How Much Should I Spend on Groceries?

Groceries, housing and other essentials should take up no more than 50% of your monthly income.

Lauren SchwahnMar 3, 2021
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There are a few obvious ways to learn how much money you spend on groceries every month: You can add up receipts, view your credit card transaction history or track your spending with a budget app.

But figuring out how much you should spend on groceries isn’t quite as straightforward.

Here’s how to work grocery costs into your monthly budget.

What is the average cost of groceries per month?

The average cost of groceries for U.S. households is $4,643, based on 2019 data from the U.S. Bureau of Labor Statistics. This works out to about $387 per month. Grocery spending has likely increased during the pandemic with people going out to eat less often.

While you can use this average as a benchmark for your own spending, it isn’t the best indicator of how much you, or others, can actually afford.

What should my monthly grocery budget be?

Your grocery budget depends on many factors, including where you shop, what you buy, how many people you’re feeding and whether you shop online or in person. Not sure where to start? Here are a couple of guidelines you can use to come up with a number.

Follow USDA food plans

The U.S. Department of Agriculture creates monthly food plans you can use as guidance for grocery spending. The plans estimate the average cost of nutritious, home-prepared meals and snacks by gender and age, and are broken into four different spending levels: thrifty, low cost, moderate cost and liberal.

These are the latest plan totals at the time of this writing for a family of two, defined as a male and female between ages 19 and 50:

  • Thrifty plan: $402.80 per month.

  • Low-cost plan: $517.50 per month.

  • Moderate-cost plan: $640.20 per month.

  • Liberal plan: $800.70 per month.

These food plans can help you create a monthly grocery budget that accurately represents your household, but they’re still averages, and won’t be perfectly tailored to you.

Use the 50/30/20 rule to budget for groceries

The 50/30/20 budget can help you work out how much to spend on groceries based on your specific income and expenses. Following this framework, you spend about 50% of your monthly after-tax income on needs, 30% on wants and 20% on sayings and debt repayment.

Most groceries fall under the “needs” category, but not every item at the grocery store qualifies as a necessity. Purchasing filet mignon for a special dinner would be a “want,” for example.

If your monthly take-home pay is $3,200, here’s how you’d divide that among your expenses:

  • $1,600 for needs like basic groceries, housing and transportation.

  • $960 for wants like meals out, entertainment and travel.

  • $640 for savings and loan payments beyond the minimum.

How much of that $1,600 should go toward groceries depends on the monthly cost of your other essentials. Let’s say you pay $850 for rent and utilities, $200 in student loan payments and $415 for your car payment and insurance. That adds up to $1,465 — leaving just $135 per month for vital groceries. If that won’t cover everything you need, or you want to plan for some treats, you can take additional money from your “wants” budget.

Know-how for budget building

Budgeting 101: Review your connected accounts in one place to spot your overall trends.

Find ways to stretch your grocery budget

If you’re struggling to fit food costs into your budget, look for ways to save money on groceries. Start with these simple strategies:

  • Look in your refrigerator and pantry before making a shopping list.

  • Join store loyalty programs to earn rewards.

  • Check the Sunday paper, use an app and explore other ways to get coupons.

Your financial position, expenses and spending behavior will presumably change throughout your life. Make sure to revisit your grocery budget every month and adjust.