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In planning out a budget, what is a realistic amount to budget per person for food expenses per month?

EDIT: Thanks to Ether's answer, here's a clarification: What guidelines or warning signs are there that we can use when planning out the food portion of our budget? I've seen guidelines for housing expenses, but nothing for essentials such as food. What is a normal amount to use as a guideline? Percentage of salary? Fixed amount per person?

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The most cost-effective calories per dollar are probably soda. You could consume three 2L bottles every day and buy them on sale for $1.00 total. Works out to roughly $30.42/month. Of course, you would likely pay more in health & dental care over the long run. –  Pete Dec 21 '11 at 20:13
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9 Answers

up vote 17 down vote accepted

USDA publishes a document on a monthly basis that can be used to estimate food costs for a household and provides four "tiers": thrifty, low-cost, moderate-cost, and liberal.

It likely varies by region, as well as by personality. In our family, where both my wife and I are frugal, we usually come in below the "thrifty" level. On the other hand, incomes in this area are literally only 65% of other places in the country.

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There is no real answer for this, because it totally varies depending on the composition of your family, the standard of living you are accustomed to, and where in the world you live. The answer for you will be different than for everyone else.

The best thing you can do is to start keeping track of your food expenditures, either by collecting your receipts and totalling them at the end of the month, or by making a note of them after each purchase (e.g. in a notebook you keep in your purse or pocket). After a few months you will see what your average food expenses are, which you can use as a baseline for your budget. Once you've done that, you can assess whether you're spending too much on food, and then you can look for ways you can cut back (plan to buy your common items when they are on sale, buy in bulk, cut back on take-out and restaurant meals, etc).

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Thanks for the reply. I guess that's what I mean: how can I assess whether we are spending too much on food? We know how much we spend each month, and limit eating out to twice a month, but what guidelines should we use whether to target "food" more aggressively in our budget? –  Don Aug 4 '10 at 22:30
    
By the way, great advice in your answer. –  Don Aug 4 '10 at 22:35
    
@Don - "too much" is all relative to your current family economy. For example, some of the guys I work with have no problem throwing down $10 a day for lunch, while I absolutely hate spending more than $5 or $6 a day on lunch. –  Jagd Aug 5 '10 at 17:18
    
@Don - You might want to split your groceries and dining out into seperate budgets so you can get a better handle on how much money actually goes towards each. If you are dining out you can eliminate that from your budget to save money, but generally you can only cut your grocery budget by so much before you start impacting your typical meals. –  rob Aug 29 '11 at 18:59
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To add a counterpoint to 0A0D's answer, without being completely frugal the budget for one person that eats out around twice a week would be somewhere around $65-80 a week. Here are some assumptions:

Breakfast: cereal, oats, or comparable: < $1
Lunch: sandwich + snacks: $2-3
Evening: salad: $2 or cooked meal: $3-5; average $3-4
Other snacks: < $1

Daily total: $6-8
Weekly total: $42-56

Eating out: additional $10-13 / meal * 2 = $20-26
Total: $62 - $82
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For my family of 3, we pay approximately $200 every two weeks. That is being frugal. We use lots of coupons.

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Thanks, that's very helpful. –  Don Aug 5 '10 at 1:17
    
My wife and I and 2 kids (the 3rd is newborn and breast feeding) spend about $460/month. We are not big coupon people, although recently we have been increasing usage. To know whether you feel affordable though, I would ask around people you know in your area. You may find some spending half what you do with similar family size, then you can ask what they do. Or you may find everyone spends more than you, you can feel pretty confident you aren't going crazy. –  Andy Wiesendanger Aug 30 '11 at 16:19
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Maybe this is not really to the point of your question as it was worded, but rather than seek out guidelines for how much one should spend on food, I would start off differently. Guidelines would suggest targets that others have found doable and sustainable. I would rather find those for myself. So here goes:

My approach would be to minimize total disutility or "pain". You really need to decide how much you enjoy groceries, cooking, eating out, etc., and balance that against how much you could save by doing with less of it. If you are trying to cut back on your overall spending, first figure out if spending on food and eating out is a large part of your total budget -- or alternatively, how much discretionary spending on food (eating out, buying fancy groceries) is as a fraction of your total discretionary spending. If it is a small part, then it would be better to concentrate on another area of your budget. If spending is sufficiently large as a fraction of your spending, then determine how much you could reasonably cut out to start off with. How much would that achieve?

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That's good reasoning, and we've kind of been through that. It seems large enough that we should target it for reduction (we were surprised by our historical amount), but I don't know if that's practical. –  Don Aug 5 '10 at 15:08
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Leaving aside very high-end restaurants, food costs relative to income tend to level out much more quickly than other common items like houses or cars. Even high-quality steak can only cost so much :) so it is difficult even to say how much of your income food should reasonably consume. At the other end of the spectrum, it's also quite possible to have - relative to your income - a crappy car or even no car, but there is a pretty hard floor on how little you can spend on food and still be healthy.

I would simply suggest taking a poll of people who live/work near you and appear to have a similar standard of living & income (+/-25%). That should give you a good idea to start.

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Where I live in San Francisco, you can actually spend a small fortune in a tiny grocery store! But your point stands. Just sayin' ;) –  dkritz Aug 5 '10 at 7:06
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Me and my future wife spend about 200€ in a month. We are very careful when we buy stuff, always going to the cheaper store for any item

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I budget $200 each for my girlfriend and me per month. I could cut probably half of that cost by buying conventional produce, meat, and dairy instead of the organic, grass-fed, free-range stuff I usually buy. I rarely buy packaged, processed food; cooking from scratch tastes better and costs less.

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I think it might be better to work backward in this case. First determine your discretionary income, and then allocate that to the various areas you'd spend money on. It's nice to hear "you should spend X% of your income on food" but maybe for you, it's more important to eat out 3 time a week including one super-fancy per month than it is to go on vacations.

Food is obviously a requirement, unlike travel or electronics, but fancy or expensive food is not. So I'd say that the food allocation of your discretionary income should be the amount that's above a certain baseline - a reasonable, "thrifty" amount.

This might be something like assuming 5 inexpensive take-out meals per month (say $8 each) and cooked food the rest of the time (maybe $5-6 per day). So a rough estimate of your baseline might be $200 or so.

Now how much do you like to eat out, or buy lobster and duck to cook at home? How much do you travel? If you've got $5000 to do what you want with, would you rather take a $3000 trip and have an extra $2000 to spend on food? That's an overly simplified case, but you get the idea...

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Yes, this. You can look at food budget as "I need to budget at least $x to stay alive" (which can be pretty low), or as "I choose to plan on spending $y on food, groceries, and eating out." y can be as large as you like as long as you're living within your means, covering your other expenses, and feel it's the thing you most want to spend money on. If you like organic artisanal food and you can afford it, go for it. –  poolie Aug 31 '11 at 0:11
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