Are You Spending Too Much On Groceries?

One of the most challenging tasks when trying to rope in your finances is creating a budget. It's not so much gathering all of the data...that's the easy part. Maybe a bit time consuming, but still rather easy. Nor is it plugging those figures into a software program or spreadsheet. It's not even seeing the results, good or bad, once you hit the enter button. Where I find most people have problems is figuring out what they should be spending in each category.

How much should your family spend on housing expenses? What about utilities, transportation, debt, and groceries? While every family may have different needs and preferences, the American Consumer Credit Counseling published some helpful material in their Personal Financial Workbook. It looks at the recommended expenditure percentage of a family's income that should be directed towards various spending categories based on national averages.

However, one category that still gives consumers the most grief is how much should be dedicated towards food. The Personal Financial Workbook suggests 20% be directed to a category labeled "all other expenses" that includes food, insurance, prescriptions, doctor and dentist bills, clothing and "personal", but it doesn't really give us a transparent idea of how much we should expect to spend at the checkout. 

The United States Department of Agriculture has pulled up the slack by publishing their Official USDA Food Plans:Cost of Food at Home report that drills down into what we should expect for this line item entry each month.

The report is broken down into multiple areas to cover both individuals and families and takes it a step further by drilling down into age groups as well. According to the report, a family of two between the ages of 19-50 should expect to spend $618.40 monthly ($142.70 weekly) on the moderate cost plan. If you're up for meal planning with ingredients you can find on sale or even using a few coupons, you can get those costs down to around $387.20 monthly for the Thrifty Plan, or $495.60 on the Low-cost Plan. 

Now, these recommendations only include costs for preparing meals and snacks at home. If you plan on dining out frequently, these figures won't help much. But what if your household income doesn't add up to the numbers shown? For instance, the $618.40 dollar amount and the 20% figure above would work only if your income was $3,092 per month. What adjustments must be made if your bring home income is less than that?  

While these charts give us a guideline to reference, the only budget that will work for your family is one that is tailored specifically for you. When it comes to finances, and grocery shopping, a "one-size fits all" plan doesn't always "produce" success.

So don't be "chicken" to talk with a financial professional. It may be the best way to "beef" up your budget and savings.

Michelle Kuehner is a Registered Investment Advisor Representative and President of Personal Money Planning. She is also a Certified Credit Counselor and Certified Financial Health Counselor, writes Fix Our Budget blog, and has over 25 years of experience in the financial industry.