For example, is it just your immediate family or are you frequently entertaining guests and footing the bill?) What are your food preferences? (Say you’re always shelling out for Rao’s pasta sauce, which is delicious but pricey. That could be a place to cut.) What items are consistently in your cart? (This could be an opportunity to use a service like Instacart to automate your weekly shop and save.) You also want to examine your pantry (what are you stockpiling that could be turned into meals?) and how much you’re wasting (if you consistently have leftovers that you forget about, you may be able to make smaller recipes and spend less on the ingredients).

Final step: Check your spending habits against the USDA’s monthly reports on national food budget averages. (In October 2019, the average cost for a family of four with a liberal food budget was $1,107 to $1,296—good to know.)

1. Plan Your Meals Based on What’s on Sale
About that in-season produce: There’s a reason a pint of strawberries (purchased on the East Coast) costs $6 come wintertime. Instead, be selective about your ingredients and source recipes based on on-sale items. Shopping during the colder months? Squash and Brussels sprouts are a total win. Come summer, go nuts buying avocados, berries and more. Sure, you can buy all these items year-round, but you’ll pay more for them depending on the season. (You can also supplement with frozen fruit, depending on the recipe—another way to save.)

2. Repurpose Leftovers
You can’t guarantee you’ll have extra after every meal, but if you can plan for that—say, a stew that you can get a second meal out of—it’s one of the easiest and most effective ways to save. It’s also what makes meal planning critical: It doesn’t take long to sit down and map out what you’d like to eat (accounting for what’s in-season), but it can make all the difference on your wallet.

 3. Familiarize Yourself with Your Pantry
The question: What items are you stockpiling in your pantry? No clue? That’s a financial problem, especially since it all but guarantees you’ll have repeat expenditures, not to mention the risk of food going bad. (Yes, even the canned variety.) Keep a list on the door and update it. When you finish something, cross it off and add it to your grocery list. Savings start with organization, after all.

 4. Skip the Prepared Foods Aisle
Of course it’s easier to buy a big container of quinoa salad, but the cost (about $8) is significantly more than making it yourself (about $4). Do the math and keep track of the savings. You got this.