How big is food’s slice of budget pie?
Written on March 16, 2009
NEW YORK — When Carla Chery sat down to plan her household budget, she simply calculated the average she typically spent to feed her family of four.
Chery, a stay-at-home mom in Manhattan, never considered what percentage of the overall budget that $500 a month took up, or whether there is a "correct" amount to spend on food.
If Chery searched for guidelines on how much she should spend, she would find no clear recommendation. For instance, while most budgeting books and websites say no more than 30 percent of spending should go toward rent or mortgage payments, suggestions for food spending fall in a wide range — from as low as 5 to as high as 15 percent.
The Bureau of Labor Statistics estimates about 12.5 percent of the average family’s spending goes toward food, which includes restaurants and takeout, while the Department of Agriculture puts the figure at 9.8 percent.
Groceries are "not a fixed expense like the mortgage and your utility bills, where you have to pay them and you can’t change it," said Michelle Jones, founder of consumer site BetterBudgeting.com.
Jones said she typically spent about 10 percent of her household budget to feed her family of six no fax needed payday loans. But because her husband is about to lose his job, she has drastically scaled back. "We’re just cleaning out the pantry," she said.
The USDA tracks actual spending and breaks it down into four categories: thrifty, low-cost, moderate and liberal. For a family of four such as the Cherys, with two children under age 5, that spending ranges from a "thrifty" $524 per month to a "liberal" $1,014.
Although Chery’s spending falls below even the "thrifty" amount, Chery does not clip coupons or travel from store to store to hunt for bargains. "Whatever is on sale, I’ll grab like two or three of them," she said. "Especially if it’s not perishable."
Gary Foreman, a former financial planner who operates the website The Dollar Stretcher, recommends using a price book to track the costs of regularly used items. This works best for comparing stores but can also work for shoppers who use only one: When something is advertised as on sale, you’ll know if it’s really a bargain.
Filed in: management.