Here Are the States Whose Residents Are Really Best at Managing Their Money
As recently reported by CreditCards.com, the state whose residents are best at managing their money...
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On average, food is the third largest expense for families, behind housing and transportation. Given how big of an expense it is, and how easily we can control this expense I have decided to dedicate more time discussing our food budget.
I recently wrote about how food delivery and meal kits are wreaking havoc on our personal finances. As a quick recap, ordering food using services like Uber Eats costs 5 times more per meal than cooking at home and ordering food from a meal kit costs 3 times more than cooking at home.
Now that we are all in agreement that you need to buy and cook your own food, let’s focus on how you can do that in the most cost-efficient way possible. To do that, I will share some tips from Erin Chase I recently heard in an interview. Erin is the creator of $5 Dinner and the Queen of cutting down grocery bills.
PUBLIC SERVICE ANNOUNCEMENT: Before we jump into tips and tricks of how to slash your grocery bill, I have two quick questions for you.
If the answer to either of these questions is “I don’t know”, stop what you are doing and set up a budget. To set up a realistic budget, you need to be tracking your spending, including what you typically spend on groceries. There are tons of apps out there to help you track your money, the most popular these days is Mint.
In a recent interview, Erin said that she used to spend about $500 per month on groceries for herself, her husband and 2 young children. She was able to cut that in half to $250 per month.
I’ve written in the past that cutting seemingly small expenses (like that pumpkin spice latte) out of your budget can have huge benefits to your long-term wealth.
Let’s quickly calculate the impact of $250 per month so we know the Opportunity Cost of NOT making any attempt to reduce your grocery bill.
$250 per month is equal to about $3,000 per year. If you took that $3,000 per year and invested it an asset that gave you an average of 7% return, over the next 30 years you would have created $300,000 in additional wealth.
The point? Seemingly small savings can add up to big-time dollars over the course of a life.
Have a plan before you go into the grocery store, don’t aimlessly drift through the isles. grocery stores are not dumb… the whole design of the store is to trap you and make you spend more money than you planned.
First thing is first if you want to cut down your grocery bill you need to have a plan before you walk into the store. Grocery stores are designed to suck you further into the store and spend as much money as possible. The longer you are in the store, the more money you are likely to spend. You need to know exactly what you are buying and how much each item costs before you enter the store. If you are drifting aimlessly through the isles, you will end up walking out of there with a bunch of stuff you did not plan on buying.
Erin recommends investing 20 minutes every week to find out what food is on sale and then plan your meals for the week around those sale items. If chicken and steak are on sale, plan the bulk of your meals around that (if you eat chicken and steak). Yes, not only do you need a grocery list, you need a clear plan of how you will turn that food into meals.
According to recent research, the average American family throws out $2,000 worth of food per year. We need to shift out mindset and think of food as a resource because it is!
Next time you throw out a container of blueberries that’s gone bad don’t think “I just threw out a container of blueberries”. Instead, you should say to your self “I just threw $5 into the garbage”.
If you can, buy in bulk. It will often bring down the “per serving cost” of food… Hello Costco!
I had no idea until I heard Erin mention it, but most of the major grocery store chains have their own store-specific app. I was still under the belief that finding coupons and grocery sales meant cutting coupons out of the newspaper. Go ahead and download the app for the grocery stores in your neighborhood it is a treasure-trove of helpful information on sales and discount coupons.
In addition to the grocery store specific apps, there are tons of 3rd party websites and apps like coupons.com where you can find tons of sales and coupons. The smart thing to do is find out what is on sale or what you can find a coupon for and make a meal plan around these items before you enter the grocery store.
CAUTION: Don’t buy things ONLY because you found a coupon for it. If you can’t work it into a predetermined meal plan, don’t buy it. 80% off brussel sprouts is not a good deal if you let them spoil.
There are also really awesome “post-purchase” apps like Checkout 51 that provide cash back “after” you bought all your items. The general idea is you buy your groceries, you scan your receipt and find out which (if any) items you are eligible for a cash back rebate for. I had no idea this existed, but it is an incredible opportunity to get some free money. Erin’s pro tip is to scan your receipt before you leave the parking lot. Once you get home, life tends to get in the way, and you may forget or lose the receipt (especially if you have kids).
If this is starting to seem like a lot of effort, you’re right, it is. There will be plenty of days where you say, “I don’t feel like putting in the work”. So how can we make sure we stay the course and keep those grocery bills down? Erin’s suggestion which I wholeheartedly endorse is having a plan for what you’ll do with the money you save.
For me, every penny I save on my grocery bills I throw into low-cost Index Funds. This makes it real for me, I can see how much my wealth is increasing because I had the discipline to plan out my groceries and meal plans.
What would you want to use the money for, saving for that family vacation? Saving for Christmas for the kids or college for the kids? Pay down debt? Whatever would give you the most amount of happiness or reduce the most amount of stress, use your grocery savings for that. If what will give you the most satisfaction is paying off that credit card debt, the next time you don’t feel like planning out your meals based on what’s on sale, think about how good it will feel to be debt free.
Hi, my name is Ben. I am the founder of Making of a Millionaire. I have been obsessed with personal finance and learning how to manage money, ever since my parents declared bankruptcy and lost the family home to foreclosure in 2010.
I spent the next 10 years continuing my journey of educating myself about money. This education was both formal and informal.
On formal education, I earned a Bachelor’s and a Master’s degree in Finance & Economics.
On the informal side, I consumed every book, video, blog post, and podcast that discussed personal finance.
Education was nice, but it wasn’t until I began implementing what I learned that I began feeling more hopeful about the future.
Before long, I had paid off my first loan. Then the next. By 2015 I was debt-free. By 2016 my wife and I bought our first house. Then we started investing. We bought another house and began building real wealth.
As our wealth grew, the memories of that family bankruptcy seemed further and further in the rear-view mirror. My stress and anxiety began to melt away and I was able to sleep at night without my mind racing and problem-solving.
By 2018 I knew it was time to start sharing what I learned about managing money and Making of a Millionaire was born.
I hope you find the articles, videos, and courses created by Making of a Millionaire to be of value to you. Please feel free to reach out to me directly if you ever have feedback or questions.
You can read all of my articles on my personal site, or on Medium. If you’re interested in video-based personal finance tutorials and education, you can Subscribe to my YouTube channel or check out my in-depth personal finance course.
Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.