Are You Paying More Than the Average American for Groceries?

With inflation continuing to hold the cost of everyday items high across the nation, and a dollar just not stretching like it used to, it can be really easy to kick yourself when you look at your monthly expenditures. Grocery costs have been outrageous for the last several years due to a range of factors that include supply chain issues, with January 2024's year-over-year food at home index increasing 1.2% and overall inflation rising another 3.1% year over year.

Regardless of the why, you're living with the "what now?" Do you know how your grocery bill stacks up to the average American's?

Does anyone track grocery bills?

A few different government agencies keep track of food costs and what realistic grocery budgets should be. One is the U.S. Department of Agriculture (USDA), which tracks the price of specific hypothetical "baskets" of food for each of its pricing models. It's been using its most recent model since 2007, pricing out what it would cost to feed Americans the recommended nutrients based on different budgetary levels.

It's an interesting approach that can help a family or an individual figure out just how much they should spend on a healthy diet that's wholly prepared at home. It's never going to be exact because prices vary regionally, but it's a great ballpark to start with.

The U.S. Bureau of Labor Statistics (BLS) compiles the Consumer Expenditure Survey. This survey looks at a range of consumer expenses, from housing to utilities and even clothing. This is a measure of actual costs for food, as reported by consumers, versus the USDA's hypothetical ideal healthy diet.

So what do Americans pay for groceries?

The next time you're in line at the market, you may wonder what other people are spending, as well as what the USDA feels is an ideal amount of money to spend for a healthy diet. Let's look at those numbers now.

The USDA approach

The USDA publishes three different plans for grocery spending: a low-cost plan, a moderate-cost plan, and a liberal plan. Depending on your household budget, any of these may apply. It further divides the grocery baskets into age-sex groups, and assumes that you'll pick four people out of the list to build your grocery order. The published table allows for additional adjustments, such as adding 20% to the price if you're a family of one.

Let's look at an example. In this scenario, we've got a family of four: mother, father, and two children, aged 6 and 10.

According to the USDA, their costs should look roughly like this:

For a single person living alone, you'd use the same chart, but add 20% to your cost. So, for example, for a woman aged 19 to 50, her monthly ideal food plan should cost between $310.68 and $483.60.

The BLS approach

When you look at the Consumer Expenditure Survey (CES), you get a different peek at household spending. This is compiled using actual data from actual humans, not idealized data based on healthy diets, as envisioned by the USDA. What I mean to say is that the people of the CES buy Oreos at the market, if you get my drift.

When you look at the CES, you'll see a year's worth of expenditures, divided by category. Since we're talking about groceries specifically, we're going to lean on the "Food at Home" category, which is different from "Food Away From Home," and doesn't include alcoholic beverages.

The data is divided a bit differently, but you can see categories like "Married couple with children, oldest child 6 to 17" and "single person and other consumer units," which will roughly correspond to our above families.

For the couple with the kids, grocery expenses in 2022 (the most recent year available) were approximately $8,486. For the single person, it was $4,081. That's $707.16 and $340.08, respectively. Remember, this doesn't account for meals eaten away from home, like school lunches or drive-thru tacos during a busy day at the office.

So what should you pay for groceries in 2024?

How much you should pay for groceries varies widely depending on your family size, your location, and most of all, your dietary needs. If you have a lot of food allergies, for example, you're probably going to end up spending a great deal more than the average family.

Remember, personal finance is personal, and your costs won't be the same as anyone else's.

If you look at your budget and don't like what you see, the first thing to do is to sort frivolous spending from necessary spending. Consider buying in bulk and cooking staples in batches, since this will both minimize the work you have to do in the kitchen and the number of trips you take to the store. In addition, keep an eye on your grocery store's app, third-party coupon apps, and even paper mailers for coupons and special offers that can save you even more.