4 Steps to Set a Successful Grocery Budget

Published on October 1, 2020 by Lauren

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  • So… you want to start a grocery budget but have no idea where to even start.  I was there just 6 short years ago when we were in a large amount of debt, so I completely understand how you are feeling.  You know you need to – and want to –  use your available money to pay down your debt, so you try to trim your other expenses. But the truth is, you don’t want to live on rice and pasta for months. The good news? You can set up a successful grocery budget and in just four easy steps too!


    set up a successful grocery budget


    Set Up a Successful Grocery Budget in Four Easy Steps!

    Okay, so if I’m being totally honest, maybe it’s not totally easy. There will be a little bit of time and a lot of messing up when trying to get this process right. It took me about 2 months to find the right amount of money to allocate toward grocery shopping every week. Once I got the sweet spot, it became easy to stick to that amount week after week because it was the correct amount.

    1.) Determine Your Current Average Grocery Bill

    The first step in budgeting is to know where you are. Take a look at what you have been spending over the last 3 months, and then average that out so you can see what you have been spending.  If you aren’t math savvy, you get an average by adding up the totals and then dividing it by the numbers you added. So for example, if you shop every other week, for over 3 months that’s 6 receipts. You’d total those up and divide that number by 6.

    This can be a WOW moment for you. I know it was for us. We realized we were spending around $150 per week AND eating out twice a week.  That means that we were spending at least $800 per month on food (we were only a family of 3 when we first started this.)

    2.) Set Aside Your Grocery Allowance

    Once you have your average amount, withdraw that amount in cash next week.  Why do I recommend cash?  Because it is the easiest way to commit to only spending that amount.  If you haven’t tried my cash envelope system for budgeting, this has been a game-changer for me and my family.

    Sticking to your allotment may be challenging, but remember this is your average, so you have spent this on groceries before. It may mean that you have to start meal planning and using coupons, but the goal is to spend NO MORE than this amount. This will help you practice discipline.  Do this for a month.

    3.) Create a 1/3, 1/3, 1/3 Budget

    After that month is over and you have successfully stuck to your weekly budget, the next step is to create a 1/3, 1/3, 1/3 budget system.  This means that 1/3 of the budget is for fresh produce, meats, and dairy items. One-third of the budget is for other items that you need for the week like cereal, pasta, peanut butter, etc.  The final 1/3 of the budget is to be allocated towards loss leaders and stock-up sales to help you gradually build a small stockpile.

    Once you do this for 6 weeks (the end of 1 sale cycle), you should have a pretty decent stockpile to help cut that grocery budget down significantly every week.

    4.) Reduce Your Grocery Budget by at least 25% Each Week

    Now that you have a small stockpile of foods that you and your family typically eat, you don’t have to rely on buying everything out of pocket each week.  This allows you to concentrate on the healthier foods and items that are on sale that week.  Shopping in this way helps your budget in 2 ways: 1) you don’t have to rely on the store prices every week, and 2) you can meal-plan around the items in your stockpile instead of randomly choosing the meals for that week.

    If you still need help, you can always download my free meal planning workbook.

    Other Tips to Help You Set Up a Successful Grocery Budget

    The whole process outlined above should take 3 months from start to finish.  Once you get to the last week you should have a significantly reduced grocery budget AND a small stockpile of food to choose from every week.  I hope this helps you!  We followed these steps 6 years ago and it helped me get in control of my grocery shopping!  And I can promise you, we still eat a variety of foods AND meals we enjoy.

    Over the years I have noticed some other tips around grocery shopping that might be helpful for you as well:

    Save money in the store by paying attention to product placement.

    How a grocery store flyer can help you save thousands per year.

    How to save money by meal planning.

    Money-saving recipe ideas to help with meal planning.




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