If you want to save money on groceries and food costs, I’ve got some good news for you. This is probably the easiest home budgeting area to get under control. That’s because there are so many food choices and we tend to pay in cash or with a debit card.
In addition, if you aren’t putting away at least 10% of your income toward building wealth and retirement, it’s time to look a little deeper into where your money is going. Again, the food and groceries category is a good starting point.
By making some adjustments here and there, it’s possible to reduce these costs by 25% or more per month.
Most of us don’t track how much we spend on food and groceries. When the cupboard is bear or we get hungry, we take a trip to the market, visit a restaurant, or order in. All of these costs combined add up to more than you might think.
In 2009, the U.S. Bureau of Labor Statistics performed a study of consumer spending habits on food. They found that the average American spent about $6400 per year on food, which amounts to about 13% of total household income.
When they broke down that number a little further, they discovered that 50% was spent at the supermarket and the other half went to restaurants and food delivery services.
If those are numbers that you can relate to, then there’s no reason why you can’t save money on groceries and food costs, and put more towards retirement. Here are 10 specific ways to live more frugally and get your costs down:
1. Stop eating out and ordering in
Even if a family of four visits a modestly price restaurant, the bill is probably going to run $35-$50. Have a glass of wine or two and it could easily go higher.
Similarly, ordering in from a restaurant may keep you on the low side of that range, but it can still add up. If your family eats out or orders in just a couple of times a month, that comes to $840-$1200 per year. That’s a nice chunk of money going out the door if you’re looking to get a handle on your personal finances.
I know it feels good to get out of the house every now and then for some fresh air and entertainment, but be aware of what it’s costing you. Consider reducing the number of times you eat out or order in by at least half.
And if you love the taste and quality of restaurant food, you can prepare similar meals at home. Here’s a link to a cookbook where you can get famous restaurant recipes.
To further make it a fun evening at home with the family, eat your meals on the patio or deck. Light some candles and have fun music playing in the background. Where there’s a will, there’s a way.
2. Use food coupons to save money on groceries
Coupon clipping is all the rage. That’s because times are tough and they represent free money. Food coupons come with a wide variety of deals. You can redeem some of them for a discount on the item you purchase. Then there are other coupons that encourage you buy one item and get the second one for free. Product manufacturers are very creative with how they use coupons.
Today, it’s very easy to find and clip useful coupons. In fact, you’re only a mouse click away. Check out sites like x and x for great deals.
Also, when you visit your local supermarket, be on the look out for instant coupons and buy one, get one free deals. In my area, the big supermarket is Publix. They frequently rotate the buy one, get one free offer across a wide variety of items. It always brings a smile to my face when the deal lands on an item that I had already planned on purchasing.
3. Avoid brand names
Yes, sometimes you can find great deals on brand name food items. But the non-brand names will generally be cheaper, and often by a lot.
And I know that for some foods the brand names will taste better. I understand. I just want you to look across the wide spectrum of foods that you purchase and consider the non-name brand alternatives.
Start by finding alternatives to the most expensive brands. You may be surprised. I use to buy more expensive olive oil. But I found a cheaper brand that I liked and don’t at all regret making the switch.
4. Take meals to work
I know it’s cool and hip to go out to lunch with co-workers. But, man, does it add up.
You can save a chunk of money by making and taking your lunch to work. The added benefit is that what you prepare will likely be kinder to your waistline.
5. Shop at cheaper locations to save money on groceries
In my hometown in South Florida, we have the basic big box style supermarkets, such as Publix. Then there are slightly more upscale markets such as Fresh Market and Whole Foods. Then there are specialty stores like the Italian supermarkets, seafood shops, etc. It’s probably the same in your town.
The big box supermarkets are where you’ll generally find the lowest prices because the name of their game is huge volume. This is where I buy and save money on groceries 90% of the time.
For the other 10% of the time, I’ll visit the more expensive markets. But this is usually done if I’m entertaining or in the mood for something extra special. Hey, what can I say, sometimes I want to throw a prime 2-inch thick Ribeye steak on the grill.
6. Eat more budget-stretching foods
One of my absolute favorite foods happens to be soups. I love all kinds — split pea, green pea, black bean, etc., especially in winter. I eat soups year round because they are so flavorful.
But did you know that soups are one of the least expensive dishes to make and one of the healthiest to eat? You could easily make four quarts of soup for under $15. It’s as simple as doing this.
Get a big pot and a 16 oz. bag of your favorite dried beans or peas. All you need to do is throw in a chopped oinion, carrots, celery, beef/chicken stock or water, and spices. If you want some added flavor and protein in there, toss in very inexpensive cuts of meat such as neckbones. This would be enough to feed a family of four for a couple of hearty meals and maybe more. Freeze what you don’t eat right away.
Other budget-stretching foods include items such as pastas, rice, and potatoes. Just be sure to keep things as healthy as possible. Remember that the more ingredients there are on the label that you don’t recognize, the worse it is for you.
7. Buy in bulk to save money on groceries
Companies like Costco and Wal-Mart are specialist at offering food in large sizes and bulk qualities. The benefit of purchasing in bulk is that the cost per ounce will be cheaper than if you had purchased that item in it’s normal smaller size.
If you’re a family of four, there’s no reason why you shouldn’t be buying in bulk.
8. Analyze prices
This sounds like it might be a hard thing to do, but it isn’t. In fact, it’s quite simple.
When you visit the supermarket and are perusing items on the shelf, pay attention to the price sticker attached to the shelf beneath the item.
The small print is the key to you saving money. If you look closely, most stickers will show a number that says price per ounce or price per oz. This means that for a 16 ounce jar of spaghetti sauce that cost $4.99, the price per ounce would be .31 cents ($4.99/16 oz).
So when choosing among similar products, you always want to buy the one that has the lowest price per ounce amount.
9. Don’t shop often
We all like to think that when we visit the supermarket to buy one specific item, that’s all we’re going to walk out with. Usually doesn’t work out that way, does it?
Inevitably, the visit for milk, turns into grabbing several items. Often, it includes things that we don’t really need, like a bag of chocolate chip cookies or 12-pack of soda.
So, the moral of the story is that if you don’t shop too often, you won’t make as many spontaneous purchases.
10. Stop charging food on your credit card
When I’m standing in the checkout line at the supermarket, it always surprises me that so many people charge groceries on their credit cards — Visa, Mastercard, whatever.
This would not be a bad thing if they paid off their credit card in full every month. But most people don’t do that. The purchase of groceries tends to get paid off over multiple months, along with the added interest. Those people are essentially paying more money for food they’ve already eaten.
The interest costs may seem small, but they add up over time.
In conclusion, there are a number of ways to save money on groceries. Start by preparing all your meals at home. Then stretch your budget by doing things like buying in bulk, choosing generic food brands, and generally paying closer attention to the prices you’re paying for what you eat.