I’m sure many of you are familiar with the well known biblical story of the “Loaves and Fishes”.  In this parable, Jesus takes 5 loaves of bread and two fishes, blesses them and in short, is able to feed (with leftovers) a crowd of five thousand of his followers!  While the story has much deeper messages of faith and our relationship with God, I can’t help but wonder if there is also a much simpler message – a message that shows us it’s possible to get much more out of what each one of us has been given than we might initially think possible.  

In an economy that has seen heavy job losses, pay freezes, high unemployment, and a host of other economic stressors, isn’t this a particularly relevant message?  In fact, I would argue that a fiscally conservative household should stress the importance of stretching its dollars and getting the most out of its finances in both bad AND good economic times.   

And one of those ‘low hanging fruit’ areas where our dollars can be stretched further and our loaves/fishes multiplied is the monthly grocery budget.   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 Americans 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.  This seems particularly evident if we look at the increased popularity of discount grocery outlets like Costco and Aldi (which has long been a favorite of mine).  

So what should you do?

1)      Cut your spending by 10%.  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 10% (note: this is probably most easily accomplished by cutting your expenditures in the “food away from home” category).  This is probably not nearly as hard as you might think.  

2)      Consider shopping at Aldi, Costco or another discount grocery store in your area.  Yes, I’ve walked through Whole Foods and the other specialty stores too and yes, they are wonderful … but if you’re browsing Personal Finance websites chances are you could make some changes in your spending. 

3)      Make a grocery list.  I know … this sounds silly but having a list (and sticking to it) and can help avoid those expensive impulse buys and even better, get you 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 – 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. 

So what are your strategies when it comes to controlling your monthly food related expenses?  Is it something you think about?  Am I full of it? 

* http://www.bls.gov

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