One of our major monthly expenses would be groceries. As a matter of fact for many of us it is the biggest expense after mortgage (and possible health insurance). Do you know
how much you spend on groceries every month? Do you know how much you are supposed to be spending on groceries a month?
If you’ve read the news last week, Gwyneth Paltrow is participating in the Food stamp Challenge #FoodBankNYCChallenge. Please stop hating her for it. Yes, she’s rich; she’s not doing this for herself though.
In some of the articles on Gwyneth and the Foodbank Challenge it mentions the Thrifty plan that is used to set the allowance for food stamps. They are referring to the USDA Food plans. Did you know the government has statistics on how much families spend on groceries?
I knew and wrote about it in my book. When we started looking at savings, we were able to determine how much we spent on groceries every month as we keep close track of our spending using Quicken. We pay by credit card (I don’t think credit cards are bad when you use them right) so it’s easy to track. What we didn’t know after we determined how much we spend, was whether that was a lot or little. I figured it was a lot. In comes the United States Department of Agriculture. They keep track of it. As a matter of fact they release a report EVERY month for what the cost of food is.
Not only will they break it down for you by cost of food for individuals, based on age and gender (bit surprised about the gender there) but it also looks at families of 2 and families of 4. Along with all that detail, they will also categorize it for you in four different plans:
- Thrifty Plan
- Low-cost Plan
- Moderate cost Plan
- Liberal Plan
I don’t know why the most expensive plan is called Liberal (maybe those shoppers apply their mayonnaise to a sandwich too liberally) but nonetheless it gives a good indicator of where you should be as an individual or as a family, based on your life style. Oh and btw, not sure how Gwyneth came to the amount of $29 a week as, based on the February 2015 report (The latest available as of this writing), a person of her gender and age actually is allowed $38.40 for a week. Still not a lot.
Gwyneth and the SNAP challenge aside, these reports can be very useful. When I first started looking at it we landed in the Moderate cost plan. I was actually quite pleased about that however, one thing that may have skewed that number was the enormous amount of money spent on dining out (things creating a budget can make clear to you). What you spend in restaurants will to some extent deduct from your groceries.
It has never and will never be our goal to live on the Thrifty plan. Yes some money bloggers are all about the Ramen Noodles, extreme coupon-ing and re-application of aluminum foil but we’re not that family. We like to live below our means but not at the cost of living.
So how can these government reports help you out? Well for starters it can give you an idea of where you are on the chart, where you want to be on the chart and based on your actual spending figure out how to get where you want to be. Take an inventory of your grocery spending (preferably over a longer period than just a month as I explain in budgeting, know what you spend) and see where you fall. Maybe you’ll get pleasantly surprised and fall in a category below the one you expected yourself in.
If not, see if you’re comfortable with the category you’re in and again if not, start taking stock of what it is you are actually shopping for. This latter unfortunately is not easy, as you will have to look at individual receipts. I recommend that looking at least the last 10 grocery receipts (more would be better) and see what stands out. Look at particular items that stand out, especially repetitive ones. Were you aware that those BBQ chips actually cost $4 per bag? Do you have to eat a single-serving Stouffers lasagna for lunch every other day? Don’t get me wrong, those are good but certainly not cheap. Are there certain brands you buy that can easily be replaced with store brand items?
There are lots of ways to save on groceries. Who knows maybe one day I’ll start my own list of ways to save on groceries. For now, simply search the web or check out #groceryshopping on twitter and you’ll find plenty of ways.
Before you start digging for deals however first check where you fall. Are you Thrifty, Low cost, Modest or Liberal (not in the political sense). Maybe you’re happy just where you are.
In my book I talk about how we cut over $20,000 from our expenses annually, this was just one of them.
Good luck reaching your financial goals.