Your 4-Week Plan to Better Food Budgeting in 2021
Experts explain how getting a handle on your grocery bill this month can lead to savings for the rest of the year.
The start of a new year can be a great time to resolve to make a fresh start on all those goals we know you have. And in 2021, it’s more important than ever to make some resolutions around financial health. One of the best ways to get your finances "in shape" is to make and stick to a food budget.
"After housing, food is one of the biggest expenses that people typically have," says frugal lifestyle blogger Lydia Beiler. "Having a food budget and managing your money there can be an easy way to help yourself out financially. It’s so easy to spend way more than you think you are if you don’t have a budget."
Just how much in savings are we talking about? "It’s usually hundreds of dollars that you can quickly and easily save," says personal finance expert Ashley Patrick, founder of Budgets Made Easy. And who doesn't want that?
Even with potentially big savings, it’s easy to get overwhelmed before you start making a budget, or discouraged if you stray. If that happens, try to shift your mindset.
"The purpose of a budget is not just to have a budget. The purpose of a budget is to give you space to save," says financial educator Tiffany Aliche, founder of The Budgetnista. "A budget is your first step on the stairway toward financial success. People are afraid to make budgets because they think they’re too restrictive. It’s only restrictive if you think about it that way.”
Patrick recommends having a clear understanding of why you’re doing it, and then breaking the larger goal into smaller steps. "Create a smart goal, something that’s specific, measurable, attainable, realistic and timely," such as getting out of debt in a year, she says. "Then create smaller micro goals to get to your bigger goal, so that you know exactly where you’re going, and what you need to get there. Focus on one small thing at a time that moves you in the direction of your bigger goal."
Here’s a four-week plan to help you figure out a budget, trim what you’re spending so you can stay on target, then shop for, prep and cook meals your family will love that fit within your limits. We’ve also included some recipes to help you get started.
Week 1: Track Your Current Spending
The first step is figuring out what your budget should be. To do this, Patrick recommends looking back to determine how much you’ve been spending. "Track your spending for the past month. Go through your bank statements and credit card statements and see where your money’s actually been going," she says. "This can be really eye-opening, when you actually see the number. We have a tendency to underestimate how much we’re spending."
Write everything down or create a spreadsheet, breaking everything into categories such as groceries, takeout, and specialty items; for example, if you go out for coffee every day, that can go into takeout, or it can be its own category. Make your list specific enough that you can analyze it, but not so complicated that it’s too hard to manage.
Breaking out grocery spending versus takeout is really important, notes meal-planning expert Jess Dang, founder of Cook Smarts. "There are very different intentions behind these two budgets," she says. "Your grocery budget more or less reflects essential needs, whereas an eating out budget is more discretionary. Separating the two really gives you insight into where your current spending is and how you can adjust."
Though you may be surprised by what you’re spending and where, try to go through the process without judgment; tracking your spending isn’t meant to shame you, just to help you get a clear picture of where your money is going so you can make a plan.
If tracking the past month’s expenses feels too daunting, Patrick says you can also start today and track your spending going forward for a few days, a week, or a month.
Though admittedly this is not the fun part, once you’re on the path, relief is in sight. "It can feel complicated and tedious," Beiler says. "But once you start budgeting, and you get into a rhythm of doing it, there’s so much freedom in knowing exactly where your money is going, and in knowing that you’re managing it well. It actually can reduce your stress level."
Week: 2: Create a (Starting) Budget
Once you’ve tracked your expenses, you can get a sense for how much you need in your grocery budget. Use that to come up with an estimate, Aliche says. "Set that amount, put it on a debit card or get it in cash, and see how close you can get to it," she says. 'This is a beginning budget, it’s OK if it isn’t exactly right. See how close or how far you are after the first month, and then make adjustments.”
One thing to consider in your grocery budget is non-grocery items, such as paper goods or personal care items like shampoo. You can either plan to build them into your grocery budget since you buy them at the same store, or pay for those items separately.
Finding things you can trim without feeling deprived is key, experts say. For example, if you’re spending a lot on snack foods, rather than vowing to cut them out altogether, try reducing the amount or variety that you buy each week. The same is true for takeout. "One of the biggest mistakes people make is not planning for the fun food," Aliche says. "Leave a little space for eating out and other things you enjoy."
Another thing to factor in is special occasions, such as birthdays and holidays. If you tend to go out for a special meal, or cook something more expensive than usual, you may want to add a bit extra to the discretionary part of your budget for those months that you don’t have in other times.
To keep track of how it’s going, Patrick recommends checking in with your spending either every week or every other week, but not longer than that. "Don’t wait until the end of the month, because then it’s too late to correct any mistakes," she says.
Remember that it is likely to take a few tries to get it right, so be patient. "Be gracious with yourself. There are going to be weeks where you mess up and overspend, especially as you’re learning to budget," Beiler says. "It takes some trial and error to figure out what works. People often give up because they didn’t do very well one week. But instead, realize that you can learn from that. You can figure out where you went wrong and next week you can try to improve on that.”
Week 3: Shop Smart and Find the Savings
There are some very simple, straightforward ways to save money on groceries, experts say. A big one is meal planning. "Meal planning gives intention and purpose to everything you're putting into your physical or virtual grocery cart," Dang says. "There is a plan for how those things will get used during the week and leads to so much less food waste." A staggering 40 percent of food goes to waste in the U.S., so having a way to reduce that alone can make a big impact on your spending.
Meal planning also helps with another way experts recommend reining in grocery spending: having a shopping list and sticking to it. Having your meals mapped out makes creating a grocery list much easier, Dang notes, adding that you also get the satisfaction of starting the week with a full fridge and ending it with an empty one, knowing you used everything you bought.
How you grocery shop also can make a difference. Along with taking a thoughtfully prepared list with you and sticking to it, Patrick recommends using a calculator when you shop — an easy thing to do now that there’s one on your phone. It’s a good habit to add up what you’re spending as you go, both as a check against impulse purchases, and to keep you on budget.
Shopping for groceries online can make this process easier, since you can see the amount adding up for you, Patrick says. Plus, instead of walking the aisles, where you may be tempted by impulse items, you can search only for things that are on your list. If your grocery store has a significant delivery fee, order online and then pick up your groceries, Aliche suggests.
When shopping, store brands are often less expensive, but not always. "It can pay to look at the unit price, the price per ounce," Beiler advises. "Sometimes the name brand is less expensive when it’s on sale." The same is true for buying in bulk; instead of assuming it always costs less, do the math of price per ounce to make sure, especially when things are on sale, she adds.
Another way to save that adds up is making your own "convenience" items, Beiler notes. Things like baking mix and salad dressing "take just minutes to mix up, and homemade is cheaper and healthier," she says, adding that you can also save by shredding cabbage or cheese yourself. On the flipside, if keeping a convenience item such as pre-chopped onions will get you to cook at home more often, spending a little more there can save you money in the long run.
Week 4: Plan and Cook Strategically
Map out a time each week when you’re going to meal plan and make your grocery list, and be sure to factor in leftovers and takeout meals, Patrick advises. Be sure your plan is realistic for the time you have to cook. "You don’t have to cook every single day" to stay on your budget, Patrick notes. "Include some slow-cooker meals, prep one day for a few days of meals. For us, Friday night is pizza night. You don’t have to feel guilty about having takeout sometimes; you build in those rewards for yourself. We all need some rewards."
Remember that small things add up. "The two biggest categories of food waste we see are herbs and condiments, which includes things like half a can of coconut milk, adobo sauce from a can of chipotle chilis, and tomato paste," Dang says. Store fresh herbs carefully, and if you’re buying them for a recipe, include another recipe in your meal plan for the week that will use them up. As for condiments, freeze leftovers in ice-cube trays, and then transfer to freezer bags. Mark the bags with the item and date, and be sure to check your inventory when making your grocery list each week.
Before beginning your meal planning, look through your freezer, pantry and fridge and make a list of items you already have, then plan meals around those items, Beiler says. This can save on your grocery bill and help eliminate clutter in your kitchen, plus it streamlines your shopping time.
Having some flexibility within your meal plan can help, too. "Let's say chicken thighs are on sale but your meal plan calls for pork chops. It's pretty easy to swap chicken thighs for pork chops, and you've saved some money in doing so,” Dang says.
Batch cooking can be a good way to save money and time, but it isn’t for everyone, and that’s okay. "Only do it if you are someone who enjoys having freezer meals and you have a system for knowing what's in your freezer," Dang says. "Otherwise, you're just delaying food waste and wasting money in the long run. However, if you do like having freezer meals, any time you're cooking something that scales easily, like a stew or a casserole, double it, portion it out and freeze it." You can also batch cook elements of meals; for example, if you see ground beef or chicken thighs on sale, buy extra, cook it and freeze it in portions, which can save you a step on busy nights.