How to Create a Food Budget for 2021

Woman opens fridge and puts away groceries

Everyone needs to eat, but your eating habits may have changed a lot during 2020. While food expenses are a necessary part of any monthly budget, there are practical ways you can reduce food costs.

Get the lowdown on creating a monthly food budget, as well as other steps you can take to stick to personal savings goals in this area, below.

Calculate your typical monthly food expenses

According to Kitchn contributor Michaela Cisney, you should track your food expenses for one month to help establish a baseline. You’ll also want to keep each receipt from the grocery store since you’ll need to itemize food expenses by category. Cisney recommends using a digital spreadsheet to help you keep tabs on everything.

Categories can include drinks, frozen meals, baked goods, meat and fresh produce. It’s also a good idea to include how much you spend on eating out each month.

Compare your food spending with USDA food plan averages

Next, compare your monthly food expenses to those in your area, Lifehacker contributor Melanie Pinola says. A great resource is the USDA’s food plans listed online, where each plan falls into one of four categories: thrifty, low-cost, moderate-cost and liberal.


This resource lists average national costs for feeding a household of two or four, as well as a per-person weekly and monthly price estimate for feeding an individual based on gender and age. Use one of the monthly amounts as your total monthly food budget depending on which plan best fits your income level.

If you still need help determining the monthly amount you should allocate for food, browse online for a grocery calculator tool or explore the app store for a related app.

The grocery budget calculator available on the Iowa State University website can also be a helpful resource to find your budget.

Use money-saving apps

Now that you know what you’re spending and have a goal in mind, you might want some help sticking to that budget. Smartphone apps can be your best friend here.

For example, Food on the Table allows you to easily plan your meals for the week based on that week’s sales at a particular grocery store. This is a great option for those who simply don’t have time to browse sale ads from different stores. The app lets you input your family’s food preferences and automatically generates five meal plans based on matching items on sale at a grocery store nearby.

Favado is another excellent app. It lets you create a personalized shopping list and notifies you when your favorite products go on sale so you can take advantage of the savings.

Smart swaps: What to buy and what to skip to help you save money

If you think saving money at the grocery store means buying only the cheapest generic items, think again. It’s all about being smart with your decisions and spreading around the cost so you can buy what you like without spending a ton.

Here are some key principles to keep in mind as you prepare a shopping list.

Eating meat is much pricier than eating vegetarian. There’s no need to swear off meat completely, but working a few non-meat meals into your week can make a big difference. You can also reduce the amount of meat you use in recipes and substitute it with beans, nuts, cheese, and other high-protein items.

Convenience foods can quickly add up. Buying pre-cut fruits and vegetables, rotisserie chickens, and boxes of granola bars will all put a dent in your wallet. Instead, do a little extra prep work yourself and save yourself some cash when you buy whole produce, uncooked chicken, and oats or nuts.

Don’t assume smaller packages are always cheaper or buying in bulk is a better deal. Most grocery stores show the price per ounce on the shelf label. Compare a few items before you choose – you might be surprised.

If you’re craving something more expensive – Manchego cheese, anyone? – but aren’t sure how to fit it into your budget, balance it out with lower-cost ingredients. You might pair that fancy cheese with cheaper dried pasta and in-season veggies for a more reasonably-priced meal.

Eat according to the seasons. Did you ever wonder why apples are so expensive in the summer (and don’t taste as good) and berries are so expensive in the winter? Even though most produce is available year-round, that doesn’t mean it’s always a good deal. Food grown in the right season will be cheaper for you as well as more nutritious and better for the environment. Check out the USDA’s seasonal produce guide to see what’s available now.

Additional tips for reducing food expenses

  • Part of a budget is prioritizing what you most need while eliminating items you can live without. When it comes to a food budget, there are a few great ways to keep costs low.

Forbes contributor Mindy Crary suggests limiting your alcohol consumption. Limit your favorite adult beverage to once a month or for special occasions.

• Limiting your dining-out expenses is another smart choice. Focus on reducing frequency rather than dollar amount, Crary advises. “Instead of saying that you’ll cut take-out from $200 per month to $100 per month, just commit to going less often.”

• If creating a grocery list, shopping, and preparing meals is something you dread, look for shortcuts. Do a quick Google search for “meal plans” and you’ll discover hundreds of websites and blogs that have done all the work for you. All you need to do is pick a menu you like and go. 

• Always hit the grocery store with a plan in mind – and never show up hungry. When you don’t know what you need, you run the risk of choosing a hodgepodge that doesn’t add up to a real meal, or just getting frustrated as you wander the store. And when you’re already hungry and facing down the bakery section – well, it won’t be good for your wallet. 

  • • Making meals ahead of time and freezing them is another safeguard against dining out expenses. Crary suggests setting aside three to four hours every 10 days to make a few easy meals ahead of time, such as casseroles, rice and beans, stir fry mixes, and root vegetable medleys.

More Budgeting Tips

By creating a simple food budget and applying some straightforward strategies, you can dine on the cheap, save money and eat healthier. 

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Published by Minster Bank
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