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Housing and transportation may be the top line items in a typical family budget, but the cost of meals and groceries can also be significant. In fact, food prices increased 8.5% between March 2022 and March 2023, according to the Bureau of Labor Statistics’ most recent Consumer Price index report. While all consumers are impacted by price hikes, families in particular may be feeling the pinch at checkout.

If you have a larger family, creating a budget can help keep you from overspending at the grocery store. But how much should you allocate for food each month? Keep reading to learn more about creating a grocery budget for a family of five.

Average Grocery Budget for American Family of Five

When coming up with your grocery budget, it helps to first understand how much you can expect to spend on food. The average household spends roughly $438 per month or $5,259 per year, on at-home food, according to the most recent statistics available from the Bureau of Labor Statistics.

But how much should you budget for groceries if you have a family of five? A good starting point is the USDA’s food plans, which include four spending levels: thrifty, low-cost, moderate-cost, and liberal. According to the latest food plan available, here’s what a family of five should plan to spend on groceries:

How Much to Budget for Groceries Per Person

How much a family of five end up budgeting for groceries depends on a number of factors, like how much the store charges, the type and amount of food purchased, and whether they use a grocery delivery service.

Want to figure out how much to allocate in your food budget for each family member? You can refer to the USDA food plans above for a general idea of monthly and yearly costs, and divide the amounts by the number of members of your family. You can also look at the last three to six months of your family’s grocery bills and calculate a monthly average. Divide that amount by the number of members of your family.

Once you see how much you’re actually spending per person each month, you can adjust your budget accordingly.

How to Prioritize Your Grocery Spending

When you’re feeding a large family, you want to make the most of your grocery list. The best way to prioritize your food spending is to create a monthly budget and stick to it. Having a plan in place makes it easier to curb grocery store splurges.

If you’re new to budgeting, you may want to use the 50/30/20 rule. This framework calls for earmarking 50% of your monthly after-tax income on things you need (such as food, housing, and transportation), 30% on things you want (such as a new outfit or tickets to a concert), and 20% on savings and debt repayment.

Another helpful tool to consider is a budget planner app, which allows you to easily set spending and savings goals and monitor your progress.

How to Stay Within Your Grocery Budget

Staying on top of a grocery budget can be challenging, especially when you have a larger family. The following tips can help:

Don’t Shop When You’re Hungry

When your stomach is grumbling in the middle of the grocery store, chances are you’re more likely to give in to cravings. This may leave you with a cart full of impulse buys, which could add to your overall cost.

Make a Shopping List

Writing down everything you need before you start shopping is a good way to ensure you only pick up the items you need and are in your budget.

Embrace Meal Planning

Create a weekly menu ahead of time so that when you hit the store, you know exactly what ingredients to buy. If your finances allow, consider reserving a small chunk of the budget so that each family member can pick out a treat for that week.

Recommended: How to Create a Budget in 6 Steps

How to Budget for Restaurants and Dining Out

While eating at home can be more cost effective than dining out, many memories are made at restaurants. If your family is planning to have meals out, how much should you expect to spend?

The average American household spends $3,030 on dining out, according to the most recent data available from the Bureau of Labor Statistics. However, larger families should expect to spend more.

Tips for Reducing Your Grocery Budget

Looking to lower your grocery bill? Consider these simple strategies:

•   Buy in bulk

•   Shop at discount retailers

•   Choose generic brands

•   Meal prep for the week

•   Shop sales

•   Join rewards programs

•   Use coupons

•   Use a credit card that earns cash back rewards

Tips for Getting Help If You Can’t Afford to Buy Groceries

Families that are struggling to pay for food have several government resources they can turn to for help. Food stamps (also referred to as SNAP benefits), the WIC program, school meal programs, and food assistance programs are all worth looking into. Depending on the program, you may need to meet certain criteria, such as an income limit, in order to be eligible.

Examples of the Cost of Common Groceries

As anyone who has stepped foot in a grocery store lately can attest, food costs are going up. But just how much depends largely on where you live. Still, it can be helpful to understand national prices so you can prepare your food budget accordingly. Below is the national average of six common items, according to an NBC News analysis of NielsenIQ data.

How to Stretch Your Grocery Budget

Stretching a grocery budget requires careful planning. A few places to start: planning meals for the week, taking advantage of weekly ads and local deals, and shopping at more affordable grocery stores. Savvy shoppers can even design meals around the discounts and coupons being offered at the more affordable grocery stores.

Another strategy is to buy in bulk where it makes sense. Purchasing larger amounts of staples like rice, flour, and paper products can provide a better bang for your grocery buck.

Recommended: Free Credit Score Monitoring

The Takeaway

Food is a major expense for most Americans, but perhaps more so for larger families. Creating a budget can help keep costs in check. On average, a family of five spends anywhere from $922 to $1,488 a month on groceries, according to USDA monthly food plans. If you’re looking to curb your spending, consider meal planning, buying in bulk, and shopping at more affordable grocery stores. If you need help paying for groceries, government programs like SNAP benefits and WIC can provide support.

To make budgeting for groceries and other expenses easier, consider using a money tracker app. The SoFi app connects all of your accounts in one convenient dashboard. From there, you can see all of your balances, spending breakdowns, and credit score monitoring, plus you can get other valuable financial insights.

FAQ

What is a realistic grocery budget for a family of five?

Depending on how much you have to spend on food, a realistic grocery budget for a family of five may range anywhere from $922 to $1,488 a month on groceries, according to USDA monthly food plans. To determine how much your family should spend each month, consider adding up the last three to six months of grocery bills and finding the monthly average.

How can a family of five save money on groceries?

There are steps a family of five can take to save on groceries, including meal planning, taking advantage of coupons and weekly deals, and making a shopping list ahead of time. Those strategies allow families to spend more mindfully and, ideally, lower their grocery bill.

What is a reasonable grocery budget?

The average American household spends $5,259 per year on groceries, according to the most recent statistics available from the Bureau of Labor Statistics.

Photo credit: iStock/seb_ra

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*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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If you’re feeling financially disorganized, making a few key moves can help you restore order and take charge of your money. You’ll learn to live within a budget, pay down debt, and start saving so you can work toward a successful financial future.

Here’s what you need to do to clean up your finances.

Ways to Clean Up Your Finances

1. Look at the Big Picture

The first step is to look at your entire financial situation. Review your bank statements, credit card statements, bills, and paychecks. It might feel a little overwhelming at first, but seeing your income and debt all at once, and comparing the two, can help you understand exactly what you own and what you owe.

Make the process easier with a money management tool that can help you track your accounts in one place.

2. Set a Practical Budget

Setting a budget can be a great way to organize your spending and saving. One way to do it is by using the 50/30/20 method. This process can help simplify your money by dividing it into three categories.

To start, 50% of your income goes to necessities, such as housing, utilities, groceries, and other essential bills. Next, 30% is for discretionary spending, like entertainment or eating out. The remaining 20% is for your financial goals, such as savings and retirement.

As a final step in the budgeting process, take a look at your savings account. You may want to consider opening a high-yield online bank account where your money could earn more for you.

3. Make Payments On-Time

One surefire way to make sure your bills are paid by the due date is to automate your finances by setting up autopay. Since payment history affects approximately 35% of your FICO® score, consistent on-time payments could potentially benefit your score.

Plus, many financial institutions may offer a discount for setting up automatic payments. You can also go paperless and get notifications delivered straight to your email inbox.

4. Cancel Unused Subscriptions

As you’re evaluating your spending habits and budget, be sure to look for subscription services you can cancel.

Whether it’s an unused Netflix subscription or an underused gym membership, canceling what you don’t use could save you a substantial sum over the course of a year.

5. Make a Plan for Your Debt

If you’re working on paying off multiple loans, you could explore the idea of consolidating your debt with a personal loan. If you have debt built up across multiple credit cards, for example, the different interest rates and due dates can lead to confusion and missed payments.

One possibility to help simplify things is a debt consolidation loan. You could choose a new repayment term, possibly with a lower interest rate, if you qualify.

If you have private student loans to repay, you might also want to consider refinancing your student loans. You may be able to get a lower interest rate that could help you save money. Evaluate the options to see what might work for you and what you can qualify for.

6. Review Your Current Investments

If you’ve had multiple jobs, you may want to consolidate your investment accounts, too. Having several 401(k) accounts from past jobs could be tough to keep track of and might not help you make the most of your money in the long run.

Rolling over your old 401(k) accounts and combining them into one IRA account, for example, could be one option to consider.

You can also check with your current employer to see if you can roll over your previous accounts to your new plan. Be sure to compare the different investment choices of each account to make an informed decision.

7. Commit to Regular Maintenance

Streamlining your finances in the present is just the first step. From now on, commit to doing a regular financial checkup. Review your finances monthly, and adjust your budget and financial strategies as needed.

8. Stay on Top of Your Credit Report

While you’re at it, check your credit report and review it to make sure it’s correct. If you spot any errors, notify the credit bureaus. You can get a free copy of your report from AnnualCreditReport.com.

In addition, you may be able to check your credit score for free through your credit card or bank. You can see how your score changes over time and what may be impacting it the most. Then you’ll know what you need to work on to strengthen your score.

9. Review Insurance Policies

If you have life insurance policies or other benefits with beneficiaries, review those designations at least once a year. With big life changes, you’ll want to make sure your beneficiaries are up to date.

If you get married or remarried and change your name (or your spouse’s name changes), you’ll need to add that information to the policies as well.

10. Update Your Tax Withholding

Take a look at your most recent tax return. Did you end up with a big refund? Or maybe you owed way more than you planned for. Your withholding may be too much or not enough.

Discuss your withholding information with a tax professional to make sure you’re having the correct amount taken out of your paychecks for taxes.

The goal is to free up more of your money month to month as you earn it so you can put it toward savings or paying off debt.

11. Maximize Account Benefits

Finally, as part of your financial cleanup, you should review the benefits and features of your bank accounts and see if a new account might benefit you more.

If you’re thinking about a high-yield savings account, for instance, check out SoFi Checking and Savings. You’ll earn a competitive APY, pay no account fees, and there’s no minimum balance.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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