3 Reasons Food Is Busting Your Budget

We LOVE our food. And by ‘We’, I mean ALL of us. Just look at our Instagram pages. For every one picture of our ‘#MCM’/’#WCW’ (or, if you’re single ‘le selfie’ <–kidding), there are several more pictures of what we had for breakfast/lunch/dinner – many with the hashtag: Foodporn.

(Side note: am I the only one that can’t make sense of #Foodporn? It even feels weird typing it)

Moving on…

Although too much of the wrong type gets us into trouble, food is not really bad…or is it? (cue the Dun Dun DUNNNNN). Clearly this is not a food blog, so you won’t hear me rant about my marvelous Kraft Shells and Cheese recipe but I am passionate about personal finance so I’m especially interested in how what we spend on food, affects our financial health.

Not Paying Attention To What You ACTUALLY Spend On Food

Food is one of those expenses that can easily fall through the cracks if not carefully monitored. I know this to be true, first hand. I am the budgeting nerd in my family. I’m the guy who takes pride in his excel spreadsheets with charts and tables. I thought I had it figured out and just knew that my wife and I could live on a monthly food budget of $250 a month. In the first month, we easily doubled that amount! The second month we spent around $380, which was slightly better but still far from what I thought we were spending. The fatal flaw in this budgeting process was staring me in the face the whole time. Unfortunately, it took me months to figure it out.

I never took the time to establish a baseline of what we were spending on food. This led to deciding on an arbitrary budget number that we didn’t stand a chance on meeting. If I would have taken a look at our bank statements and recorded our food expenses for a thirty day period, I could have had a more accurate look at the true cost of our food – and planned accordingly.

Action Plan: Review your most recent months bank statements and see what you’re actually spending on food. An even better (albeit more challenging) option is to start on the 1st of the next month and literally write down every cent that you spend on food for the next thirty days. I would make sure to include what you spent the money on. This is helpful on two fronts. By tracking exactly what you spend in a given month, you are able to create an accurate baseline of spending and can adjust your budget accordingly. In addition to that, writing what you spend the money on will force you to look at how you’re spending your money and hopefully eliminate some of the unnecessary expenses.

Going Grocery Shopping On An Empty Stomach

You’re hungry. The grocery store has shelves upon shelves of food. It seems like a perfect match, right? Maybe if you’re one of the companies selling products in the store it makes sense but if you’re a consumer, there couldn’t be a worse time to peruse the aisles of your local market. When you’re hungry, you’re also more likely to be irrational (my wife can attest to this fact). In your moment of hunger-induced irrationality, you will oftentimes go to extreme lengths to satisfy your hunger pangs, even (in some cases) to the detriment of your finances.

Without fail, every time I go grocery shopping while hungry, I end up with random unnecessary items in the basket that seem like a great idea at the time but often end up going bad or being thrown away because they were an impulse purchase. I haven’t actually done the math on how much I’ve wasted in a given month but I’m sure if I did, it would make me more than a little misty eyed.

Action Plan: Plan your grocery trips in advance, preferably in the middle of the week when most stores run special discounts. If you followed the advice in the first action plan item and documented your spending for a month, use that list and identify meals that you enjoy eating on a regular basis. Do a quick online search and find simple recipes of those meals that you can cook without having to buy a pantry full of ingredients. And the last, probably most important, action plan item to avoid impulse purchases from SWH (Shopping While Hungry), eat BEFORE you go grocery shopping…but I’m sure you’ve already gathered that by now.

Eating Out

Eating out, for most, is the primary way of being social. When everything is good, we celebrate…by eating. When life comes crashing down, we numb the pain…by eating (mostly bacon…bacon makes everything better). My group of friends and I, literally have a place that we eat when we’re celebrating good news and another where we eat when one of us is going through a tough time. It’s human nature to want to share life’s ups and downs with others, and that is often done over a table of food at your favorite restaurant.

Social aspect aside, eating out on a regular basis can quickly blow your budget. It can cause even greater harm if you are digging yourself out of debt. Just think about it, let’s say you spend $30 eating out for lunch and dinner four times a week. Spread over a year, you’ve spent over $6,000 in restaurants! ($30 x 4 times/wk x 52 weeks) No matter how much debt you have, that’s enough to at least make a dent.

Action Plan: There’s nothing wrong with going out to eat but if you’re going to be serious about your financial well-being, you should try to limit how often you do it. When you decide to eat out, plan ahead…and use cash. By doing this, you can set a pre-determined spending limit that will help thwart any overspending temptation – no matter how irresistible that dessert tray may look. If it’s the socializing that you long for, consider inviting friends over and cook or an even better idea, have a potluck. You’ll save a ton of money and still be able to share your wins and losses with those closest to you.

How are you able to keep your food budget in check? Join the conversation!