Monday, May 11, 2009

Setting a Grocery Budget

By Alex Pastlin

Savvy customers know that shopping from a grocery list can save time and money. However, setting a budget at the store can often be confusing. How do you create a budget? How do you know how much you can spend?

To begin with, it's a good idea to look at your grocery budget the same way that you look at your rent and car insurance-as a bill. This makes sense, since we need food and it is an important expense. When doing your monthly budget, figure in your groceries the same way that you do your other bills. Don't shop under the old "I'll spend whatever I have left over on food." Sometimes, that leftover money gets eaten up in day-to-day expenses and you might not have enough left over to shop with.

What's a good amount to budget for groceries? According to a local Family Support Office, a family of 3 with no income would receive $389 per month in Food Stamps. This is just estimation, of course, and some families would need more. Some might get by with less. You must think about the size of your family, as well as your overall income.

Try looking at your grocery list in comparison to your budget. What items do you absolutely need? Make a list of those items that you generally buy on every trip. For your family, this might be milk and eggs. Figure in the cost of these items into your budget first, since you know you will be purchasing them.

Take a look at your list and try to figure out if there are items that you can buy less of. Are there items that you can purchase at another store, such as a discount store, where they might be cheaper? Is it cheaper to shop at your local farmer's market for produce? You don't always have to shop at the same store for every item on your list.

After you have set your monthly budget, if you determine that it is too high, try to cut it back by $50. If this seems to work and you notice a huge difference, try cutting it back again by 5% the next month.

If you try cutting back on your grocery bill and find that you can't live without all the items on your list, then look at other amounts that you spend and try cutting back there. Perhaps you stay in with popcorn and a rented movie one weekend, or you start taking your lunch to work several days per week. See if there is another area in your life that you can re-budget, without depriving yourself of the groceries you need.

In general, it is always cheaper to buy items that can be used more than once. Try buying for multiple meals instead of for one meal. A box of pasta can last through two or three meals, as can a bag of potatoes. Buying frozen dinners, while more convenient when it comes to time, is going to cost more money in the long run.

A really good tip is to try to work with the cash system. When you get paid, whether it's monthly or bi-weekly, take your grocery money out of your bank and put it in an envelope and shop from that. It's an excellent way to keep you from overspending.

Remember that your grocery budget is just as important of a bill as any of your other expenses. Don't neglect your health and vitality by assuming that you can eat for less, when realistically you might not be able to. When you plan ahead properly, you can be assured that grocery shopping on a budget doesn't have to be that difficult.

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