Part 1: Don't underestimate the power of awareness & priorities
If we had a quarter for every time we get asked about Food (How much should I budget for groceries? Eating out? How much is too much? Why do I always overspend on food?) we could eat out every night of the week without going over budget.
It’s a tough one. Because unlike so many of your other monthly bills, it isn’t a fixed expense. And it comes up at least three times a day!
It’s easy to overspend on food. It also always seems like one of the categories where you could (should?) cut back. But then, you overspend on food. We get it and we are right there with you, counting down the days until your Eating Out category is replenished at the beginning of the month.
So if you’re just getting started with budgeting and YNAB, you’re probably being hit with a reality check. Holy cow you spend a lot of money on food! But here is another reality check: maybe you aren’t overspending, but rather, under budgeting. If you spend $600 on groceries every month, you can try and budget $400, but you are most likely going to be rolling with $200 worth of punches, because you spend $600 every. single month.
That said, you can get be more disciplined with your food budget. We suggest you start here:
Knowing Is Half The Battle
The first thing you need to do in order to reign in food spending is simply know what you are spending. Awareness opens your eyes and causes you to think twice. Budgeting can help with that. The budget can give you awareness in a few ways.
As you start tracking your spending, you’re going to get an average of what you’re spending in each category. This will help you figure what you’re spending on food. You can also look in the activity column in the grocery category to see all the purchases that led to that amount. This can give you insight into your spending patterns.
If you don’t plan ahead—you will spend more.
If you go to the store every day—you will spend more.
If you go to Costco—you will spend at least $300.
There are some realities—and being hyper-aware of them—can help you avoid and/or, at the very least, minimize the damage.
What Matters To You, Matters
Now you need to decide what’s important to you when it comes to food. The biggest question we get about food: “How much should I be budgeting for food?”
Here’s the answer—warning it’s kind of annoying—it totally depends on you and your priorities.
There’s really no magic number and here’s why: Someone else’s number reflects their priorities, not yours. Plus, there are so many variables that affect food costs. Where you live, what stores are available, dietary needs. Even if you come up with a national average - it would have nothing to do with your life and circumstances. So stop feeling guilty. And find the number that works for your family and your budget—and feel good about it.
Let’s say experts recommend that 10% of your income should be spent on food. If you get a raise, does that mean you should spend more, even if you don’t need to? Of course not.
When it comes right down to it, the only average that matters is yours. Track your spending on food. Use your budget to see what your averages are and if you feel you need to, then work to reduce those averages.
(PS—This is the first in a three-part series. Next up: Solutions to Common Problems. Stay tuned!)
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