Housing and transportation may be the top line items in a typical family budget, but the cost of meals and groceries can also be significant. In fact, food prices increased 8.5% between March 2022 and March 2023, according to the Bureau of Labor Statistics’ most recent Consumer Price index report. While all consumers are impacted by price hikes, families in particular may be feeling the pinch at checkout.
If you have a larger family, creating a budget can help keep you from overspending at the grocery store. But how much should you allocate for food each month? Keep reading to learn more about creating a grocery budget for a family of five.
Average Grocery Budget for American Family of Five
When coming up with your grocery budget, it helps to first understand how much you can expect to spend on food. The average household spends roughly $438 per month or $5,259 per year, on at-home food, according to the most recent statistics available from the Bureau of Labor Statistics.
But how much should you budget for groceries if you have a family of five? A good starting point is the USDA’s food plans, which include four spending levels: thrifty, low-cost, moderate-cost, and liberal. According to the latest food plan available, here’s what a family of five should plan to spend on groceries:
|Spending level||Cost per month||Cost per year|
Source: USDA food plans
How Much to Budget for Groceries Per Person
How much a family of five end up budgeting for groceries depends on a number of factors, like how much the store charges, the type and amount of food purchased, and whether they use a grocery delivery service.
Want to figure out how much to allocate in your food budget for each family member? You can refer to the USDA food plans above for a general idea of monthly and yearly costs, and divide the amounts by the number of members of your family. You can also look at the last three to six months of your family’s grocery bills and calculate a monthly average. Divide that amount by the number of members of your family.
Once you see how much you’re actually spending per person each month, you can adjust your budget accordingly.
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How to Prioritize Your Grocery Spending
When you’re feeding a large family, you want to make the most of your grocery list. The best way to prioritize your food spending is to create a monthly budget and stick to it. Having a plan in place makes it easier to curb grocery store splurges.
If you’re new to budgeting, you may want to use the 50/30/20 rule. This framework calls for earmarking 50% of your monthly after-tax income on things you need (such as food, housing, and transportation), 30% on things you want (such as a new outfit or tickets to a concert), and 20% on savings and debt repayment.
Another helpful tool to consider is a budget planner app, which allows you to easily set spending and savings goals and monitor your progress.
How to Stay Within Your Grocery Budget
Staying on top of a grocery budget can be challenging, especially when you have a larger family. The following tips can help:
Don’t Shop When You’re Hungry
When your stomach is grumbling in the middle of the grocery store, chances are you’re more likely to give in to cravings. This may leave you with a cart full of impulse buys, which could add to your overall cost.
Make a Shopping List
Writing down everything you need before you start shopping is a good way to ensure you only pick up the items you need and are in your budget.
Embrace Meal Planning
Create a weekly menu ahead of time so that when you hit the store, you know exactly what ingredients to buy. If your finances allow, consider reserving a small chunk of the budget so that each family member can pick out a treat for that week.
Recommended: How to Create a Budget in 6 Steps
How to Budget for Restaurants and Dining Out
While eating at home can be more cost effective than dining out, many memories are made at restaurants. If your family is planning to have meals out, how much should you expect to spend?
The average American household spends $3,030 on dining out, according to the most recent data available from the Bureau of Labor Statistics. However, larger families should expect to spend more.
Tips for Reducing Your Grocery Budget
Looking to lower your grocery bill? Consider these simple strategies:
• Buy in bulk
• Shop at discount retailers
• Choose generic brands
• Meal prep for the week
• Shop sales
• Join rewards programs
• Use coupons
• Use a credit card that earns cash back rewards
Tips for Getting Help If You Can’t Afford to Buy Groceries
Families that are struggling to pay for food have several government resources they can turn to for help. Food stamps (also referred to as SNAP benefits), the WIC program, school meal programs, and food assistance programs are all worth looking into. Depending on the program, you may need to meet certain criteria, such as an income limit, in order to be eligible.
Examples of the Cost of Common Groceries
As anyone who has stepped foot in a grocery store lately can attest, food costs are going up. But just how much depends largely on where you live. Still, it can be helpful to understand national prices so you can prepare your food budget accordingly. Below is the national average of six common items, according to an NBC News analysis of NielsenIQ data.
Average Cost of Groceries in 2022
|Orange juice (60 oz.)||$4.01|
|Chicken eggs (dozen)||$4.05|
|Fresh ground beef/lb||$5.96|
|Bacon (16 oz.)||$5.39|
|Loaf of bread||$3.27|
How to Stretch Your Grocery Budget
Stretching a grocery budget requires careful planning. A few places to start: planning meals for the week, taking advantage of weekly ads and local deals, and shopping at more affordable grocery stores. Savvy shoppers can even design meals around the discounts and coupons being offered at the more affordable grocery stores.
Another strategy is to buy in bulk where it makes sense. Purchasing larger amounts of staples like rice, flour, and paper products can provide a better bang for your grocery buck.
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Food is a major expense for most Americans, but perhaps more so for larger families. Creating a budget can help keep costs in check. On average, a family of five spends anywhere from $922 to $1,488 a month on groceries, according to USDA monthly food plans. If you’re looking to curb your spending, consider meal planning, buying in bulk, and shopping at more affordable grocery stores. If you need help paying for groceries, government programs like SNAP benefits and WIC can provide support.
To make budgeting for groceries and other expenses easier, consider using a money tracker app. The SoFi Insights app connects all of your accounts in one convenient dashboard. From there, you can see all of your balances, spending breakdowns, and credit score monitoring, plus you can get other valuable financial insights.
What is a realistic grocery budget for a family of five?
Depending on how much you have to spend on food, a realistic grocery budget for a family of five may range anywhere from $922 to $1,488 a month on groceries, according to USDA monthly food plans. To determine how much your family should spend each month, consider adding up the last three to six months of grocery bills and finding the monthly average.
How can a family of five save money on groceries?
There are steps a family of five can take to save on groceries, including meal planning, taking advantage of coupons and weekly deals, and making a shopping list ahead of time. Those strategies allow families to spend more mindfully and, ideally, lower their grocery bill.
What is a reasonable grocery budget?
The average American household spends $5,259 per year on groceries, according to the most recent statistics available from the Bureau of Labor Statistics.
Photo credit: iStock/seb_ra
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