LESSON 12: The BIG 4 - #3 Food
- Philip Stratton
- May 13, 2022
- 2 min read
There are numerous studies on how Americans spend their income as a percentage of their pay. A common claim is that households spend approximately 75% of their income in only 4 areas: Housing, Transportation, Food, and Clothing. The following chart which shows spending by category over the 73-year period of 1941-2014 does show how these categories, especially the first three, are far greater than the others. In more recent years, healthcare and entertainment spending has exceeded clothing.

Our son just completed his first year of college. He is attending a university approximately 2.5 hours away from our home where he lived in the dorm and ate in the dining hall (a requirement for freshmen). There were 3 or 4 meal options to choose from during the enrollment process. All were similarly priced but varied in terms of dining hall meals allowed versus "flex dollars" that could be used at campus restaurants. We opted for the unlimited plan, which allowed for the most dining hall meals and least flex dollars. If he ate 3 meals per day, his per meal rate would be around $8.00. That's $720 per month! In comparison, we typically budget $830 per month for food for our family of 3. Hopefully, we can lower the cost next semester when he returns to campus in a shared apartment with kitchen facilities.
Families don't often analyze how much money is spent on food. After all, 'ya gotta eat', right? The groceries bill for many families of 4 is in the $1,200-$1,500 range per an April 2022 USDA report. Families that might clip coupons and look for best prices tend to bring that cost to under $1,000. But this is before restaurant and carry-out meals, which typically costs American families another $250 to $330 per month. Therefore, at the high end the monthly cost for food can be around $1,830, or over $20 per meal!
It's no wonder that when financial podcasts such as YNAB, ChooseFI, Stacking Benjamins, and others interview people that have paid off large amount of debt and ask how they did it, the #1 answer is a change to their food spending. The fact is it is cheaper, and often healthier, to prepare your meals at home. When you eat at restaurants or take carry-out, the price you pay includes the cost of the food, the wages of the cooking staff, the wage and tip for the serving staff, the cost of the building and equipment, and the owner's profit.
Brad Barrett, co-host of the ChooseFI podcast that talks about Financial Independence, and his wife attempt to keep their costs to around $2.00 per meal and have created a list of some of their favorite recipes. With a little time and internet exploring effort, you are likely to find many other websites and resources to help you stretch your food budget.
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