Cutting Your Grocery Bill Part I: Setting A Budget

I was in the process of writing and filming my much-demanded “how I cut my grocery budget in half” content when I realized I skipped over a critical first step: setting a grocery budget!

Setting a grocery budget is step #1 to spending less on groceries, and it deserves its own post. So here we are.

Why should you have a budget?

“What can’t be measured can’t be managed.”

This is something I always remind my wonderful team at CLOVE + HALLOW and I try to live my life by it. It’s nice to have ideas and goals, but without a concrete metric to measure them by, you will make slow – or even negative – progress.

For groceries, the metric is your weekly and/or monthly budget. It is typically measured by tracking through a manual platform such as spreadsheets or an automated digital platform like Mint.com.

(Personally, I started with Mint and then once I had a solid grip on our budgets, I moved to a banking system that made it incredibly easy for us. I will go into more detail on this another time, but my husband and I have 9 joint bank accounts for our home that have automatic transfers set up. When we get paid, a set amount is distributed to each account. My grocery budget is deposited into my checking account every two weeks so I always know exactly how much I have to spend.)

Long story short, if you’re looking to spend less and live more comfortably, you need a system for tracking and managing your budgets.

And even if you have plenty of discretionary income or aren’t worried about your grocery budget right now, I still recommend firming up a budget and tracking system for yourself. I have been in your shoes and trust me when I say it is always a good time to create positive financial habits.

Calculating Your Grocery Budget

If you’re not looking to save money or reduce your grocery budget, your “budget” is pretty simple: average your grocery trip costs to find a rough budget estimate and just keep doing what you’re doing.

If you ARE looking to spend less on groceries and set a firm budget, there are really only five variables that matter:

1. Number of people in your household. $100 per person per month, starting at $300/month, is the gold standard. More mouths = more money.
2. If your grocery budget also contains household goods and toiletries. Some people purchase their shampoo and toilet paper at the grocery store, some don’t.
3. If you shop organic/grassfed/”clean”. Organic items are more expensive to produce therefore they cost more money.
4. Where you live. My grocery budget living in Atlanta is not comparable to a grocery budget in Manhattan.
5. Eat-in rate. Some people prepare most of their meals at home using groceries, others go to restaurants or order take-out frequently. One isn’t more “right” than the other but the answer directly impacts your grocery budget.

At first I thought I would discuss each of these variables and how they impact your budget in extreme detail so each of you could calculate your own budget, but that seemed complicated and left too much room for error.

Instead, the nerd in me decided to distill it into a spreadsheet template that automatically calculates your budget target for you.

I assigned each variable’s value by doing some googling on average budgets, facilitating my own research by talking with a bunch of you, calculating the grocery costs of various popular online meal plans across a range of budgets, and looking at the USDA’s four different levels of grocery budgets (thrifty, low cost, moderate, and liberal) which are used to create food stamp budgets and set alimony for various income demographics. (Interesting tidbit: most people who said they were on a tight budget actually were in the top two tiers of grocery spending, and many people I talked to far exceeded the highest liberal budget.)

Once you open the template through the link at the bottom at the bottom of this post, there are directions at the top of the spreadsheet for how to use and interpret it. It’s all very simple, but please read it in its entirety for the smoothest experience.

Before I give you the link, I have something super mega important to say: This is a template for people who are looking to reduce their spending. If the output seems low, remember that this number is just a suggestion – a point of reference, really – and certainly not a rule you must abide by or judgement on you and your household.

If you see the suggested budget and think, “holy shit, there’s just no way that’s possible for us”, don’t worry. My next post is all about the super easy strategies I used to cut my grocery bill in half and to keep my monthly grocery shops within a $20 range of my target budget each month.

Without further ado, calculate your budget here:

CLICK TO ACCESS BUDGET CALCULATOR