How to create a grocery budget

While my kids were younger, we operated as a single-income home. It sounds bananas in this economy, and it's just as hard as it seems, but it's the reality for many families in the US. Having a budget to stick to is essential when you're living on a single income as a family or when you're trying to stretch your hard-earned money, which many of us are doing right now — kids or no kids. 

Inflation is at an all-time high, and the Federal Reserve is trying to stave it off by increasing interest rates. But Americans are still living in financial distress; most of us are feeling that pressure.

Also: How to cut your grocery bill by shopping online

According to the Bureau of Labor Statistics, we spent an average of $412 a month in groceries in 2020, with an average number of 2.5 people per consumer unit. That's about $164 per person a month in one household. 

Americans are spending more on food each year, and inflation is the root cause of it. The share of disposable personal income spent on food in the US in 2021 increased to 10.3%, compared to 9.4% in 2020. Food prices also rose by 10.8% from April 2021 to April 2022, the highest percentage increase since 1981.  

How to create a grocery budget

You and your family need food to eat, so grocery shopping is a must. If you don't have a budget for household expenses including groceries, however, you're likely paying too much for them. 

Step 1: Budget for groceries

We've all heard the phrase ignorance is bliss. But is it, really? The times when you ignore the balance on your bank account need to end. You don't want to continue experiencing mini-heart-attack moments — ones spent wondering if you'll be able to afford what is in your cart.

A budget is a simple thing to ensure you never let your expenses exceed your income. But why doesn't it seem simple? The truth is there are many reasons why most people in the US struggle with budgeting: it's tedious, it takes mental energy, it doesn't seem as important as other tasks in the moment, and more. There is also shame associated with budgeting, particularly if you know you've already made financial mistakes.

Sitting down to make a budget can feel like a daunting task. But once you've done it, you'll walk away feeling accomplished and more at peace more often than not. You can go the old school route and use Excel spreadsheets for budgeting, or you can try one of these apps:

It's all about laying out what comes in on payday and how much you spend. A good way to do this is by looking at your debit or credit card statements for several full month and writing down how much you spent in each category: recurring expenses, groceries, gas, utilities, insurance, clothes, takeout, etc. Then add up the categories and compare the total to your income. This will give you an idea of how much you can afford to spend on each category — with some money to spare for unforeseen expenses.

When you know how much you should spend, that little voice in your head will helpfully alert you when you're going over budget. 

Step 2: Make a list, and stick to it

Many shoppers fall prey to temptation — even if we don't want to admit it. It's easy to grab a pack of Oreos on an impulse, knowing full well you didn't budget for it. Part of curbing that temptation is to try to remove as much of it as possible.

Whether you wing dinner every night or plan every meal for the week, a grocery list is a good way to both remind you what you need and help you stick to the budget. 

When you shop online, it's much easier to skip the cookie aisle. You make a list, search for each item on that list, add the items to your cart, then check out. No candy at the checkout line. No kids screaming for overpriced character gummies. No useless “as seen on TV gadgets” to lure you in. You curb the impulse, so you don't pay for it when you check out. 

When I run out of something at home, I simply add it to the cart on the grocery store app on my phone and keep adding as the week goes on until I'm ready to check out. Some good apps to make grocery lists are Todoist, Cozi, AnyList, Flipp, Yummly, or you can use the notes app already on your phone. 

Step 3: Use online tools to save money

Online shopping helps you choose the lowest price on an item. When you search for pasta sauce online, for example, you can sort your results in ascending order, where the lowest-priced items come up first.

Also, you can take advantage of any sale and featured categories. Like brick-and-mortar stores, online grocers also have deals to push out products. Sometimes clearance items aren't available online, but most stores will let you shop through their sales or featured discounts.

We all have some favorite brands where we don't compromise. But I like to save money where I can, so I'll be searching for the cheapest option for all other items. 

Step 4: Loyalty cards and coupons

Many grocery stores have a loyalty program that offers members or cardholders better discounts, particularly local stores. And since getting a loyalty card is free, all you have to do is sign up either on the website or the next time you visit the store. 

Coupons also are available online, with manufacturer coupons and store coupons available on the store's website or on sites and apps like Flipp, Ibotta, and Coupons.com, for example.

With inflation, it's no surprise that 21% of shoppers are using coupons more than they did in the past. Any way you can save a dollar adds up in the end, so get that virtual coupon book out and get shopping.

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