Don’t let food eat up too much of your monthly budget
We all need nourishment to keep us alive. Of course, there are many ways you can get that nourishment. Perhaps you go to the grocery store. Or maybe you eat out frequently, whether at a sit-down restaurant or a fast-food place or take-out.
Regardless of how you get that nourishment, it usually costs money. Without a budget of some kind, many people don’t have a full grasp on how much they spend on food, particularly when eating out. When you decide to create a budget or simply track expenses, you may find out just how big the food expense is. Food is a variable expense and one of the biggest household expenses.
Food is a variable expense. Once you draw up a budget, that’s a very good thing
That line item on the budget includes what you spend on hitting the local coffee shop for the $5 latte or stopping by the local bar for a $12 glass of wine. And, there are a number of signs that you may be spending too much on food – a lot of wasted and spoiled food, not looking at your receipts, your entire social life happens in restaurants.
The goal is to budget food expense as an average monthly expense. Keith Newcomb, founder of founder of Full Life Financial in Nashville, Tennessee, said keeping expenses as close to fixed as possible helps the cash flow.
One way of doing it is looking at all of your food-related receipts – groceries, restaurants, coffee shops, bar tabs. Tally it all for a year and then calculate the monthly average. If the food expense is your biggest one for the month, it may be time to evaluate how you buy groceries and how often you eat out.
You can get a guideline for monthly cost averages through the U.S. Department of Agriculture to use as a benchmark. For example, a Family of four with children 6-8 years old and 9-11 years old costs an average of $1,281.60 each month on a liberal plan. The monthly cost is half that for thrifty people.
Restaurants are tasty and convenient, but they eat away at your budget fast
If your goal is to build savings by cutting expenses, there are a lot of ways to become more frugal, but starting with paring food expense could be one of the easiest places to start. The biggest way is simply to stop eating out for a while and eat at home. This way, you avoid the huge mark up on restaurant food.
You can cut the budget by replacing eating out with prepared meals you pick up at the grocery store. But if you truly want to save, nix even the prepared meals and cook yourself. You don’t know how to cook? You can learn. Your budget and savings account will thank you later.
A simple shopping list can save money on your food budget
A lot of money can be wasted on groceries even after deciding to take a break from eating out. Researchers at the University of Vermont and the University of New Hampshire recently concluded that Americans waste about a pound a day per person through tossing uneaten food or spoiled food.
Creating a shopping list based on a weekly meal menu helps save money and keeps you from wandering through the store buying items that you likely will trash later. “People who meal plan make fewer trips to the grocery store, spend less money on food, waste far less food, eat healthier, and enjoy the peace of mind of knowing what’s for dinner after a long, busy day,” according to Dawn Gifford, creator of sustainable living website Small Footprint Family.
There are apps to help you save on your food budget
Of course, like seemingly everything else in the world, you can choose from several mobile applications that help with meal planning and menus.
If you’re one of those that freak out at the mention of a budget, Newcomb said you don’t have to approach your finances in such a strict budget fashion. The idea is to get your checking account growing each month, he said, adding that taking an honest look at expenses is a start.
Newcomb said he suggests to his clients that they do a line-item mark-up of spending in their checking statement: “have to”, “just wanted to”, and “wish I hadn’t”. Then, he said, budget so you don’t have a lot of “wish I hadn’t.” With the food expense, you may find the “wish I hadn’t.”