Friday, October 26, 2007

Reducing the Grocery Budget - Part One

Throughout my grocery challenge, many of you have made comments such as "I don't know how you do it". So, I thought I'd do a series of posts outlining the "hows" of how I got to where I am with our grocery spending.

So, where do we start? I think the very first step is to believe that you CAN do this. One thing I really struggle with is people saying they desperately *need* to reduce their grocery spending but they've done ALL they can to do so. It's as low as it will go. I am yet to meet someone who actually *has* gone as low as they *could* go. I'm not talking here about people who are content with their level of grocery spending. That's fine. I *could* make ours lower. I'm well aware of that. Right now I am happy with our level of spending. For $100 a week we eat well with a wide variety of healthy foods as well as a few treats.

I have learnt a LOT in the past 3 years. Sure, finding new ways to reduce our grocery spending has slowed down a lot in recent times in comparison to when I first started. But, I am still learning new things. I don't actively seek new ideas quite the same anymore. But, I am open to the fact that there are ideas out there that I don't know about yet. There is *always* more to learn. If you have it in your mind that you've "arrived" as far as grocery budgets go - you're less likely to find those new ideas and miss opportunities to make the $$ stretch further.

So, your mind is now open to new ideas. Good. You believe you CAN do this. Excellent. LOL. What's the next step? Do you know how much you currently spend on groceries? I'm not talking "oh yeah, we budget around $200 a week" type knowledge here. I'm talking, last week I spent $123.62 at Woolworths, $25.00 at the Fruit and Veg shop, $6.35 at the corner store and $2.50 at the Petrol station. That kind of knowledge. (Those figures are completely made up by the way.)

Some people think that they are better off not knowing. Well, knowledge is a VERY powerful thing. When I first started on this "frugality" journey, we budgetted $140 a week for groceries. That was a GREAT budget. In fact, that was already lower than what most of our friends budgetted (those that budgetted). But I have NO IDEA what we were actually spending. The budget was completely useless. It didn't *tell* me anything. It wasn't really great at all. :-)

According to the above figures, "I" have spent $157.47 for the week on groceries. Some people would get to the end of the week and say "I spent about $120 on groceries this week". Going only on the approximate figure they spent at Woolworths. Already they've *lost* $37.47 of their money. That alone is $1948.44 a year!!!! Can you see what I'm getting at here?

If you have the time, I'd encourage you to take this one step further. Sit down with all your receipts for the week and break things down into categories.

Here are the categories that I started with:

* Treats - very important. You need to know how much of your money is going on "non nutritious" food. I think it's *very* important (unless you do want to get down to a bare bones level of spending) to allocate at least a small portion of money to treats. It helps with the whole deprivation/poverty mentality issue that often makes you spend more money rather than less. What do you include as treat items? Well, that's up to you. I tend to include cordial, ice cream, chips, lollies/chocolate, desserts (that are non fruit) and sweet biscuits in mine.

* Fruit and Veg - When you start trying to cut your grocery budget, it can be tempting to skimp on fresh fruit and veg. I find it helpful to keep a separate category so that I can keep an eye on this. I've also heard it said a LOT of times that it's more expensive to eat healthily. I guess that all depends on what you were buying before but so far I haven't found this to be the case myself. Having it there in front of you what you actually *do* spend on fruit and veg is a good way to see what is happening. I also include frozen vegetables and tinned fruit and veg in this category (so things like tinned peaches, beetroot and so on).

* Meat - I no longer keep my meat spending separate from my general grocery spending. But when I was first starting out I did. Mainly because meat is one area where most people *can* cut back on their grocery spending. I know we were consuming way too much meat for what is considered a "healthy portion". Because I was working hard in this area, it was good to be able to see the results of my efforts in dollars and cents.

* General Grocery - In this category I include all food items that aren't covered by the above 3 categories.

* Non Food - These are all the bits and pieces like toothpaste, toothbrushes, shampoo, deodorant, cleaning products, cleaning cloths etc. It's up to you what you do and don't include here. Things that I DON'T include are make up, larger household items like mops, toilet brushes, batteries, socks, toys, stationery etc that can be bought at the supermarket. Those things have their own separate categories.

One of the benefits of breaking down your grocery receipts is that if you have bigger items like those above, it can really upset the balance of your grocery budget. I subtract them from my total and enter them elsewhere in my budget book. If you don't have a "budget book" (see Tracking Spending for more info on this), that's fine. Just subtract these items from your total spend (unless you *want* to cover these within your grocery budget).

What categories you use is completely up to you. I also have a category for "hospitality" where I allow extra money to accumulate and be spent when we have friends coming over.

What about TAKE AWAY? Do you include that in your grocery budget? Some people don't have a separate category for their take away spending. They work on the principal of "if there's anything left in the grocery cash at the end of the week, we'll use it for take away". Like I said, we're all different and you have to do what works best for you.

Here's why I DON'T do that. I find that the best way to get the *most* out of my grocery $$ is by NOT spending the same amount each week. Some weeks I'll spend $25 and other weeks I might spend $200. Part of that is because of my location and the way I shop. BUT, I do tend to find that some weeks a LOT of what we eat is on special when other weeks very little is on special. Particularly when it comes to meat. If on the weeks I only spent $25 on groceries, we then spent the remainder of our budget on take away, that extra money wouldn't be there to stock up in the weeks when LOTS of stuff is on special. Does that make sense?

We nearly always eat out of the cupboard and freezer and my shopping then replaces those items. It would be really easy to *blow* money on take away that we really *couldn't* afford and then I'd be left with an empty pantry and be *forced* to pay a higher price for things. That can be a very nasty spiral. You get less for your money. Then you get frustrated and depressed and buy take away as a bit of an "escape"..... and so the spiral continues.

I am NOT advocating buying no take away. I just personally prefer to have a separate budget for our take away and to keep this cash separate. No cash=no take away.

Well, if you've made it this far you can probably see why I've decided to do this series in parts. Here's a bit of a summary:

BE OPEN - to new ideas and the fact that you CAN reduce your grocery budget if you want to.

BE HONEST - you don't have to show anyone else your spending figures. But be prepared to face up to them yourself.

BE REAL - if you only spend $25 this week on groceries, you *know* that it hasn't *really* cost you that little. You're eating off reserves you've paid for in the past. Great idea, just make allowances for the need to replace that food at some point in the future.

BE DISCIPLINED - yeah, I know it's *almost* a swear word. LOL. We're not born with discipline (just ask my high school maths teachers lol). It comes with practise. Believe me, a few minutes here and there of keeping track of what you spend could add up to hours of work you don't have to do in order to earn the money being wasted (or could add up to that holiday you've always wanted to take....or new shoes.....or *add your passion here*........)

STAY TUNED - I'll post my next instalment on reducing the grocery budget next Friday.

In the meantime, keep a record of what you spend on groceries over the next week and break it down into categories. Just try it for 1 week.... For me? LOL. (I need a little puppy dog face emoticon to go here lol). :-)

Note from Lightening: Since writing this post, I have continued with this series. You can find more posts from this series at the following links.

Reducing the Grocery Budget - Part One
Reducing the Grocery Budget - Part Two
Reducing the Grocery Budget - Part Three
Reducing the Grocery Budget - Part Four
Reducing the Grocery Budget - Meat

Australian Money Saving Tips


Briget said...

Excellent post Jodi, you explain it so well. I really like the idea of the different categories and will be giving that a go this week. My grocery spending hovers around the $110 a week, but there are only 3 of us, so I want to see where I am spending before I try and cut down.

Have a great weekend!

Ali said...

a great post!! I know I save a lot now that I'm cleaning with bicarb and making my own washing powder :) as well as growing some vegies. I only ever buy meat on special and then stockpile it. I also stockile on any grocery items I can and hardly buy anything that's full price :)

Lisa said...

Lightening, I've been in the "too chicken to write it all down" basket for budgeting as yet. You've given me some excellent tips for starting out. Given the way our spending changes from week to week depending on specials and stockpiling, how many weeks do you think you'd need to track, before you get a realistic weekly budget figure? Looking forward to the next instalment.

lightening said...

Lisa - just start with the 1 area first (whether that be groceries or another area you prefer to begin with). That way you don't get too overwhelmed. Before I started tracking all of my spending, I just started by tracking grocery spending. It's a good way to ease your way into it. As for how long you'd need to track to get a realistic budget figure. Ideally, I'd say 3 months. However, most months my spending seems to hover around a similar amount so even 1 month would give you a bit of an idea. You do have to bear in mind that a budget is a fluid thing and is likely to need some tweaking and adjusting as you go. I got myself very frustrated in the early days if things outside of my control upset my budget (okay, it still bothers me now but nowhere near as much). I do try to allow for this now but my budget is never perfect.


It's obvious that you moms who take care of the household things need a pat on the back and lots of praise. If you left the grocery shopping to us men, we'd come home with only red meat and Oreo cookies.

Thanks for stopping by my blog and I hope you have a great day.

Laura said...

AWESOME ideas...I was just thinking of this the other day when I saw my bill after popping in to buy milk! I am going to re-read and try to implement.
Thanks for the suggestions.

Thanks for visiting my blog. I am going to snoop around yours -I have enjoyed the couple of posts I have read to date. Keep it up!!!

Great to "meet" on this blogging adventure!

Ali said...

lightening ~ the cross stitch patterns are yours :) please email me your details so I can post them. (email address is in my profile) Ali

Jade said...

You are a genius!! I am loving your blog.

lightening said...

Jade - thank you. I'm glad you're enjoying my blog. I sure enjoy writing it! :-)

Ali - thank you. Have done.

Laura - thanks so much for stopping by.

Trey - that made me smile!!! Mind you, my DH has been known to do better with the groceries than I do. Then again, he does like his meat and his cream bikkies! :-)

Lis said...

This is sort of what I do too, although I have never tried breaking it down into categories to see how much we spend in each group. I might try this for the next month to see how it all fits together! Thanks for the advice :)

Joy said...

Great post Jodi! Looking forward to reading more on this topic. It is so motivating to hear how others keep their bills down.

Lori - The Simple Life at Home said...

This is so helpful! I've really been trying to cut down on my grocery spending, but struggling with it. Now I have the step by step plan. Thanks so much for posting this. I'll be referring to it often, I believe.

Crafty Mama said...

Excellent series..very helpful and interesting! Thankyou :)