Perhaps you’ve done some end of the month calculations and you’re noticing that you are spending way too much on food. So much that it’s disappointing to think about. Or maybe you don’t have any idea of how much you spend on food.
If we have the money in our bank account, we can afford it, right? Wrong. Unless you truly want to spend all your hard-earned cash on food for the rest of your life, then sure! But we like to spend ours on holiday trips, technology, gifts for others, experiences, and so on.
Following a food budget is a key to success. Not only does it save you money, but you also learn a lot of discipline along the way. Today, we’re sharing a simple breakdown to help you create a realistic food budget.
Your Income and Past Expenses
This is the first step to creating any budget; figure out your monthly income. If it fluctuates month to month, decide on an average number to use.
Now, the next step may be a bit time-consuming, but you must do it. Add up all your food-related expenses from the last 30 days. Categorize them by ‘groceries’ and ‘eating out’. If you’re not sure how to find all this information, you can look at your transaction history on your online bank account. Some institutions even create a category breakdown for you to easily track food spending.
Make sure you get all your bases covered. Don’t forget the times you bought food with cash and if you use multiple credit cards, check each one’s transaction history.
Subtract the totals from your monthly income. Here’s an example:
$1,800 monthly income – $400 spent on food = $1,200 left
Subtract All of Your Living Expenses
This part will either leave you feeling proud or disappointed, but this is why budgeting is so important to stay on top of. From your amount that’s left, deduct all your other living expenses. Things such as monthly rent, utility bills, subscriptions, gas for your car, and bus or other local transportation passes.
After all is said and done, is your final number negative or positive? If it’s positive, then congrats! If it’s negative, then you really need to get some priorities in order. We suggest starting with that category of ‘eating out’. It’s a luxury and a privilege to live life that way.
How to Refine Your Food Budget
There’s not many factors we can edit when it comes to our finances. We can’t decide how much our rent costs each month, but we can adjust how much we spend on food. Assuming you’ve taken care of the low-hanging fruit already — meaning that you cut out unnecessary subscriptions and other expenses that you find aren’t worth spending on — then, let’s start with looking at your food spending on a daily basis.
Take the amount you spent on food in the past month and divide it by 30. This is how much you had spent on food each day on average. What you can do with this number is to approach each day as a challenge, aiming to get the amount lower and lower.
Think about what you can cut costs on, what you can substitute, and what you can simply stop doing. For many, that’s refraining from eating out from restaurants and fast food. We understand that’s a hard habit to break, especially when you feel like you have no time. Which is why we highly encourage you to give meal planning a try.
Eventually, you’ll find a comfortable spot that just works. For some, this is $4 a day. For others, $7 a day.
Maintaining a Food Budget Takes Time
They say all great things take time, and this is no exception. Be patient, stay determined, and don’t forget to reward yourself every now and then. The great part about when you follow a food budget is that you begin to free up more money. This money can go towards a special night out at your favorite restaurant once every couple weeks. And for the first time, you don’t have to feel guilty about spending money because you know you can afford it.
If you fall off track, know that it’s okay. As long as you’re persistent enough to keep trying then you will get your food spending under control.