Four Steps for Setting up a Food Budget (+ apps to help)

Real food on a budget can be done! And I’m sharing all the tips and resources you need to make it happen, plus 100 recipes (complete with $15 or less shopping lists and pricing for every ingredient) in my newest cookbook, which comes out August 14th! Preorder your copy for the best price, and in the meantime here’s a little excerpt of what’s to come. :)

Real Food on a Budget

To eat real food on a budget it’s important to figure how much you can spend each week (or month) and to come up with a reliable way to track every single penny spent. This may sound basic, but it’s a critical step if you are going to be successful!

We’ve tried ourselves to go through periods of simply “not spending a lot of money” (without an official budget), and I’m here to tell you it does not work! If you don’t already know how much you’re currently spending on groceries, start there.

I actually shared all these tips on our local news last week, and here is the clip if you prefer to see it in video format!

Four Steps for Setting up a Food Budget

1. Pick a realistic budget amount.

What a food budget looks like can range wildly for different families depending on the number of people, cost of living, and other factors. During our 100 Days of Real Food on a Budget pledge back in 2010, we personally challenged ourselves to spend no more than $125/week on food for a family of four in Charlotte, North Carolina. I recently asked my Facebook followers how much goes into their regular expenses and heard everything from $100 to $300 a week (for a family of four), with the average coming in closer to the $150 to $250 range.
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If you have no idea where to start, you should add up how much you typically spend on food each week or month (grocery store, farmers’ market, any meals eaten out, and so on) by calculating an average based on credit card statements over the last six months. I personally think a weekly budget is easier to follow than a monthly budget because you can’t go too far over before you realize you’re in trouble.

2. Decide what will be covered by the budget.

This is important! Will your grocery budget just be for food items, or for household items, too? What about “extras” like alcohol, entertaining, and going out to eat? It’s best to make these decisions in advance so you can track your spending accordingly.
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The items our grocery budget pledge did not cover:

• Eating out – We had a separate $20/week ($5/person) budget set aside for this. We usually let it accumulate so we could have one nice dinner every month or so.
• Entertaining – We had a few instances of entertaining during our pledge, including hosting Christmas dinner, that we paid for out of a separate budget.
• Our garden harvest – We had already purchased seeds (which are cheap!) and starter plants for a fall garden and harvested some of our lettuce and greens for “free” during our pledge.
• Freezer stock – With the exception of meat–which didn’t seem fair to eat without it counting during our challenge–we could cook with anything else that was already in the freezer, such as breads, homemade soups, and so on.

3. Pick a method for tracking your expenses.

There are many high-tech ways to track food spending nowadays and also the obvious old-school methods—which work!—such as writing down all your receipt totals and adding them up at the end of the week (or month). Years ago my husband and I used to keep tiny printed charts in our wallets so we had no excuse for forgetting to record something.

There’s also the “cash envelope” method (thanks, Dave Ramsey!), in which you just dole out how much you’re allowed to spend in cash. We’ve tried this method as well and had one envelope for grocery spending, another for clothes, another for entertainment, and so on. The beauty of cash is that once it’s gone, it’s gone! If you aren’t going to use cash (it is hard to resist all those credit card points and miles), then I suggest making a commitment that if you do go over budget, you’ll deduct that amount from your new total the following week or month. And even if you do use cash, I still recommend keeping track of all your expenses, because it’s important to see where your money goes, which will help you make changes so you can save money in the long run.–

Here are some apps and websites to help with budget tracking:

• YNAB (You Need a Budget) – Free 34-day trial then $84/year. Bank syncing and goals, plus debt management software, all accessible in real-time from any device. This is what we have started using for our personal finances, and we find it to be helpful.
• EveryDollar (Dave Ramsey) – Free (with ads) or $99/year for bank syncing. Budget from your computer, iPhone, or Android device with this tracking tool.
• Out of Milk – Free. Android shopping list app for creating and sharing shopping lists with friends and family.
• Mint – Free (with ads). Create budgets and bring together everything from balances and bills, to your credit score, and more. We have personally tried this one as well and while it pulls everything into one place for you, we felt the goal-setting features were not robust enough for our needs.
• Flipp – Free. Digital weekly circulars from over 800 local retailers and coupons from the brands you love so you can find the best deals in your community every week. There’s a shopping list feature as well.

4. Work together.

If you’re part of a family, then all spenders should be responsible for helping to stay on the household budget. It’s important to share and discuss the running totals (as well as the goal!) with the other adults and older kids in your household. I have friends who have been known to sit their children down (as young as elementary school) and present a slide show of family expenditures and goals in an effort to get everyone on the same page! Accountability is key.

Any tips that have worked for your family that you’d like to add to this list? Please share in the comments!