Cut Grocery Spending Costs and Saving Big

Posted in Spending by Kevin | Tags: , , ,

Grocery spending can be one of the biggest financial burder on a family. An average family of four spends approximately $6,280 annually on groceries. This translates to a whopping $121 a week.  Even with the current economic condition, food prices have not budged. Market analysts predict that it takes about 3 quarters (9 months) for food prices to change based on market conditions. That means we can still expect to wait 4 or 5 more months until a substantial price decrease is seen.  By following the steps below, you can expect to reduce your grocery spending costs by about 15%, almost $900 in annual savings in an average household.

1. Know what you NEED.

Many people have a hard time separating their needs from their wants. Before you decide to go to a grocery store, take a quick inventory of what you have on hand. Check your cans and freezer. Ultimately, some of the stocked away food can be used to concoct something quite delicious with the right amount of effort. Don’t buy things that you already have just because the price is low. Sure, you might be spending less than other buyers, but that is still money coming out of your pocket.

2. Know what gets EATEN.

One of the most common mistakes I see people doing all the time is buying things that they will never eat. For example,  I had a friend that would always buy pounds of bananas (claiming that the sale price of 39 cents a pound was hard to overlook) and stowing it away until they turned brown. I never saw him eat a banana. Buy knowing what gets eaten, not only will you be saving money as you will be buying food that you regularly buy and know the price fluctuations of, you will also be wasting less and pocketing more.

3. Create a workable WEEKLY budget.

I have seen many websites tell you to make monthly budgets, but I truely believe that monthly budgets are very hard to follow as predicting your spending over a long period of time for something that you shop for quite often is pretty difficult. Also, most people tend to get paid  biweekly and not monthly and could face shortages if they are not careful. I recommend you dedicate no more than 12% of your monthly income to groceries. For a family making a total of $70,000 a year, that would be about a weekly budget of $182. Divide that into 7 and you have about $25 dollars a day on food. This might seem like a small amount to you, but I guarantee that if you budget that much money per week, you will have money leftover.

4. Plan your weekly spending based on grocery specials.

It’s not a secret anymore that coupons are the best way to save money on groceries. Yet, of the over $70 billion of coupon saving offered by manufacturers each year, only $4.5 billion are redeemed by consumers. That’s barely 6%. Now, think of all those weekly specials you get in the mail and how you could put them to use. Don’t think of it as a waste of time, this doesn’t require any special attention and you could easily do it while watching your favorite TV show (during the commercials- 20 minutes per hour on average).

5. If the price is right, buy EXTRA.
Studies suggest that most of the BIGGEST savers buy not when they need something, but when the price is very low on something that they will need. Note my second step above, alhough you are buying these goods possibly at a time when you have them some already, you know this is something that is always in high demand and by buying early on sale, you save quite a lot of money (and time) .

6. Eat before you begin to shop.

Eat before you shop. One of the most well known facts on how to save on food. You walk into your local grocery store and the smell of fresh deli beats your self control. For example, my grocery store has a deli and bakery (fresh bread, oh so tempting) and it’s so very tempting to go astray when you’re hungry.

7. Buy store brands or generics and use the store’s loyalty card

Buying grocery store brand products will save you tons of cash. Industry sales research cited by the Private Label Manufacturers Association (PLMA) shows that American shoppers save about $15.8 billion annually by choosing store brands over name brands (think CVS, Walmart). The difference in prices is what the PLMA calls the “marketing tax” which you pay extra so that name brand manufacturers can promote their products through advertising.  The quality is the same, if not better. However, many store brand items are produced by the same manufacturers that make competing name brand items. You can save a lot of money by choosing to not pay this “marketing tax” and keep that money where it belongs – in your pocket!

8.Use coupons for additional savings!

I don’t think I need to elaborate on this one. In one of my next posts, I will submit 50 grocery store coupons that you can use to save more money.

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