I have often been amazed at how this topic evokes a range of emotions from folks. When this question is asked, the reactions range from ‘there is no need to be stingy on the food we eat’ to ‘I am clipping coupons to get every possible deal’! 🙂 My readers know by now that I never tell people what choices they need to make or prescribe anything to them. What I always like to do is to provide a framework on how to think of this question along with some simple tips along the way.
With that said, let’s start with the first think to think about when you start thinking of how to save money on groceries –
Begin with the end in mind – how many calories per day do each of us need?
This is not a health blog or I do not claim to be an expert in health and nutrition. But the first question you ought to ask before you go into thinking through tactics of clipping coupons or whatever, is what is your end goal? For most people, the end goal would be to want to eat a healthy, balanced meal every day a few times a day. The average adult needs around 2000 calories with a mix of the basic macro nutrients (carbohydrates, fats and protein). If you are on a special diet, you might need a different set of calories. So why am I talking about this? Because this really should inform you on what you need to be eating every day and buying at the grocery store. Everything you buy at the grocery store has to be ideally determined by the number and type of calories you and your family actually need. I would strongly encourage you to go to USDA’s website https://www.myplate.gov/ to get a better understanding of this. At first, this likely sounds geeky and even painful. But take the time to do the exercise and actually put this down on paper. The fundamental reason I say this is because of what I want to explain next.
Buy only what you need at the grocery store
One of the biggest aspects of the majority of people’s grocery bills is the food that they don’t end up consuming. What I mean by that is that we end up buying things that simply end up in the pantry as something we thought we would consume but never did. I read that a shocking 40% of the food in America is wasted (source: www.feedingamerica.org). Go and take a look at your refrigerator and pantry and see what food items are in there that havent been used/consumed in months? You may be amazed at this.
If you know ahead of time roughly what you plan to cook in a week (you don’t have to get as detailed as making a daily meal plan but if you do that’s great.), you can decide to buy a core set of groceries including your vegetables, fruits, choice of protein etc. I am not suggesting you survive on rice and beans or ramen noodles. You can decide to buy whatever you need that you deem necessary for a nutritious meal.
Sometimes people suggest going with a shopping list so you are clear on what you want to buy instead of making impulse purchases at the store. When I first started trying to get conscious about what I was buying, I made lists – that definitely helped me. Now, I no longer need a list. I walk into the stores and I know exactly what I need to buy. I used to joke that Costco (a big box retail store in the US) was a $100 store (and lately I feel like its more of a $200 store) – meaning, you cannot walk out of the store without buying at least $100 – $200 worth of stuff from the store. Of course, you end up buying in bulk in stores like Costco so you spend more but I also realized how much I was buying that I did not truly need.
Pick private label (mostly relevant in the US)
If you want to move the needle on your monthly groceries expenses, the one thing you are going to have to really pivot toward is buying private label vs the branded groceries. Why is that? Well, the reality is that the big brands spend millions of dollars each year to build brand preferences in all our minds and that costs money which they pass along to the consumer in the prices. Private label products don’t do that. In a cynical sort of way, they leech onto the brands on the store shelves by being placed next to the big brands. If you have misgivings about this and don’t want to buy private-label, that’s fine. But know that, this will single handedly help reduce your grocery bills. Let me also assure you that private label being cheaper does not always equate to lower quality. It might be different in taste but most often they are similar and they all have to adhere to the minimum quality standards set out by the FDA (Food and Drug Administration) in the US.
We started shopping at ALDI, a German owned discount supermarket chain a few years back, here in the US. Almost everything in ALDI is a private-label product. I have comparison-shopped different grocery items between ALDI, Walmart, Target, Costco and a few others. In general, I have found the best deals at ALDI. I was a bit concerned initially wondering if the quality was going to be poor. But as I dug into it, I was pleasantly surprised to see the high quality standards. There are different reasons why ALDI maintains a low cost structure but compromising on the quality of the food is not one of them. And no, this is not an ad for ALDI 🙂 – you can replace ALDI with any private label.
Stick to fresh foods and less processed foods
Now this is sounding more like a health blog :). This is one of those suggestions that have a double impact – health and wallet benefits. The more fresh foods you buy and cook, the more healthy they are, and the less expensive. Pre-packaged, processed foods tend to be less healthy and of course, more expensive. Now, everyone has their limits on this – so you just need to pick yours. Just being more aware of this can help.
So what is the ideal amount I should be spending on groceries?
I did not know there was a number for this but there is actually some guidance on this from the USDA (US Department of Agriculture). They update it every month based on inflation (thank god for that!). The USDA health plan classifies a healthy diet based on four cost levels – thrifty, low, moderate and liberal food plan. It’s actually interesting to see and I would strongly encourage you to go through this. You can find the details on this link:https://www.fns.usda.gov/cnpp/usda-food-plans-cost-food-reports-monthly-reports . You can calculate this based on the number of individuals by age in your family.
Concluding comments
This article focuses exclusively on saving money at the grocery store. One obvious part that I have not talked about is the cost of eating out. While there is not much to talk about on that topic, all I can say is the obvious – the less you eat out, the more healthy you become and the more money you save. How often you want to eat out is often a personal choice.
Thank you for reading. I wish you success on your financial and healthy well-being!
Disclaimer: I am not a financial advisor and all the information in my articles are from my personal experience and are for informational and educational purposes only. Please consult with a financial advisor or CPA for professional advice.
