For the past four years, we have followed the Dave Ramsey financial peace plan. A huge part of this plan is writing down and sticking to a monthly budget. We tell every dollar where to go, including what we spend on food. Setting and sticking to a budget is the number one thing you can do to become debt free and find financial freedom. If you are bogged down by your finances, know that freedom is possible. We are living proof. You can read more about our financial story here. Both of us were once deep in debt and we have now been debt free for almost 4 years. Today I’m sharing how we set our monthly grocery budget, and a few tips that help us stick to it.
1) Track your spending.
Before you set your grocery budget, it will be helpful to track your food spending for one month. Keep you receipts and add up your totals at the end of the month. Was this a typical month or was your budget off kilter because of guests visiting, birthday parties, etc? Add or subtract to accommodate those factors. This will give you a ball park figure to add to your total budget.
2) Create your larger monthly budget.
Your grocery budget is a part of your larger monthly budget. There are a multitude of budgeting tools out there. We prefer Dave Ramsey’s Total Money Makeover budget tool. It takes you through setting up a budget step by step. If you want to do it on your own, simply write down your total monthly income and start subtracting your expenses. Account for your tithe or giving, rent or mortgage, utilities, and then groceries, and any debts. After the essentials you will see what you have left to spend on the non-essentials like dining out, gifts, travel, etc. You will probably need to tweak the numbers a few time to get everything just right. Don’t be discouraged if it takes you a few months to get it right.
3) Take your grocery number set in your larger budget and divide it up.
How much do you usually spend on meat? We buy meat only when it is on sale and freeze it in individual baggies or in freezer meals. We also eat at least one vegetarian meal every week to reduce our spending and our environmental impact. What are your budget busters? Alcohol, fancy cheese, brand name foods, seasonal items… Each week you will want to make sure your basics are covered before you buy a bottle of wine or (in my case) a fancy cheese. Goat cheese is my love language, y’all. If you are a soda drinker, wait until they are on sale and stock up. One month we busted our grocery budget buying Christmas candy. I’m so not kidding.
4) Meal Plan
Write down your dinners for the week and stick to the plan. I’ll share more about how we plan our meals next week, but know that without a plan it is easy to lose track of your spending. Some folks use coupons to help them plan, but I have more luck shopping at Aldi. When we started shopping there it cut our budget by almost 40%. Seriously. They aren’t a sponsor of this blog (but the totally should be), we just love the store. We gave up name brands almost entirely. There are a few products that truly are better with name brands, so we look for coupons for those favorites.
5) Use cash envelopes.
Take out the entire monthly grocery budget in cash at the beginning of each month. Put it in your grocery envelope and take it with you every time you go to the grocery store. If you run out before the end of the month, try your best to use what you already have on hand and get creative. Using cash will help you immensely as you try to stick to your budget.
How do you keep your grocery spending on track?