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!

A MAP to Christmas...

I am not sure how familiar you will all be with the concept, but I thought that it may be a neat topic to discuss MAP.

No I don't mean Map Quest, Google Maps, or those 180-panel maps that cannot be refolded. I am talking about Minimum Advertised Price! Most stores that you will shop in this holiday adhere to this policy and those that don't, well you either see key products advertised or potentially even available.

Ever wonder that, for the most part, everywhere you go the Wii is $249 no matter pretty much where you get it? Don't cha thick Wal-Mart would try to under-sell Best Buy on this (if they had them) just to get you into their stores?

No can do.

There is probably a Minimum Advertised Price for the piece or perhaps even an Minimum Selling Price.

But why would Nintendo care, they make their money selling to Wal-Mart and Best Buy, locking in their profit? Basically to make sure that all of their dealers have a chance to make some margin on the product. Nintendo cannot afford to just have Best Buy and Wal-Mart as their only dealers, because they probably (deservedly so) get better pricing based on the volume they buy.

Basically without this protection, little Mom and Pop shops could be crushed.

In fact, in many cases if you won't adhere to the policy the vendor won't open (or keep you) you as a reseller. This is why you rarely see Sony in Costco. Costco won't sell at an agreed upon price as they are an EDLP reseller, or Everyday Low Price. This means the generally they price cost up. They want to make X on light bulbs so they charge their cost plus X margin. So if they want to sell Sony they have to find a whole seller that will sell to them, albeit at a higher price.

Until recently all this policy was kind of on the fringes as it walked a tight line to price fixing which is illegal...until recently.

The Supreme Court (not to be confused with the Supremes in court) recently handed down a verdict that made it legal for manufactures to be able to set Minimum Sell Prices for the first time officially. Basically a Costco-type place sued a high-end Purse manufacturer saying that they violated price fixing laws by cutting them off from reselling the purses.

After all the arguments the Court agreed with the manufacturer, basically agreeing that the manufacture can sometimes take steps in order to protect their brick and mortar dealers from over zealous competition.

So where will this end up? Well discounters are a smart bunch and this is why you see new promotions like "Gift Card Sales" or "Come in and Save" type promos.

While MAP means that it can be tough to get lower prices on top-flight gear, at least there is bio-diversity in what stores you can shop...