Create a Budget

Learn how to set a realistic food budget that lasts all month.

How to Create a Food Budget

A food budget, sometimes called a food spending plan, is a way to guide your choices about what you buy to eat. It works as one part of your larger household budget, helping you align food spending with your overall financial goals.
 
Because food costs change from week to week, they are considered a flexible expense, unlike fixed bills such as rent or car payments. Creating a plan just for food helps you stay in control, make thoughtful purchases, and avoid feeling surprised or stretched at the end of the month.
 

Here are the steps you need to know:

1. Track Your Food Spending for One Month

A good food spending plan starts with knowing your current habits. To get a sense of your typical monthly food costs, spend one month recording everything you spend on food.

Use the tracking tools that work best for you: Save receipts in an envelope, record in a notebook or electronic spreadsheet, review your checkbook or credit card statement, and/or use an online financial management app or tool.

What to Record

Include these Food Purchases

What Not to Include*

Snacks

Diapers

School meals

Clothing

Food at home / groceries

Tobacco

Food for special occasions

Pet supplies

Baby formula and baby food

Household supplies

Vending machine purchases

Personal care products

Beverages (including alcohol)

Convenience or corner store purchases

Dining out (restaurants, bars, coffee shops, takeout)

*Even if you buy them at a grocery store, track these items separately in your overall household budget as part of your personal spending.

2. Do an End-of-Month Review

Once the month is over:

  1. Add up your total food spending. You can also review each category of food spending (such as groceries, dining out, etc.).

  2. Look for “budget busters”—places where you spent more than you expected.

  3. Compare your spending to the amount of money you realistically have available for food.

3. Create Your Food Spending Plan

Now that you know your spending patterns, decide on a realistic monthly food budget.

You can choose to plan one total monthly food amount, or specific amounts for categories (such as groceries vs. dining out).

If you’re unsure what’s typical for a household like yours, tools such as the Economic Policy Institute Family Budget Calculator or the Living Wage Calculator can provide helpful estimates.

4. Use a Calendar to Stay on Track

A simple paper or digital calendar can help you plan your food dollars throughout the month.

Track things like paydays, shopping days, credit card due dates, dates when food assistance arrives, dates when certain benefits expire, special events (birthdays, food holidays, potlucks), and store specials, coupons, and sales.

Mapping these dates helps you stretch your food budget and avoid running short.

5. Expand Your Food Spending Power

Sometimes you need more than planning—you need more resources. You can increase your food spending power in these ways:

Increase Food-Based Income

  1. Look at your larger household budget and identify "budget busters" for non-food items. Shifting even a small amount from non‑food categories can make your food dollars go much further.

  2. Explore food assistance programs and other resources (see Stretch Your Benefits section).

Decrease Food Spending

  1. Learn about low-cost meal planning, shopping, and cooking strategies by visiting the Plan Meals, Shop Smart, and Budget Friendly Recipes sections.

Use both approaches to make the biggest impact!

To learn more about money management, including how to create a larger household budget, visit MSU Extension's MI Money Health website.

 

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