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Monday, January 14, 2008

We Saved 33% on our Grocery Bill



Since we have began our Personal Finance and Budget journey, we knew we needed to get one of our largest bills in line as well, groceries. This was one of the largest "bills" in our budget and it was creeping up. With three growing kids, me (kid four?) and my wife being an amazing Chef, our bill was out of control.

We had a lot of big dinners at the house to entertain family and friends and always insisted on doing everything ourselves. But besides packing on the pounds, we were packing on the bills as well.

So how did we cut our bill by $400+ per month? Here is what we did:

  • Set a More Realistic Budget - We looked back to when we were running better in controlling our money and then set a goal that was took into account what was reasonable for a five person family with the Holiday coming.
  • Started by Meal Planning - What were we going to have to eat and when? My wife being the chef, didn't want to fall into the Tuesday is Meatloaf night sort of house either. But being 100% flexible was costing us with one-off trips to the store, where we always came back with more then what we needed.
  • Went to cash ONLY on Groceries - The best way to not overspend is to make it impossible. Use cash. I get paid every two weeks and when we do we take half the budget and use the envelope system. The potential embarrassment of having the store put things back will keep you paying attention! If we go over, it comes directly out of our Entertainment and Dining Out money. Then out of our small personal allowances! Ouch!
  • Put Chef in charge of grocery money! - They make it, and knows what and where they can substitute to save money.
  • Take advantage of store loss leaders - Almost all grocery stores print a set of coupons and deals during the week. Here it is Tuesday. These are the stores products that they take short margins, or even a loss to get you in the door. We take 20% of our grocery money for stock-ups of these deals. This can be Costco money as well. BE Warned: Do Not stock-up on non-needs! You do not need to buy a 55 gallon drum of pickles! It isn't a deal if they are never/half used!
  • Multi-Store It!- Usually store will have a specialty to try to be different then the other local stores, so it doesn't turn into a blood bath margin-wise every week. So in other words, Albertson's won't make a big push on hamburger when Ralph's does, if possible. Work the food ads and go to separate stores, it will take more time, but I would almost guarantee if you aren't doing this step it is costing you 10%+. Even with gas prices it pays for itself.
  • Only go with a list - Then only buy what's on the list. If something else sounds good, you have to cut the other stuff right then. Part of the power of cash! It is such a pain to do, it will be the exception rather than the rule moving forward.
  • Incentivize - If you beat the grocery bill have (or some amount, goes Into Entertainment or dining. Your kids will start trying to help cut things if there is something in it for them, like an extra DVD or Video game rental if you beat budget.
  • Snack-itis - Limit snack foods or cut them out. They are bad for you and are some of the highest margin items in a grocery store! If you do buy some, make sure everyone knows when they are gone, they are gone. This is the best tip for those of us with teenagers, who eat EVERYTHING!
  • Dinner Parties with family and Friends - Make it potluck! In fact, try to have one of these at least a month. It s great to get everyone together and it is cheaper then a hosted Sunday meal.

We aren't perfect by a longshot, but this has been one of our significant savings on our budget. Money that goes right to our debt reduction or savings...Oh yeah, one last thing...don't go to the store hungry either...they are right about that one...unless it is Costco on Saturday; Free sample laden Lunch!

7 Comments:

Catherine Lawson said...

That is a huge saving and they are great tips. I would also add - never shop on an empty stomach. You tend to buy more when you feel really hungry.

paradigmshifted said...

Food is my big money-sucker, and while I've found ways to cut it down, it's still quite a bit more than I'd want it to be. I've cut back significantly on dining out, but the grocery bill is the big black hole. I know what the problem is too - I shop at Whole Foods. :)

RacerX said...

@ CathL - Totally agree, finished the list remembered I had forgot that tip, so I kind of snuck it in at the close. However, it is true that everything looks good when you are hungry!

@pardigmshifted - One of our fears when making our budget was that we were cutting dining out back a bunch. I thought that this might blow-out our grocery budget, but we were able to do both!

Whole Foods is great, wish we had one here. But if you did the multi-store thing and only got those few comfort things from WF, I bet you could save a bunch.

Thanks for reading and commenting!

Linda said...

These are all great tips. Your mention of DVD and Video games brought another tip to mind. Switch to monthly online rental subscriptions. Our family uses www.netflix.com for movies and www.gamefly.com for video games. Both are the current leaders for movies and video games, respectively.

Gamefly in particular has a lot of great family features like parental controls, ratings, and user reviews. Both service help our family make smart choices and are much cheaper than buying.

You also know before hand what your entertainment budget will be for movies and video games for the whole year!

RacerX said...

Good tip on GameFly.I haven't used them but some friends really like them.

The main reason that we don't use a subsciption service is that if we go over in our other bills we hit Entertainment and Dining first. We are budgeted out on both of those items though.

We could probably save even more as you stated, but I don't like locking in funds if I can avaid them.

That is just me though and both NetFlicks and GameFly are great for most.

Thanks for commenting!

Heidi at BankerGirl said...

Way to cut the grocery budget!

We have been meal planning the past couple of weeks, and it's really making a difference.

I also shop at several stores - there's a specialty grocery store down the street that makes their own fresh mozzerella - and it's cheaper than the crappy, waxy stuff you'll find a most places. You have to know where to look for bargins!

Nice post.

RacerX said...

That great Heidi! You have really been kickin' butt...everywhere :)

Thanks for Reading so much!

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