Cost of Food: Eating up your budget?

Cost of Food- Eating up your budget?
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Family Food Budget

One of the wonderful things about living in the Bay Area is the excellent food.  But spending at great groceries stores, farmer’s markets and restaurants can add up each month.  Food related expenses tend to eat up a big part of a family budget, and one of the most frequent questions I get from couples is “How much should we spend on food?”

My answer to that question depends on the family’s specific situation. Ask yourself the following questions right now:

1) Do you know how much you spend on groceries, eating out, and coffee?

2) Is buying organic a priority?

3) Do you love eating out?

Answers to these questions will drive a big portion of your spending on food.  If you cannot answer question #1, look at your spending for a couple of months and add up all the charges for grocery, eating out and coffee. Take the average of those months and decide if that number feels comfortable for your family.

If you want to know how you compare to your neighbor, here are averages to help you gauge whether you are overspending in this area.

According to, the average monthly spending on all Food & Dining in San Francisco is $1,325, compared to the California average of $1,282 and US average of $1,169. These averages are not specifically for families, so it probably underestimates how much a family spends on food. However, this clearly shows that it costs more to eat in the Bay Area.

From my years as a financial planner, most families in the Bay Area spend between $800-1,200 each month on groceries.  Add to this the cost of eating out, coffee shops and convenience items; you are looking at an additional $250-$1,000 per month depending on your lifestyle.  This is a wide range, and where you fall in this range depends on how important food is to you and how much you can afford to spend. The good news is that eating out is discretionary and can be reduced relatively easily by more mindful

For example, a burrito take-out dinner for a family of four will likely run you $35 without beverages. You could make that same dinner at home for about $15. Is the extra $20 worth the convenience? Sometimes the answer is yes. But consider the opportunity cost of that money. If you took the $20 per week and invested it earning 5%, you would have $1,067 at the end of a year.

The USDA kindly provides “Official USDA Food Plans” to help families decide how much money they should be spending on food.  They provide four food plans: Thrifty, Low-cost, Moderate and Liberal. For a family of four with children under the age of 5, the four plans range from $533 to $1,035 per month on groceries. These plans assume that all meals and snacks are prepared at home.  If you adjust these averages for an increase in the cost of living in the Bay Area (about 13%), this brings you to $1,170 per month on food if you are on a Liberal Food Plan.

Inflation is also rearing its head in grocery prices. They have increased about 3.9% year-over-year. So a Bay Area “Liberal Food Plan” will likely increase from $1,170 to $1,217. Hopefully your paycheck will go up as well, but if it doesn’t, proactive planning can lessen the bite to your family budget.





Based on June 2011 data provided by USDA Center for Nutrition Policy and

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