Americans Struggle As Food Becomes Third-Biggest Expense For Household Budgets — See How Your Budget Compares To The Average And Find Ways To Save

American households spend around $6,080 per month on average on an income of $94,003, according to U.S. Bureau of Labor Statistics data from 2022.

Between 2020 and 2022, average incomes rose by 7.5%, but annual expenditures rose by 9%. The gap between earning and spending puts considerable pressure on households to pay their bills while also trying to save for the future. Government data shows the most recent savings rate for January was 3.8%, based on a percentage of personal disposable income. 

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Where The Money Goes

People spend most of their budget on housing, transportation, and food, the Bureau of Labor Statistics found. People spent 33.3% on housing in 2023, 16.8% on transportation and 12.8% on food. 

Food Costs Continue to Rise

Food prices increased by 5.8% in 2023, while inflation rose by 3.4%, according to the U.S. Department of Agriculture (USDA). The previous year saw an even steeper increase of  9.9%, the highest rate since the late 1970s. This broke down to an 11.4% increase for food-at-home prices and a 7.7% for eating-out prices. 

Data from the U.S. Bureau of Labor Statistics found The second-biggest percentage increase for 2022 was in food spending, with a 12.7% boost, reflecting higher prices for all types of food purchases, according to the U.S. Bureau of Labor Statistics.

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Guidelines Out Of Touch?

How much should a family of four spend on groceries? The USDA recommends spending plans for families every month. These fall into different categories, known as Thrifty, Low-cost, Moderate-cost and Liberal. Recent figures for a family of four put the Thrifty budget at about $975 per month, with the Moderate and Liberal plans at $1,300 to $1,600. The Thrifty plan level is often the point at which families can receive food stamps. 

How can the average household lower food costs while ensuring proper nutrition and health? Here are some tips to stretch your food budget:

• Use what you have. Go through your refrigerator and pantry and ensure you eat already purchased food before it expires. USDA data says 30% to 40% of food in the U.S. is wasted, and a survey from MITRE found that American households toss about 6.2 cups of food per week. 
• Compare prices by the ounce. Buying the larger bulk size is not always the best route, especially for food that can expire soon. Check the per-ounce costs to find the best deals. 
• Make a meal plan. Think about meals for the week, with eating out or Uber Eats as a scheduled treat, not a frequent backup plan. 
• Avoid buying items you do not need or will eat just because they are on sale. 
• Save leftovers for lunch the next day. If you work in an office or at home, a leftover lunch can provide you with significant time and money savings.
• Buy in-season produce at a lower price to save money while eating healthy. 

Lowering your monthly food costs is part of a broader household budget. Consider working with a financial adviser to learn more about budgeting, retirement planning and long-term fiscal management. 

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*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.

Aran Richardson has written about personal finance, investing and a range of related topics for various publications. He is not a licensed financial adviser, and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Richardson believes the information contained herein is reliable and derived from reliable sources, there is no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information.