How To Improve Your Food Finance

Take a deep dive into your spending on food to improve your financial and nutritional health

how to improve food spending
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I developed my first budget when I was 24. It had six categories: cell phone, food, travel, downtown fun, miscellaneous fun, and clothing.

I had a real emphasis on “fun”, but I suppose that’s what being 24 is all about. My budget was simple, yet effective.

I set a maximum dollar amount for each category, some more predictable than others, and tracked the money I spent.

I tracked everything with paper and pen, writing down the items purchased in each category and adding it up at the end of the month.

My goal was to stretch my meager college job paychecks for an entire month. My first budget went about as well as you’d expect.

Sometimes I spent a little more than I intended to and I had to dip into my savings account. Over time, I learned a lot about money management and where I frequently overspent.

I learned that budget categories and spending limits were only effective when combined with legitimate savings goals. Otherwise, nothing prevented me from saving the money and spending it on the first item or experience that I deemed worthy.

spending limits and budget categories
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To be fair, I wasn’t blowing money left and right. Someone would invite me to a concert or on a road trip and I would use my savings to say yes. And I still think those were good financial decisions.

I’m glad I’ve spent on quality and memorable experiences (and continue to do so now).

It turns out that it was the frivolous, little purchases that set me back. That’s where food budget challenges have come in handy for me.

I am the type of person who does really well with rules. I also enjoy learning more about myself by breaking outside of my comfort zone.

Spending challenges not only helped me build up my saving account but also helped me grow as a person.

Spending challenges often led me to fewer convenience foods and more creative manipulation of ingredients. I’ve learned to extend the longevity of my ingredients, use those I already have in my fridge, and try things I didn’t think I’d enjoy (looking at you, kale).

These challenges also helped me transition from a 24-year-old with six meager budget categories to an adult woman who understands her food finances forwards and backward.

The importance of organized food finances completely eluded me before I got a little nerdy about my money. Like many young Americans, I made the assumption that eating cheap takeout was less expensive than cooking my own healthy food.

Though misguided, I thought buying healthy food would mean buying significantly more expensive food. But through meal planning and conscious spending, I can actually eat balanced, healthy, delicious food without breaking the bank.

I also feel like the quality of my ingredients has improved, allowing for more frequent consumption of fresh, wholesome ingredients.

In fact, my health has improved tremendously as a result of my wise spending on food. For me, it seems as though one, naturally leads to the other.

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How To Improve Your Food Finance
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There are a baker’s dozen ways to engage in wise food finance practices that will benefit you and your family. You may be thinking about taking more control of your food finances.

Or perhaps you have already taken some steps toward improving your financial (and nutritional) health through reducing unnecessary food spending.

Here are some more ideas on how to get the ball rolling:

Get acquainted with your food finances

Luckily, most people utilize online banking, which stores all your financial information.

It’s just sitting there waiting for you to look at. Pull up your bank statements from the last three months and highlight or write down all your food spending. It’s a tedious, yet incredibly useful practice.

Analyze your food spending

How does your actual spending compare to what you thought you were spending?

What purchases are outliers?

What did you buy that you now deem as “necessary”? For instance, you may realize that you typically spend $100 per month on groceries while you spend $300 per month at restaurants.

Would you feel comfortable doing that every month? Or would you prefer to spend $150 on groceries and $150 at restaurants in an effort to cut back $100 per month?

Think about what you could cut out of your monthly food budget without sacrificing your preferences and conveniences like going out to eat when you want to.

Try a spending challenge to get your mind in the right place for more conscious spending

Prepare yourself and your family to get creative in the kitchen… and enjoy it too!

Spending challenges can be an effective way to learn a lot about food finance in a brief amount of time.

To name a few challenging ideas:

  1. The Envelope Method: create budget categories for the month, assign a dollar amount, and keep cash for each budget line in a marked envelope. Once you spend the amount in the envelope, you are done in that category (until next month).
  2. Dollar Limit: take the amount you spend on food for one month and challenge yourself to reduce that by 25%-50% (e.g., from $100 to $75 or $50). Get creative for the month to reduce food spending as much as possible.
  3. No Takeout Challenge: eliminate takeout and delivery food for one month. This was the best food challenge I ever participated in. I felt like my takeout and delivery spending was becoming excessive, so I challenged myself to completely cut it out. I ultimately went more than 100 days without eating takeout or delivery. During that time, I cooked more fresh food, tried bunches of new recipes, and learned a lot about my palate.

Check in after one month, two months, three months, etc. Are you becoming more aware of your spending? Have you tried anything new?

If you are still not saving as much money as you aimed to, that’s okay. You don’t need to save a specific amount while you’re learning food finance consciousness.

It’s a long learning process and one that evolves as we grow. You don’t have to start from the beginning–take a deep breath, look closer at your spending, and brainstorm any way to cut back.

Often times, the decisions you make the reduce your food spending can also lead to trying delicious, new recipes.

uso online tools to budget your food finance
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Use online tools to continue making progress toward better financial health. I prefer to use a custom Google sheet to track my spending and keep up with savings goals.

About once per week, I enter in all my purchases and make observations. If I feel I’ve overspent in any particular area (i.e., eating at restaurants), I make every effort to cut back.

Some people prefer existing resources such as Mint, You Need A Budget or savings services built into online banking dashboards.

After a few months of progress and deepened understanding of your personal food finance, develop a few principles or a mantra to live by.

This will allow you to quickly determine whether or not a food purchase matches your desired financial outcomes.

For example, I have two questions I always ask when I’m deciding how to spend money on food:

Will this purchase add value to my life?
Could I easily make this at home for less money?

Do your best to learn from your financial errors. Slowly, mindfully work through these simple strategies and keep your personal finance goals in view.

With some time, you’ll learn best practices for your family’s food finances. The more you can ultimately save on food, the more you can spend on meaningful life experiences.

Disclaimer: I am not a credentialed financial expert. I’m just a young adult with a passion for personal finance and with some experiences to share.

how to improve food spending
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Written by Jane Diener

Freelance writer, foodie, and budget enthusiast. She enjoys spending time outside, watching the "Great British Bake Off" on repeat, and
concocting new recipes in her favorite room in the house: the kitchen.