Monday, February 20, 2012

How much do you spend on food?

Do you spend a normal amount on food? What is a normal amount, anyway, and what kind of food do you get for the money? How much is enough?

Graph: Monthly spending on groceries and restaurants: my household,  finance blogger and Portland foodie J.D. Roth, the average Massachusetts household, the average American household, and the average household in nearby West Springfield, MA.

Hey, big spender

Kevin and I spent $22,320 on food in the last year. That’s $930 per person, per month, or about $10.33 per meal. That’s for everything: meat and drink, junk food and fine dining, farm shares and grocery shopping. It includes holiday food and dinner parties. After taxes and rent, it’s our largest expense.

Is it a lot of money to spend on food? I could compare it to what other people spend. But who? And what are they eating for their money?

I know that our values around food mean that I should expect our grocery spending to be higher than average. And boy, is it. We probably spend three times what this guy does on groceries:

What is average?

The reason we spend so much on groceries is that we care a lot about the qualities of our food: where, how, and when it was raised. We Americans spend somewhere around eleven percent of our income on food, say our government agencies, though even they can’t agree on a precise figure. In this graphic on Visual Economics, the average American household spent 12.4% of their income on food, close to the 13% spent on food in these US Census figures. An expert quoted in this MSNBC news piece says that families spend more like 15-20% on food, including both groceries and eating out.

People don’t keep buying more and more food as they make more money: as people rise out of poverty, they buy enough food, and then they buy better quality food. They also buy more restaurant food. Eventually, food spending levels off as a percentage of income. The richest people (those making over $125K) spend ten percent or less of their income on food, while those in the lowest income bracket (earning below $20K) can easily spend a third of their income on food.

Who should Kevin and I compare ourselves to? Starting with an official recommendation, the USDA considers spending about $240 a month, per adult, on food “moderate.” In the Visual Economics graphic linked to above, the average American household spends around $200 a month per person. According to the US Census, for all households making less than $70K, the average spent on food is almost twice that: almost $400 a month per person.

How much is that per meal?

If you are spending $400 a month on food, that’s less than five dollars a meal.
When Slow Food USA challenged Americans to come up with alternatives to fast food, people made fresh food for five dollars a meal. The premise of the $5 Challenge was not only that home cooking is comparable to the price of a fast food meal, but that it was superior in many ways.

It’s possible to eat well on half this amount. This family ate really well for $2.38 a meal, mainly on fresh, local foods prepared at home, to demonstrate that such a diet is not beyond the reach of even moderate budgets. The difference lies in their resourcefulness and dedication to their goal.

Not long ago, there was news of a study claiming Americans can’t afford to get enough potassium. Potassium is one of the easiest, cheapest nutrients to get enough of: it’s in almost all fruits and vegetables. The claim was based on what the people who do eat enough potassium shop for, and how much of those foods you would need to eat to get enough potassium, not the cheapest way to meet your nutritional needs. People who eat well enough generally spend more than $2.38 a meal, which is not to say that the only way to eat well enough is to spend more, only that it gets easier when money is less of a factor because you have more options.

What do we eat, when we eat out?

Most of the reports I’ve found on spending indicate that just about all Americans spend somewhere between one and two times the amount on groceries that they do on restaurant food. Americans eat out twice as often as we did in the 1970s, and as income rises, people spend more money on restaurants.

Although Kevin and I are off the charts when it comes to grocery expenditures, we’re cheap when it comes to eating out. We rarely go out to eat, spending less than $175 a month on restaurants and take-out. While finance blogger and self-described Portland foodie J.D. Roth and his partner spend more than a third of their food dollars out, like the average American family, Kevin and I spend less than ten percent of our total food budget away from home.

Food that people prepare at home is more nutritious than what they buy in restaurants, according to this USDA economic bulletin. Restaurant meals don’t necessarily get healthier, the more money you spend. In fact, while people will seek out a sit-down restaurant in part because they want to eat “real” food, they can make even worse food choices than are available at a fast food drive through. The Heart Attack Grill, home of the Triple Bypass Burger, is a sit-down option, and if you weigh more than 350 lbs, it’s free. Which just goes to show that every meal has its price.