Monday, May 19, 2014

Becoming Debt-Free (Part 2): Cutting The Food Budget

This is part 2 of our Debt Elimination journey. If you missed it, you can go back to read Part One.

Mr. LH and I have always been bargain grocery shoppers and we buy in bulk whenever there is a good sale. I even have a small stockpile of things we go through quickly or that have a long shelf life. Coffee, hot sauce, peanut butter and cereal all have special places on shelves in my basement. I also make sure to buy extra toiletries and paper goods whenever they go on sale. Everything from shampoo, toothpaste and soap to toilet paper, razors and feminine products become part of my stockpile. I don't want to not have something when I need it and I definitely don't want to pay full price for it.

I almost always buy generic (unless a brand name item is cheaper). However, there were some store brand products that are so inferior to the name brands. We decided in some cases we could not sacrifice good taste to save a few pennies.

Still, with all our shopping "savviness" (or so we thought), our monthly grocery & toiletry bill for 4 people still topped out at over $500 a month when we started out debt elimination journey. We needed whatever money we could scrounge together to pay off our debts so I wanted to lessen our monthly grocery budget by at least $100. I wasn't sure how to accomplish this and I knew it would mean focusing a LOT of energy toward our food budget, meal planning and shopping habits.


Image courtesy of Ambro / FreeDigitalPhotos.net

We bought a lot of convenience foods: spaghetti sauce, oatmeal packets, cake mix and even snacks for the kids’ lunches, just to name a few. Since we bought those rather cheaply, I began to compare the prices of the finished products from the store to the cost of a made-from-scratch version. Sure, it would take time to make everything, but I enjoy cooking and I had the time.

Sometimes the made-from scratch version turned out to be more expensive (onion soup mix) but simply being able to name all the ingredients and know what they were made the homemade version worth the expense (like organic vs. conventional). I also cut back on how much of those more expensive made-at-home convenience foods were used.

A lot of the tips below are things I knew before we ever started the debt elimination plan but I never really put much effort into researching the absolute best value for my money. Once the debt plan was put into place, I became a very price-conscious consumer. I wanted to squeeze out every extra penny to put towards eliminating our debt and since I had the most control over the food budget, it became my main "project". 




Reduce or Stop Dining Out: 

Our expenses from dining out (as of April 2012) were over $500. If we had kept up at that pace, we would have spent over $2000 for the year just on restaurants. That equaled 4 MONTHS of grocery bills...at the high budget! You read that right...4 MONTHS! It had to stop.

The only way we went out to eat during our debt elimination process was if we had a gift card for a particular restaurant or if someone requested dinner out as part of their birthday gifts (and then it came out of the "gift fund").




Set The Budget:

As of mid April, our monthly grocery spending averaged right around $500. I slashed that number down to $350. This amount would be used for groceries and toiletries.

I took the advice in Dave Ramsey's book about using the envelope system and used CASH ONLY to buy our groceries. At the beginning of the month, I went to the bank and pulled out the entire month's grocery money...$350 (later changed to $400). I put it in an envelope labeled "groceries". I also put all my coupons in the same envelope. I stored the envelope with my monthly food plan.

It felt a little weird to have so much cash in my purse at once so I began to carry only part of it with me to the grocery store.

I wasn't yet ready to jump into once-a-month grocery trips. I was used to shopping every week with the sale paper. Usually I would make a very large grocery trip at the beginning of the month and purchase all the "non-perishables" with several smaller trips every week after that for fresh produce, dairy and meat or seafood. At the end of the month, any extra money went towards paying more of our debt. I always wanted there to be something left over for paying debt.




Plan Your Meals:

I broke down a few of our usual recipes and calculated the cost of each one. It was a lot of work, but really eye-opening. Our spaghetti with meat sauce and garlic bread cost us $5.51. Without the garlic bread, it would only cost us $4. A “cheap” meal of hot dogs and chips would cost us $5.57. I would rather eat the spaghetti.

Many of our homemade dinners cost us $6 or less. Even our homemade pizza came out to $6 for two large cheese-laden pizzas with the works. We decided our pizza could even be made less expensive and just as good if we cut back on the cheese. With Elder Boy out of the house, some of our recipes could be cut in half and would still make more than enough to feed everyone (at least while the "Pickles" were still young). That meant the more expensive recipes (like lasagna) could be made more cheaply - and therefore, more often.

With our list of cheap-o meals, I made a monthly meal plan using as many of those $6 and under meals as possible. We still have leftovers most of the time so one night a week was designated “leftover night”. The kids usually hated leftover night unless there was lasagna or pizza to be had but once it became routine, their grumbling about it lessened.

One week of lunch supplies for the two children came to $10 for a PB&J sandwich, a slice of cheddar, a muffin, grapes or crackers and a bottle of water (we reused the water bottles). $1/day per child is a lot cheaper than school-provided meals.

Once summer vacation started, the "Pickles" ate a lot of ramen noodles for lunch. It was their choice, but I was still happy I spent only 20 cents for lunch on those days.




Shop at Home First:

When I began making the meal plan for the month, I'd start by raiding our pantry and freezer. The first meals of the month were planned around what we had on hand.

It became a challenge to see how long we could go without having to pick up something at the grocery store. We never wound up eating cereal for dinner (though there were many nights I wanted to), but we certainly got more creative with our meals.



Make A List (and STICK TO IT):

Write It All Down. I know if I need something and don't write it on the list, I'll forget it. It doesn't matter if I need 5 things or fifty. I always manage to forget the one thing I didn't write down.

Take all your meal plans for the week (or month) and write all the ingredients for those recipes on a list. Cross out those items you already have at home (just make SURE you have it). Compare your list with the sale papers. If you need to go to more than one store to keep your costs down, do it. You may want to have a cooler in the car to hold cold items from one store while you’re in the other store. I usually go to the store with the fewest cold products first.

Gather the coupons that match items on your list. I usually ONLY bring coupons for items I plan to buy. Having extra coupons just tempts me to buy more. I figure if I don’t have it on my list, I obviously don’t need it.

Shop “Right”: I can’t stress enough how much lower grocery bills seem to be when I
  • shop with a list
  • shop alone (no children)
  • shop with plenty of time available (to compare prices)
  • shop on a full stomach.
During the school year, I make sure to go to the grocery store as soon as the "Pickles" are dropped off at school. I've already eaten breakfast and/or had at least one cup of coffee, I don't have children with me, the store isn't crowded and I'm in no hurry. My shopping list and coupons would have been organized the night before and placed in my purse.




Constantly Compare Prices:

We keep very close watch on prices between competing stores. In NC, we shopped at Walmart regularly for most of our groceries and household items, but we found the regular grocery store would generally have a better deal on meat products. In Colorado, we found that Walmart grocery prices were in line with the grocery store chains and since two grocery stores were only ½ mile away (verses 7 miles for Walmart), it made more sense to just shop at a grocery store (not to mention Walmart shopping trips just stress me out).

Even once you've compared prices between competing stores, the products themselves need to be compared. We have always compared prices per unit (ounce/pound/quart/etc) and in recent years we have noticed stores changing their pricing to make comparison shopping more time consuming (even if you have a calculator handy). One 6 oz bag of dried cranberries will show the per pound price while the 8 oz bag of cranberries will show the “per ounce” price.

We've also noticed that the larger “bulk” sizes are no longer necessarily the better buy. So pay attention and check the prices. If you shop based on the unit price, you'll come out on top.




Image by sdc2027


Coupons:

When we first moved to our rental house Colorado, the previous tenant’s newspaper was still being delivered to the house. I became a crazy coupon clipper. Without having much of a plan, I would clip coupons left and right and use them against already “on-sale” items. I would save as much as 47% off my grocery bill but many of the things I purchased were convenience foods we didn't usually buy so I really wasn't “saving” money. I got so wrapped up in the total grocery amount that when I got home with my haul I realized I had lots of random sale items but hadn't shopped for much in the way of meals for the week.

"Hi, Honey! We only have mac and cheese for dinner but I got a great deal on bleach today!"

That wasn't working too well so I stopped the coupon clipping.

Once we started our debt elimination program, I started using coupons again but I was much more careful with them. I started seeing coupons as cash and I wasn't going to be frivolous with my cash so why would I be with coupons?

I didn't want to wind up buying stuff just because I have a coupon for it (my mistake from my first couponing extravaganza) so now I pass over any coupons for items I wouldn't normally buy. I also learned that my main grocery store will "double" my paper coupons up to a point. With that knowledge, I know that two "50-cents off one" coupons are much more valuable to me than a $1 off 2 coupon.

As for where to get coupons...I started by purchasing my own newspaper subscription for the Sunday and Holiday issues only. Then I signed up for grocery store email and mailing lists that I wasn't already on.

I made sure I had a loyalty card for any grocery stores that offered one. Many grocery stores also have digital coupons that can be loaded onto your loyalty card. They can sometimes take a while to register on the card (from a few minutes up to 24 hours) so it's best to give them plenty of time to show up on your account before you shop.

My main source for coupons is the internet. Coupons can be printed online. I get a lot of them from Coupons.com.  My main grocery store will allow up to 2 "like" internet coupons per transaction but that is also the maximum many places online will allow you to print. Some of those internet coupons can also be downloaded to store loyalty cards. RedPlum.com, P&GEveryday.com and SmartSource.com, some of my printable coupon sources, will also let you load coupons directly to select loyalty cards and then print out a "shopping list" of the coupons associated with each loyalty card. By doing this, I had one eCoupon on each loyalty card and 2 printed paper coupons in hand.

Many times I would be able to use a store coupon with a manufacturer coupon on a sale item and get it for REALLY cheap! It's not extreme couponing, but I have been known to walk out of the store with several bottles of shampoo and multiple packages of toilet paper at once. It's helping to cut down the household budget and I won't have to buy it again until it's on sale again.




Watch Out For The “Sale” Prices:

Just because something is "on sale", doesn't mean it's a deal. I'm reminded of a store in the mall that always, always, ALWAYS has "SALE" signs up everywhere. Everyday was a sale at that store. In reality, nothing was ever on sale in that store.

Don't be fooled into thinking you're saving money on something just because it's on sale. Learn the normal prices of items.

We've noticed that a canister of oatmeal (regularly $4.29), will be on sale the following week for $3.79 showing a “regular” price of $8.49. The inflated numbers just make the sale price sound better. But I could get that same canister of oatmeal for the everyday low price of $3.24 down the street.

Know what the normal "sale" and "regular" prices are for certain foods so you know when you're getting a real deal. Also, have a maximum amount you are willing to pay for certain items (your "trigger price") and don't buy those items until the cost is below that amount.  I won't pay more than 99 cents a pound for chicken leg quarters. I know that once a year I can get them for 79 cents a pound but I don't have the freezer space to store a year's worth of 79 cent chicken. So 99 cents a pound is my "trigger" price for that item.

Coffee prices can skyrocket to $12 or more for a large tub of Folgers. But if you wait until the store offers them on sale for $4.99 and then use your paper or digital coupons on top of that, you stock up and save plenty!

And here again, shop based on the "unit price". My grocery store had a fabulous sale going on, but when I crunched the numbers, I learned I would still be better off purchasing certain items at Costco.




Convenience Foods:

The children could go through an entire box of instant oatmeal packets on a Saturday morning (that’s TEN packets!). But I remember my brother and I eating an entire box of Lucky Charms because we were so thrilled to have it (sugared cereal was a rare thing in my childhood). Still, at $1.68 a box for the generic oatmeal packets from Walmart (the cheapest we could find), the oatmeal eating marathons were getting expensive.


We already made our own tortillas, taco seasoning, baking powder, self-rising flour and laundry detergent before we ever started our debt elimination plan. Now, along with the oatmeal packets, I also made pancake & waffle mix, onion soup mix, enchilada sauce mix, spaghetti sauce (as opposed to canned/jarred spaghetti sauce) and refried beans from scratch.

I also started freezing meals or parts of meals to lessen the prep time for future dinners.

Note: When I can get jarred spaghetti sauce at a low, low price, I'll buy it and doctor it up a bit but most of the time now, I just make a hug batch from scratch and portion it out for the freezer.




Skimp on Portioning:

I always bought ground beef in large packs to portion and freeze for later use. I decided to use a method my mom used when I was growing up and she was trying to stretch the food budget. Instead of portioning the ground beef into 1 lb. portions, I make them 3/4 lb. portions. It never seemed to adversely affect the flavor or the consistency of the recipes. You still get the meat and the flavor, and out of every 3 lbs. of meat, you get four portions. Anything less than ¾ lb. seemed to not turn out very well.

I could also stretch boneless chicken breasts if I diced or shredded them rather than serve them whole. I would use 4 chicken breasts in a meal if I cooked and served them whole. If I chopped them up, I could use only 1 or 2 chicken breasts and put them in stir-fry or pasta. They added flavor, they were the token “meat”, and we never missed those 2 other chicken breasts.

Also, chicken leg quarters were great for boiling, de-boning and packaging in 1 lb portions. The broth was also jarred and frozen for use in anything that called for chicken stock. This made quick work out of making a pot of chicken stew on a winter's day.



For a while, I loathed going to the grocery store because it meant spending money. Our budget for food and toiletries still sits right around $400 a month but with most of the work done (meal plans, price comparisons, etc), I enjoy the shopping more now.

We're still learning new ways to save money on our groceries, too. Our recipes, our diets, and our preferences keep changing.

It's a process that continues to evolve but every little win you make with your food budget will take you closer to getting out of debt. Use these tips and learn what works best for you and your family. You'll be able to take control of your food budget and succeed in eliminating debt.




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