Dave Ramsey Says This Is One of the Easiest Things to Overspend On

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KEY POINTS

  • Dave Ramsey says that food is one of the easiest budget categories to overspend on.
  • Food is the third-largest monthly expense on average, and it can vary heavily depending on your grocery shopping and dining habits.
  • To reduce food spending, set a limit on how much you'll go out to eat, look for budget-friendly recipes, and shop with a plan.

A crucial part of reaching your financial goals is not overspending on your regular expenses. When you spend wisely, it helps you avoid debt and frees up more money to put toward savings and investments. While everyone has quite a few monthly expenses to manage, there's one in particular where people often overspend, according to Dave Ramsey.

Here's where Dave Ramsey says you should watch out for overspending

Dave Ramsey recently said, "Food is one of the easiest budget categories to overspend on. If you can get that under control each month, your entire budget can change."

What makes food such an easy category to overspend in? For starters, it tends to be one of the largest regular expenses people have. Among American households' average monthly expenses, food is the third-largest at $691 per month ($8,289 per year) as of 2021. It accounts for 12% of people's average spending and 11% of income. Only housing and transportation were more expensive on average.

It's also not a fixed cost, and that's why it's harder to manage than housing and transportation. You probably pay the same amount every month for housing, a car payment (if you have one), and auto insurance.

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Food costs, on the other hand, can vary heavily from month to month. If you go out for dinner more than usual one month, you could end up spending hundreds of dollars more. The groceries you buy, and the grocery stores you shop at, also make a big difference in how much you spend. And I'd be remiss not to mention inflation. By February 2023, food prices had increased by 9.5% over the previous year.

How to spend less on food

Food may be easy to overspend on, but the good news is that it's also an easy place to reduce your spending. With a few adjustments here, you could save more money to put toward your personal finance goals.

Start by limiting how often you go out to eat. Since a meal at a restaurant is much more expensive than preparing something at home, dining out quickly adds up. This doesn't mean you need to stop going out entirely and not have a social life. Just figure out what works for your spending plan and money goals, and see if you can swap out some restaurant hangouts for low-cost alternatives.

When it comes to grocery shopping, there are several great ways to cut costs. Here are some tips to try out:

  • Always shop with a plan. Make a grocery list before you go to the store and stick to it. You're more likely to stay on budget and less likely to forget things this way. Meal planning is a good way to know exactly what you'll need at the store.
  • Choose budget-friendly recipes. You don't need to go on a beans and rice diet to save on groceries. There are tons of websites, apps, and cookbooks with all kinds of inexpensive and tasty meal ideas.
  • Keep it simple -- one grocery store, one day per week. Shopping more often usually means spending more, so visiting multiple stores or shopping more than once per week can both lead to a higher grocery bill. If you want to save time and money, pick one store you like and try your best to do most or all of your shopping there.
  • Pay with a grocery credit card. Many of the top grocery credit cards earn 3% to as high as 6% back on your supermarket spending, so they're a helpful savings tool.
  • Save more with a coupon app. These allow you to earn more back or clip digital coupons and redeem them at checkout.

You don't need to be too strict with yourself as you do this. You can follow these tips all the time if you want, or you can pick and choose. They work if you're happy with your grocery bills already and would just like to save a little extra, or if you're looking for a complete overhaul of your food spending.

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