Food cost as a percentage of the average U.S. household budget has decreased dramatically over time. Back in 1900, families spent about 40% of their income on food. By 1950, it was just under 30%. According to the most recent data from the U.S. Bureau of Labor Statistics, in 2013, the average American household spent about 10% of its total budget on food.
The average food cost for a U.S. household was $6,602 in 2013. That’s roughly $2,641 annually per person (based on the average 2.5 people in each household). The average cost of food per month for the typical American household is about $550. First, we'll show the breakdown of the budget for food prepared or consumed at home, and then the total overall food budget.
Average food costs
The item that takes the biggest bite out of our food budget isn’t even food at all. We spend nearly 6% of our total food budgets on nonalcoholic beverages (not including milk).
Nonalcoholic beverages include coffee and tea, colas and other carbonated drinks, bottled water, fruit drinks and sports drinks. Fresh fruits and other canned and prepared foods make up the next two largest categories in the typical American household grocery list.
Average U.S. household budget for food at home of $3,935
The other items that make up large proportions of the typical U.S. food budget would be familiar to any American:
Household budget: Food at home
Average annual amount
Other canned and prepared foods
Other bakery products
Milk and cream
Sugar and sweets
Condiments and seasonings
Average U.S. household food budget of $6,602
On average, we spend 60% of our food budgets on meals and snacks we eat at home, and we spend 40% of our food costs on eating out.
Total food budget for average U.S. household
Food away from home
Food at home
Who gets cheap food and who spends a lot?
Higher-earning households, meaning those bringing in more than $70,000 per year, spend nearly three times as much on food compared to the lowest-earning families with incomes under $20,000.
Wealthier families also spend a greater proportion of their income — about 45% — on food away from home, which includes restaurant meals.
Households headed by both the very youngest and oldest Americans spend less on food compared to those between ages 25 and 64, in accordance with their lower income levels. When it comes to food and other costs, families with less money to spend have to be thrifty. And families in the Midwest spend less on food than those in other parts of the U.S.
While food costs are often considered a budget category that can be easily pared back, we all need to eat. Even households earning less than $500 per month spend nearly $300 a month on food. Still, we can learn from the cooking and eating habits of families who spend less to feed themselves.
By looking at consumer expenditures, we can see that the families who spend the least on food buy proportionally more grocery items like rice, eggs, dairy products, fats and oils, sugar and condiments. They also spend proportionally more on fresh fruits and vegetables, compared to households with higher incomes. This suggests that they prepare more meals at home, and indeed, they spent between 65% and 72% of their food budgets on food consumed at home.
When they do eat out with the remainder of their food budget, they spend far less at full-service restaurants and proportionally more buying food from mobile vendors and in cafeterias.
Cheap eats: How to save on food
Whatever your food budget, you can probably borrow some tactics from thrifty households to cut your costs even further. Try to work these methods into your family’s food plan.
1. Cook at home
It does take more time, but cooking and eating at home can save you loads of money in the long run. Consider that the actual cost of food for a restaurant meal is less than a third of what you pay for it. The rest of the money you spend at a restaurant goes to other costs like labor and overhead. If you cook at home, you only pay the food cost and pocket the rest.
2. Stock up on staples
Already buying lots of beans, you say? Stop hauling home heavy cans, and buy dried ones that you soak yourself. Load up on cereals, too, like rice, cornmeal and oatmeal. Eggs, peanut butter and bread can also go a long way toward feeding a hungry family on a tight budget.
3. Swap pricey proteins and goods for cheaper ones
Ground beef costs less per pound than steak. And poultry tends to be cheaper than other types of meat. Save the scallops for really special occasions; canned fish and seafood can be good, cheap and healthy alternatives.
If you’re trying to chip away at your food budget, and you’re spending a ton on nonalcoholic beverages, like the average American family, we have two words for you: tap water. If the water tastes terrible where you live, try squeezing in a lemon or boiling it into tea. Buying coffee at chains like Starbucks or Dunkin’ Donuts everyday, while convenient, can quickly total about $5k to $7k over a decade, based on our calculations. Consider investing in a Keurig, a Nespresso or even a regular drip coffee maker to chip away at your coffee habit.
Food and drinks are essential for survival, but a few small tweaks can help you spend less on them so you and your family have more money to put toward other important parts of your lives.