This is part of the Saving Money on Groceries series.
The first step in saving money on groceries is developing a budget. Most people don’t have one. Or if they do, they have a hard time tracking to it. We’re in the latter category, although we’re getting better. I’ll keep the budget discussion to groceries, but if anyone is interested in general budgeting, let me know. My husband has some great resources and tools he developed that have helped others as well.
As for groceries, here’s what we did:
1. Make an educated guess. First, we guessed how much we would spend on groceries in a month. Yup. We totally guessed. That allowed us to start tracking what we spent from that moment on (saving all our receipts as we went) to see if our number was accurate. Decide on a place – a drawer, a folder, an envelope, wherever – to store your receipts and only put them there. You can eventually write down your target spending limit and tracking numbers in the same place. If you’re like us, that will be harder than it sounds, but it helps immensely.
2. Develop a more accurate budget based on history. In the meantime, start going through your paper or online bank records and reconstructing the history of your grocery spending for the last three months. By “groceries”, I am including anything I buy at a grocery store unless I make a rare and high price purchase (clothing, electronics, printer paper, etc) that isn’t really a grocery or frequently purchased household item. This happens more at Costco, but even there, not often. Based on that history, come up with a number you can use instead of your first guess as a new grocery budget.
3. Continue tracking to the budget. Save your receipts and try not to go over your budget for the month. You will start noticing areas where you spend more money than you thought. You’ll learn to get creative with what you have on hand or coming up with frugal menu alternatives as you get later in the month. You will have also likely noticed any excessive “eating out” habits, including those trips to Starbucks or (if you have better taste) Dutch Bros. If you desire, you can start this same process on an “eating out” budget as well. You’ll want to do that soon anyway.
4. Start cutting back on spending. Think of ways you can cut back on your grocery spending and give them a shot! Read books and online articles about how to save in different areas. It may be by cooking more from scratch, growing and/or canning food, shopping at Winco or other low-cost places, using coupons. I’ll post a lot more on these and other strategies later. As you lower your spending, figure out where to put the saved money: savings, bills, or special purchases that will help you save even more (canning supplies, Sunday paper subscription, garden beds, etc.).
5. Just keep on keeping on. Keep recording your spending. Notice your habits. Identify more areas for potential spending. See how your savings experiments pay off (and if they don’t, tweak the strategy or toss it and try something else.)
– Don’t try to change everything at once. Trust me, it’s unlikely to be successful. You may start out by simply writing a grocery list and only sticking to that list while shopping!
– Don’t discount different strategies altogether. You may not be ready for it now or it may not fit your family lifestyle at the moment, but perhaps later it will! Keep your eyes and ears open to different possible strategies, but bite off only what you can chew right now.
– You WILL see progress if you stick to it. It sounds like a lot of work now, but it will get easier and more like second nature as you gain experience.
– If things kind of fall apart, just get back on the horse! We moved a few months ago and, unfortunately, ended up ignoring our budget and not using a lot of our basic savings strategies. We’ve had to just work ourselves back into it.
– If you find it hard to complete the month in budget because you get kind of lazy about it toward the end (I have this problem) try this: At the beginning of the month, withdraw cash in the amount of your grocery budget, or a part of it each week if all at once is too much, and put it in an envelope you keep at home. Don’t use a card at the store – only allow yourself to use cash from the envelope. Not convenient, but can be used temporarily as an effective way to keep your mind on the goal and control impulse buying.
Next post: Frugal Shopping.