Most everyone has felt the effects of rising food prices, while shopping at the grocery store and dining out at restaurants. In 2022 alone, the price of food rose a whopping 9.9%, leaving a profound impact on our budgets.
Similarly, you may have also noticed the effects of shrinkflation, the phenomenon of paying the same price while receiving less product. This most commonly occurs with packaged snacks, bread, pastries, frozen foods, and meat.
While you may have seen a slight relief from inflation in other budget ategories over the past several months, inflated grocery store items have not yet caught a break. Low-income households and senior citizens, among others, often feel the financial pain of inflated food prices more heavily because they tend to spend a higher percentage of their income on food.
As such, we are providing you with tips and tricks, so that you stay grounded in your financial journey — in good and bad times.
Creating a Grocery Budget
You may be wondering how much you should even be spending on groceries. Your family size, age of family members, dietary restrictions and needs, and where you live are all factors that play into your grocery budget.
However, there are a few financial guidelines to help you as you set out to determine your family’s ideal grocery budget.
- Consider your other essential categories. In general, you want your budget essentials (housing, utilities, clothing, insurance, food, etc.) to be about 50% of your total monthly after-tax income. Add up your other essentials and see how much room there is for groceries. Remember, this is essential grocery store trips, not special treats or restaurant spending (that can go in another category).
- Look at what the USDA recommends. The U.S. Department of Agriculture puts out an updated food budget every month based on national average food prices. They provide information for four different plans:
It’s up to you to determine which plan you’d like to strive for. The latest report at the time of writing is for July 2023 and can be found here. Your grocery budget should strike a balance between being intentional and sustainable.
Dining at Home Benefits
Where you choose to eat the majority of your meals can have a tremendous impact on how much you end up spending on food. While restaurants are certainly enjoyable and convenient, eating at home comes with a tremendous amount of benefits including:
- You can confidently know all of the ingredients in your food. This is especially important for those with food allergies and sensitivities.
- Smaller portion sizes. This can help you maintain a healthy weight and create more mindful eating habits.
- There’s less chance you’ll let food go to waste. You’ve already spent the money on the food you have at home, so you want to make sure it doesn’t go to waste.
- You may practice better sustainability habits. Take-out containers often come with single-use packaging, increasing your carbon footprint.
- You can gain back more time in your day. While it might seem like eating at a restaurant is quicker, it can often take longer to drive, find parking, wait for a table, food, and the check, and drive back home. Plus, when you meal prep at home, you can prepare multiple meals at once.
- You can feed a crowd for much less. If you want to celebrate a birthday or other special occasion with multiple people and want to cover the tab, cooking a large meal is much more affordable than picking up the check. There are tons of recipes online for satisfying home-cooked meals for a crowd.
- You can increase your culinary skills. The more you practice preparing healthy and delicious meals, the more your confidence in the kitchen will increase, making you more inclined to choose eating at home over restaurants.
- The more you eat at home, the cheaper it becomes. Suppose you simply compare the cost of making one chicken sandwich at home to one you can pick up from a fast food window. In that case, you’ll probably find it cheaper to buy a single sandwich—considering most food at the grocery store comes in packages with multiple items. However, if you use up the entire chicken package, bun package, and sauce container, the cost per sandwich will drastically decrease.
5 Tips on Saving Money While Grocery Shopping
Saving money at the grocery store might seem like an impossible task, but with a little preparation, you’ll be able to save in places you may not have thought about before. Check out these five tips before your next grocery shopping trip!
- Create your culinary strategy.
- Embrace new meals and ingredients.
- Be a savvy bulk shopper.
- Unlock savings with sales and coupons.
- Get creative!
1. Create your culinary strategy.
Just like your financial strategy includes a plan for budgeting, investing, paying off debt, and managing your monthly cash flow, your grocery budget can have a culinary strategy! Like any good strategy, there’s a stage for planning/preparation, execution, and maintenance.
- Planning and preparing. Before you create your regular meal plan, inventory all of the food you currently have in your refrigerator, freezer, and cabinet. This ensures that you’re not letting food go to waste and that you’re not buying unnecessary items.
Based on the items you already have and what your family enjoys, create a meal plan! This doesn’t have to be an elaborate plan with three-course meals, aim for simple, nutritious, and easy. Some families like to plan out their meals one week in advance, while others write out a whole month. Choose whichever sounds more doable to you.
Next, plan which grocery stores you’d like to utilize. While it’s not always convenient to shop at multiple grocery stores, it can pay to comparison shop and choose two or three go-to grocery stores that you know have budget-friendly products.
- Execution. Before you head out, make sure you have your shopping list and your grocery budget. Commit to only buying what you need and as you add items to your cart, keep a running tally of the total so you’re not surprised at the checkout counter.
Sometimes it can be helpful and more cost-effective to order your groceries ahead and pick them up at curbside. This helps you avoid temptations, but you’ll want to also consider the surcharges. When you get home from shopping, try to wash and preserve your fruits and vegetables in glass containers so they last longer.
- After a month or two of being intentional about inventorying your existing food, budgeting, meal planning, and grocery shopping, evaluate your progress. Consider what’s been going well and what could use improvement. The key to maintaining a successful grocery budget is to have sustainable habits.
2. Embrace new meals and ingredients.
It can be challenging to step outside of your comfort zone and embrace new meals, ingredients, and even grocery stores. But sometimes the places we’ve always shopped or the meals we’ve always eaten aren’t the most budget-friendly.
Consider trying generic products (versus name-brand products). The quality may not always line up, but it certainly can in many categories and is worth a try to save money.
You can also try recreating your favorite meals (and even snacks) with a little bit of planning! Often, you can make a batch of your favorite snack (like granola) with healthier ingredients and less money per serving. Shopping seasonally can also help you save money and access the freshest ingredients.
3. Be a savvy bulk shopper.
Bulk shopping can be an excellent way to save money, especially if you have a large family. But not everything at warehouse stores is a better deal. It’s important to compare “cost per unit” when considering buying in bulk versus regular sizes — you can typically find this on the price sign in small writing. You also want to ensure the entire product will be eaten before the expiration date and that you’re factoring in any membership costs to your grocery savings.
Some of the best items to buy in bulk are baking ingredients, spices, canned food, paper products, pasta, meat, cooking oil, diapers, and cleaning supplies. If you have the space to store it, this can be a great way to lower your monthly spending.
Your creativity will also come in handy when bulk shopping. Using items, such as a large package of fresh chicken, for multiple meals can help you take advantage of the bulk pricing without wasting food. You can also learn to make freezer meals!
4. Unlock savings with sales and coupons.
Coupon shopping isn’t necessarily what it used to be. Today, many stores have digital apps where you can see both their weekly ads and their digital coupons. Before your shopping day, peruse the store’s coupons to see if there is anything you typically buy. If you weren’t planning on buying the item, then coupons are not a good deal.
While you’re at the store, check to see if there are any manager’s specials or clearance items. This is particularly helpful when looking at meats or other higher-priced items because you can sometimes receive deep discounts (and you can always freeze the meat for later!). You can often find these deals in the morning when stores are trying to get rid of their almost-expired products.
Understanding the grocery store sales cycles will also help you save. For example, after a major holiday, most stores want to purge their seasonal items. With a little strategic planning and forethought, you can score great deals on items just by waiting until the day after a holiday or major event.
Using a cash-back credit card is also a great way to maximize your grocery store savings. You can receive a percentage of your grocery bill back each month just by using your credit card.
5. Get creative!
Sometimes we just need a little inspiration to unlock the power of saving money at the grocery store. By switching up a few of your routines and habits, you can find creative ways to cut down your spending. Try these unique tips the next time you head to the store.
- Try cheaper sources of protein such as lentils, beans, eggs, or different kinds of nut butter.
- If you typically have meat every night, try to go meatless once per week! You’ll likely increase your vegetable consumption and save money.
- Try buying your favorite cheese in a block and shred it yourself.
- Stay on the perimeter of the store—this is where produce, meat, and dairy typically are. Packaged foods are typically in the middle and more expensive.
- Shopping by yourself can also help you save money because there will be fewer people in your group tempted by impulse purchases.
- Buying pre-cut fruit and vegetables is certainly convenient, but by skipping the packaged produce and prepping it yourself, you can save tons of money. Frozen produce can also be cheaper and you won’t have the risk of it spoiling quickly.
Solidify Your Finances with Lafayette Federal
Learning simple tricks and tips can help you navigate your finances successfully. One of the best ways to increase your financial literacy is to partner with your credit union. At Lafayette Federal Credit Union, we dedicate our time and resources to provide our members with practical and helpful information.
On our Financial Literacy page, we offer the tools and resources to help you with your savings — and beyond! You’ll find out how to manage financial anxiety, access the financial products you need to be successful, how to manage your credit cards, and more!