Creating a grocery budget can feel challenging and a bit overwhelming – but it doesn’t have to be that way. Today, I’m sharing my three tips to help you create and maintain a family grocery budget that works for you so that you can achieve financial success in other areas as well. So whether you’re new to the budgeting game or have been at it awhile, grab a pen and paper and let’s get started.
Title: 3 Simple Ways to Create Your Family Grocery Budget
Well hey there and welcome to the Financial Fix Up Podcast. I’m your host, Sarah Brumley. Today I’m excited to chat with you about the grocery budget. Specifically we’re going to cover what a grocery budget actually is and three simple ways to create your family budget so that you can stick with it. Because we all know that success is dependent on the follow through and we can’t follow through if we don’t have a plan.
So today I’m going to help you create that plan.
I know this is an important topic, especially right now as we are dealing with incredibly high prices for food and household products. In fact, when I ask friends and family members what thee hardest part of sticking to their budget, it most often comes down to the grocery budget. And that’s terrible, right? Because we have to feed our families. So, today my goal is to take some of the guesswork out of creating a grocery budget that works for you and your family.
What is a Grocery Budget?
Put simply, your grocery budget is a certain amount set aside for buying groceries, household essentials, and food supplies. When used properly, your grocery budget should help you manage your spending, make smart choices at the grocery store, and ensure that you have enough money for your other expenses so that you can achieve your financial goals.
Ideally your grocery budget, when done right, will allow you to stick to the allocated amount and prevents the need to “borrow” from other budget categories to meet your family’s nutritional needs.
Sounds simple, right? Yes and no. The idea behind it is simple and yet, putting a grocery budget into action can feel challenging, especially when you’re just starting out. So, if you are feeling challenge or a little overwhelmed by how to make this all work, you are not alone.
How to Create Your Family Grocery Budget
Creating your family grocery budget comes down to knowing a few things. First, you have to know your general budget and how much you can allocate to groceries in total. If you only have $200 per month to spend on groceries, the last thing you want to do is to tell yourself you have a budget of $600 per month and end up failing each and every month. No. You want a grocery budget that fits within your income and doesn’t prevent you from achieving your other financial goals – whatever those might be.
Once you know how much you CAN spend on groceries each month or week depending on how often you are creating your budget, it’s time to determine how much you WILL spend. Remember, a grocery budget is designed to help you do more with less, so we are aiming for the least amount that we can spend and still feed our family. By doing so we are able to allocate more toward achieving those big financial goals – like paying off debt or increasing our savings funds.
Trust me, you might not think it’s possible or maybe even worth it to put this work in, but about ten years ago, Justin and I decided that we were going to half the grocery budget so that we could place additional funds towards debt payoff. It seemed impossible but it wasn’t. In fact, by following the tips I’m about to give you, we were able to do just that. And…all without sacrificing healthy food or full tummies.
So, knowing that, I’m going to give you my three tried and true tips to help you create a manageable grocery budget for your own family.
Tip #1: Review Previous Months
This is a good starting point whether you are creating your first grocery budget or are just looking to find additional savings. Go back through the last three months of your bank statements and add up every grocery store charge. Don’t leave anything out because it’s going to give you a really good idea of where you have been and what you need to do going forward.
The truth is that it’s hard to cut back when your family is used to eating a certain amount of something, but by knowing what you have spent, you’ll be able to accurately determine a grocery budget that won’t have you failing month after month.
So, start by reviewing this previous months.
Tip #2: Price Check Different Stores
If you found in your review that you are spending more than you actually have to spend, then it’s time to make cuts. Before you cut out everyone’s favorite foods, consider spending a few hours with a typical weekly grocery list and add up the prices at different stores. You might find you’re able to save money just by changing locations.
In our case, we have many grocery stores around us, but I know that we save significantly if we drive a little further to a grocery store out of our area. Sure, the fifteen or twenty minute drive is an investment, but our money goes a LOT further because of it.
So, take the time to check prices at different stores. It might seem inconvenient now, but my guess is that you’ll thank yourself later when you see the savings applied to one of your bigger financial goals.
Tip #3: Make Cuts or Substitutions
Once you know the price of your typical grocery list and the amount that you’ve consistently spent on groceries over the past few months, then it’s time to determine where to make cuts. Of course, if switching supermarkets has made the difference you need, then you might not need to do this step, but it’s worth looking at anyways. After all, any savings is good savings, right?
You might start with a family budget meeting. At the very minimum you’ll want to have your spouse on board, but if you have older kids or teens, it’s nice to include them in this part of the process. After all, the more buy in they have now, the more tolerant they’ll be when their favorite foods start to disappear.
Together determine the following:
- What can you cut out completely from your grocery budget? (Expensive cereals, carbonated drinks, candy or cookies, etc.)
- What substitutions could or are you willing to make? (Beans for ground beef, quinoa for rice, frozen veggies for bagged salad, etc.)
- What items stay no matter what?
Then, rework your grocery list to reflect those items.
Determine How Much You’ll Spend
The final step in this process is to make the determination regarding how much you’ll spend each week or month as part of your grocery budget. For the sake of this example, we are going to look at this from a monthly perspective, but you could do this from a weekly perspective as well and then multiple the number by 4 to get the monthly amount.
Let’s say that Jane has gone through budget and made the determination that she can reasonably allocate $500 per month without breaking other areas of her budget. Great. That’s the maximum that Jane will be spending each month going forward.
Next, Jane went through her bank statements and realized that she’d been spending $550 per month on average. She panicked a little because she knows she doesn’t have that much to spend going forward.
But knowing that, Jane took the time to meet with her family, do some price comparisons at different supermarkets and was able to make some cuts and substitutions that everyone approved of. Because of that work, she was able to get her monthly grocery list down to a total of $400. Quite the savings, right?
So, Jane knows at this point that there’s no way she and her family are going to be able to keep up with the status quo. There will have to be changes because they can’t afford anything over $500 per month in groceries. But that’s no problem, because she’s been able to get her grocery list well below that maximum.
The question at this point becomes: which amount should Jane choose? Should she stick the maximum to give herself a little wiggle room OR should she aim for the lower number in an effort to save more money.
Well, my recommendation to Jane would be to consider splitting the difference, at least to start with. Because the truth is that the first few months of a budget, grocery or otherwise, can come with expenses that you didn’t anticipate. So, by giving herself a little leeway, Jane will be able to cover those additional expenses and account for them going forward. And, if she doesn’t need the additional money, then she can put it toward one of her bigger financial goals.
That’s a win-win for everyone right?
Of course, your needs and goals are unique to you, so give yourself the freedom to make the decision that’s right for you and your situation.
Use These Simple Ways to Create Your Family Grocery Budget
So, quick review. If you want to create a family grocery budget that actually works for you, consider the following:
- Review Previous Months
- Price Check Other Stores
- Make Cuts or Substitutions
And…I can’t stress it enough how important planning ahead – including meal planning – can be to achieving success with your grocery budget. So, if you want to see additional savings, then make sure to check out the show notes, because I’ll leave you some resources to check out there.
Whatever you decide, just know that I’m cheering you on. You’ve got this! Have any amazing day and I’ll chat with you again next time.
