5 Tips to Help You Save at Least $200/month on Groceries
I’ve already discussed how food is one of the biggest money pits in your monthly budget. Most people overspend on groceries. How do you plug up those food holes in your monthly spending?
Let’s start with what is ‘normal’. The U.S. Department of Agriculture suggests Americans spend roughly between $150-300/person/month on food ($300 is considered a “liberal cost” food plan). For a family of four, you should be spending roughly $600 - $1200 on groceries per month for everyone. If you live on a coast and in a city, you may be at the higher end of that range. I recommend my clients stay at $1000 or less per month for a family of four.
How do you know what you spend on groceries? That’s easy, take your credit card or debit card statement for last month (last month's statement for whatever payment methods you use for groceries) and a pen. Circle each entry for a grocery store (e.g. Safeway, Giant, even Target if you buy your groceries there). Add up all the circled amounts. That’s how much you spent on groceries. I know some purchases are things like Windex and garbage bags, don’t worry about those, just add up the total. Make sure to include specialty stores like coops and farmer’s markets.
What’s the total? Is it more than about $250/person for that month? I bet it is. I would say at least 90% of my clients (including my family) come to me spending more than they should on groceries each month.
Why does it happen? Two reasons: 1) lack of planning; and 2) wasting food. A new study tells us that Americans waste about 25% of their groceries, either by thinking it’s past its expiration date or because it actually spoils. That could mean you could be saving a couple hundred dollars by wasting less food.
How do you waste less? Here are my 5 ways to waste less food:
- Know what "sell by," "use by" and "best by" mean. They refer to an item's peak of taste, not when it could make you sick. Sell by dates are not regulated. Great site to check safety dates here.
- Check servings on recipes! Cook enough for the size of your family (more if you eat leftovers).
- Take inventory before you go to the store. You won't buy more tortilla wraps if you know you have them and they are still good.
- Plan ahead. Making a special recipe, company coming, out a few nights this week for work?
- Eat leftovers or upcycle them! – Use main dish pasta as a side dish another night by adding a few vegetables.
If you want help planning, cooking, and figuring out a food budget, sign up for our awesome 30 minutes/$30: How to Spend Less and Eat Better in Less Time WEBINAR on October 8th. Lori Atwood and Jessica Braider (the Balanced Kitchen) will give you tips & tools, money saving ideas, and recipes to help you spend less and eat better at home. When you sign up, we will send you these bonuses:
- Lori and Jessica's Weekly Grocery Checklist
- Lori’s Top 3 Favorite Apps for Groceries
- Jessica’s 4 Favorite 30 minute Meal Recipes
Take-out Can Break Your Monthly Budget: 3 Tips to Cut Your Take-out Tab
There’s been a lot of discussion about whether cooking at home is really worth it given the stress of rushing home to cook, scrambling to the store to have the right ingredients and the opportunity cost of the time to prepare a meal when you could be helping with homework. From a financial perspective the answer is a resounding YES.
The average person spends about $232/month eating meals prepared outside the home and I would argue that if you live in a large city, it’s probably about $300 based on my experience with my clients. That's one person, not a family of 4. Families can spend almost double that. The average meal eaten outside the home costs about $12.75/person and the average meal (dinner) made at home costs about $4.25/person.
You could and should be saving yourself about $8.50/meal/person by eating at home. Over the course of a month, that could be savings of $136-$544 ($544 if you eat 4 dinners/week not prepared at home).
It's hard to deny that cooking is better for you financially (probably nutritionally, too, but that's not my field, it's my colleague Jessica Braider's, MSW, Health Coach). But, it’s just too hard, hectic, and annoying to cook, right. You just hate it, your kids don’t eat anything interesting, and your spouse won’t help clean up. I get it, sometimes you want take-out.
Here are 3 tips for financially optimizing your take-out:
- Take-out lunch not dinner for convenience - one dinner per week outside the home at most.
- For dinner, don’t buy drinks, sides or desserts out. You can probably put together a salad, vegetable, pasta side dish or dessert pretty easily even if you pick up your main dish outside your house.
- As a condition for getting take-out, make your family promise to eat the leftovers Take-out usually provides huge quantities, if you throw it out, it's a total waste of money. Pick take-out that provides enough for two meals (yup, Chinese!)
For more ideas on how to keep your grocery and food budget down each month, track and manage your household finances better, meal plan and make delicious and nutritious 30 minute meals, sign up for Lori Atwood and Jessica Braider’s 30 minutes/$30: How to Spend Less and Eat Better in Less time WEBINAR on Oct.8th.
What if you and your spouse/partner have different spending habits?
Why is there no place on an online dating profile to describe your spending habits? Why do we fall in love with people who are so different than we are about money? I can’t answer these questions, but I can give you a few tips on what to do if you marry someone with vastly different spending habits than you have.
Although this subject deserves a book not a blog post, if you’re the thrifty one, here are things NOT TO DO:
Do not try to change your spouse’s spending habits (yes, I know how hard it is)
- Do not question every purchase your spouse makes (“are those new?”)
- Do not obsessively check MINT or your online account, it won’t change anything
- Do not buy less trying to compensate for his/her over buying (yes, you know you do it)
- Do not get irritable, passive aggressive or resentful and blow up about the dishwasher not being unloaded when really you’re worried about money
- Do not try to make your spouse keep a line by line budget, count purchases or report to you in any other way.
- If you’re the spender, do not tell your spouse to relax, back-off, or leave you alone
None of this will change his/her habits. It will just breed resentment and anger, and ALL you really want (or should want) is to know you’re spending less than you earn each month and saving for the future.
Instead of trying to change your spouse, work with their money habits. Here’s what you should do if you’re in either role (spender or thrifty):
- Figure out the hotspots in your monthly spending where you/your spouse seems to spend or micromange a lot. It’s rarely the electric bill. It’s usually groceries, kid’s activities, clothes, take-out, entertainment or vacations.
- Together, agree monthly (or annual) budgets for those hotspot categories ONLY and divide the budget between you based on who is more involved, i.e. if you go grocery shopping mostly, you should have more of the grocery budget.
- DO NOT ASK HOW THE MONEY IS BEING SPENT as long as both of you are keeping to your allotted amounts for that particular hotspot each month or each year.
- Together, AGREE an amount you want to save each month or put toward debt pay-down or any other goal. Make sure you keep this number in mind when you agree budgets for hotspot categories.
- Do an auto-transfer of the amount you want to save on the first of the month into a savings account, so you know that money is being saved regardless of how spending goes on the rest of the money.
- Let go of worrying about every little expense and think only about what you want to save and making sure you keep to your OVERALL budget for your hotspots.
If you are signed up for my newsletter, I have three videos that will help you figure out what you should be spending each month as a household on full discretionary items. Otherwise, estimate. Good luck!
First Mistake in Salary or Freelance Fee Negotiations
In honor of Labor Day, let’s discuss salaries and pay. Negotiating salaries, project work or freelance pay all have one thing in common besides creating anxiety for most people; they all involve numbers.
The responsibility of naming a value belongs to the person who created the job. What does that mean? NEVER, EVER, EVER, put the first number down. The person offering the job or freelance work should put the first number down.
Remember 2 things:
- People become attached to numbers. It's hard to get them to forget a number or "reset" their understanding of value.
- People also tend to undervalue themselves and that’s what future bosses count on.
When you’re being offered a job, a prospective employer may ask, “how much are you looking for?” in relation to the job being offered. Don’t fall for it. Never put the first number on the table because it is usually lower than what the company is expecting to pay unless you are applying for a job for which you are sorely overqualified.
If you are asked “what salary are you looking for to do this job” or something like that, respond by saying, “You have my salary history. What is the salary you want to pay for this job?”
If you are less experienced than another candidate, the company should adjust the offer accordingly, knowing you may need more training, supervision or time to get up to speed. They may also base it on your salary history, which they can ask you about. There's no reason for them to ask you what "salary you're looking for" except to use it to underpay you.
Asking you what you want for the specific job is a way of getting you to set the base for the negotiation and that’s bad for you whether it’s new job or a consulting or contracting role. If you’re a freelancer or consultant and you’re hired to write an article, do a report or create a website, the company should know what they want to pay for articles, and reports or even web related work.
Do not get pushed into a corner. Most people would undervalue themselves in this case and employers know that. That’s why they ask. Don’t let that happen to you.