In an economy that has seen heavy job losses, pay freezes, high unemployment, and a host of other economic stressors, I found it particularly strange to listen to my friend at lunch today proudly announce to the office lunch group assembled that she only eats organic food and does all of her grocery shopping at Whole Foods. Anything less she declared, was simply uncivilized! Needless to say I slunk into my chair for fear of being exposed as the Piggly Wiggly shopping, discount brand purchasing, plastic bag using Philistine that I am.
But then again, my coworker Tammi is 28, lives with her cat Snookie (yes, she hasn’t completed a project on time in three years but does manage to catch every episode of The Jersey Shore), dates a guy who still frosts his hair in an homage to his fallen boy band comrades, and in general seems to spend her time and money in an unending pursuit of fickle fashionability. Organic groceries, Whole Foods, and The Jersey Shore … Pardon me Mrs Bill Gates with the 1993 Honda Accord and the free rental agreement in mom and dad’s luxury basement.
But it made me think – why are we (the Tammi in all of us) so drawn to fashionable trends that are financially stupid? Trends like organic food. Deep down are we all such insecure high school students looking for acceptance in a reusable recylced plastic bag courtesy of Cheryl Crow and a $4/lb bag of carrots raised free from pesticides and picked by the hands of the worlds most skilled Oompa-Loompas that we are willing to forego all financial common sense for the sake of cool?
Not me. I’m uncool. Nope, there’s not even a “I want to be cool without actually looking like I’m trying to be cool” bone left in my body. Those days are gone.
But while I forego the platitudes and praise that organic foods and ‘exercise’ shoes with oddly shaped, I do focus on my own set of cool. Cool to me is spending less than I make, retiring early, not carry balances on credit cards, and buying food off the bottom shelf at Aldi and Costco. Yes dear reader, that’s how I roll.
And if you too are looking to manage a finanically fit household, a household that stress the coolness of stretching its dollars and getting the most out of its finances in both bad AND good economic times, here are a few thoughts.
One of the ‘low hanging fruit’ (hey, it’s a post about groceries) areas where our dollars can be stretched further is the monthly grocery budget. In fact, according to the US Bureau of Labor Statistics (BLS)*, in 2009 the average American household spent 12.4% of its expendable income on a food (a decrease from 15% in 1984). To put this into further perspective lets look at a couple of other numbers from this same survey:
- 7% of our food expenditure is “food at home”, the other 5.4% is “food away from home”
- Average annual expenditures for 2.5 unit household – $49,638
- Average income before taxes – $63,091
How do these compare to the numbers in your household?
I think many of us are starting to recognize the need to get even more out of that 12.4% – especially those of you with families above the BLS’ household unit of 2.5 persons. And while discount grocery outlets like Costco and Aldi (as I mentioned above, both long time favorites of mine) aren’t the pretties girls at the dance, they do put out … financially speaking.
So what should you do? Unless you have your house paid off already and no credit card debt, how about trying something different. Here are some suggestions:
1) Try to cut your grocery/restaurant expenditures by 20% this month. Regardless of what you currently spend on groceries each month (food at home AND food away from home), reduce the amount you are currently spending by 20% (note: this is probably most easily accomplished by cutting your expenditures in the “food away from home” category).
2) Consider shopping at Aldi, Costco or another discount grocery store in your area. Can you really tell the difference between the $8/lb all natural grass fed beef and the $3/lb ground chuck? If so, stop reading this blog right now and immediately submit your test video for next year’s season of Top Chef.
3) Make a grocery list. I know … this sounds silly but having a list (and sticking to it) can help avoid those expensive impulse buys and even better, gets you in and out of the store quicker.
4) Buy Generic – regardless of where you shop. Your health insurers will encourage you to purchase generic medicine and for good reason – it’s just as effective as the name brand stuff at a fraction of the price. The same holds true for your food – it’s usually the exact same product (you’re just paying a premium on your food to cover an advertising budget)
5) Coupons are cool – Ok, not as cool as my coworker Tammi. But nonetheless, seek them out and use them (but only if they are for items actually on your grocery list). Buying something you don’t need at a discount is NOT a good deal. Be sure to check out all the online coupon options that are available.
But why write a post on something as apparently trivial as grocery shopping? Because we all do it, we all spend a considerable portion of our expendable income on it, and we could all stretch our grocery dollars further with a little thought and minimal effort.
And wouldn’t you prefer to redirect these savings towards paying off a nagging credit card, establishing your emergency fund, or increasing your monthly 401K contribution a percentage point or two? I still remember how excited I was when I first started to really pay attention to my monthly food budget – in the first month alone I reduced my spending (for a family of four) by just over 30%! In addition to the financial savings, our meals and diets actually improved. We were eating healthier and spending more time together as a family cooking instead of ordering out. Sure we ate out less, but our lives (and pockets) were fuller. And isn’t that a precious though?
So what are your strategies when it comes to controlling your monthly food related expenses? Are you a holier than though apostle of the church of organic food or a low life, dollar stretching, discount grocery shopper like me?