How to save money on your groceries
Updated 11:06 a.m. UTC Nov. 13, 2023
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Food has become much more expensive in the post-Covid era.
The average household spent a little more than $5,700 on groceries in 2022, per the Bureau of Labor Statistics, which was almost 16% more than in 2020. Over the same period of time, incomes grew by roughly 11%.
Inflation moderated in 2023, with grocery prices growing at a much more sustainable rate recently compared to a year earlier. Still, families will likely face higher bills than they otherwise would have thanks to the big buildup in prices over the past few years.
With a little bit of planning, and minimal effort, you can lower your bill by hundreds each month.
Easy ways to save money on your groceries
Use a rewards credit card
A cash back credit card allows you to earn money in the form of a statement credit based on your purchases. While most of these credit cards have a base rate for all purchases, some options include higher rewards for certain categories — including groceries.
The American Express Blue Cash Preferred credit card, for instance, offers 6% cash back on up to $6,000 per year of qualified grocery purchases. In 2022, the average spending on food at home totalled $5,703. With a 6% cash back reward, that would amount to over $342 in savings each year, or nearly $30 per month. Paired with other cost saving measures, that can add up to a big difference in your total grocery spending.
Just remember that you need to pay your balance in full each month in order to reap these benefits. Otherwise, you’ll accrue interest and make your groceries even more expensive.
Make smaller, more frequent shopping trips
Research shows that shopping for groceries multiple times a week can actually save you money, reducing your bill anywhere between 9% and 12%. You’re more likely to stay on budget because you’re only shopping for the next few days ahead of you.
Plus, smaller shopping trips help eliminate food waste. By using what you have before heading back to the supermarket, you’ll reduce food waste while also keeping more money to add into your savings account.
Incorporate batch cooking
Batch cooking is a practice where you make enough food to last two, or more, meals instead of just one. It ensures you use up all of your ingredients and gives you a day off cooking.
“Batch cooking is a great way to stretch your dollars,” said Kari Lorz, a certified financial education instructor and founder of Money for the Mamas. “Buying fewer ingredients is less expensive than buying lots of items.”
She recommends creating meals with similar ingredients so you don’t have to stock up multiple seasonings or other ingredients for each individual meal.
“Try and make double recipes of your dinners to make leftovers for the next night or lunch tomorrow,” Lorz said.
Order groceries online
Ordering groceries online can come with more fees and a slight upcharge on some items. But there’s still savings potential, especially if you’re prone to impulse purchases while browsing the aisles in person.
“Believe it or not, many of my coaching clients report spending less overall by using grocery store services online and then go pick up the groceries without leaving the car,” said Kristine Stevenson Seale, owner of Advocate Financial Coaching. “This is especially true for parents with babies or small children at home.”
Not only will you save time, Stevenson says, but you’ll also avoid constant requests for junk food.
Avoid products with too much added sugar
Speaking of junk food, avoiding too many sweet treats is a great way to lower your grocery budget. Brian Theis, recipe developer and cookbook author, recommends skipping sugary soft drinks that don’t actually contribute nutrition to your meals.
“Anything else with added sugars like candy, energy drinks, pies and donuts should automatically go in the ‘avoid and save’ column,” he said.
You can still grab a treat or more expensive ingredients every once in a while, just make it part of the plan rather than an impulse.
“Even as you’re watching what you spend, it’s important to make sure to enjoy yourself,” Theis said.
Inflation and groceries: When will prices drop?
While the price increases are expected to slow, the USDA does not expect prices to drop in 2024, in fact, they are expecting them to rise another 2.2% overall.
But not all food categories move at the same pace. Eggs, for instance, experienced a huge price spike over the last year, partially due to a bird flu outbreak. At the peak, the price for a dozen eggs was almost $5. Now that number is closer to $2.
Tracking prices can be a helpful measure of the current trend in specific types of food. When you see a good deal, stock up or opt for a cheaper alternative until those prices return to normal.
This is a personal decision, but the USDA does publish sample spending budgets based on either a low, moderate, or liberal meal plan. For August 2023, the agency recommended the following amounts for a female and male (ages 19 to 50) combined:
- Low: $559.10 per month.
- Moderate: $693 per month.
- Liberal: $861.70 per month.
As long as you pay off your balance each month, grocery and cash-back credit cards can help you save on your groceries. Choose the best credit card that doesn’t come with fees or other hidden costs that will actually have you spending more.
The 50/30/20 budgeting rule makes it easy to allocate your income into three separate spending categories. Using your after-tax income, divide your spending based on these percentages:
- 50% for needs (such as food, housing and transportation)
- 30% for wants (like eating out or going on vacation)
- 20% for savings and debt repayment (such as retirement contributions and credit card payments)
Use this 50/30/20 budget calculator to automatically create your spending plan based on your own income.
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