An $1800 Grocery Bill
The Dollar Stretcher
by Gary Foreman

Hi Gary,
I am at a loss. My wife and I both work and we have 4 kids. We make good money between us but are always living paycheck to paycheck. One big problem is our grocery spending. I was looking at last month’s expenses and saw that we spent over $1800 in groceries over the month at one grocery store (that is not a typo). There were a few other stops in there as well at some convenience stores. The really sad thing is we aren’t eating steak and lobster - we eat frozen burgers 3-4 times a week and tacos.

As mentioned we both work and although I appreciate suggestions about making everything from scratch, that is not feasible for us. Most times during the week we are not eating dinner until 8pm. We try to shop at Costco (Sam’s Club, etc.) but all that does is rack up a huge $400-600 bill there and then we still “run to the store” 3-4 times a week.

I am at the point of seriously considering paying someone to help us plan our grocery spending and meal planning. Anything I can try first?
Darren

Darren is right. His family does have a problem. They really should be eating steak and lobster if they’re spending that much on groceries each month.

Let’s attack our problem on two fronts. First, we’ll examine a business tool that will help Darren understand the problem. Second, we’ll see if we can’t suggest some tactics that will work for his busy family.

The business tool is one that’s used by management to help identify and isolate a problem. It’s sometimes known as reading a report from the ‘bottom up’.

If I were to evaluate my departmental budget, I’d begin by looking at the bottom line. How did the total expenses compare to the planned expenses. If they were as expected I knew that the budget details probably wouldn’t provide many big surprises.

My next step was to look at the major subtotals that made up the budget total. Again I was looking for results that differed from the budget.

Only those areas with a significant difference drew my attention. By checking the subtotals first I managed to focus my time on the areas where detailed study would pay off. Only then would I really study the individual expenses looking for items that were out of line and needed correction.

It appears that Darren has already done the first step of this process. He has identified that food is the problem. The next step is to figure out where in the food budget things are going wrong.

It will require a bit of work, but nothing too strenuous. Darren will want to take a month’s worth of grocery store receipts and place the items into categories. The categories should reflect the type of grocery item. Some possibilities: meats, breads, frozen foods, fruits/vegetables, desserts, drinks, snacks, lunches, cleaning supplies, pet food. Darren will want to use the categories are most useful for his family.

He can use a computer spreadsheet or a simple note pad (one sheet for each category). Simply put each grocery item purchased during the last month into the best category. Then total the categories.

Darren will focus his attention on the largest categories. He will probably find a few areas that stick out as problems. He can then work on solutions to that more specific problem.

What we have done is taken a large, overwhelming problem and turned it into something specific that Darren can work on.

Next, let’s look for strategies that match Darren’s family. We’ll focus on ideas for families that are very busy. He’s right. No one is going to come home at 8pm and start cooking from scratch. Fortunately, that’s not necessary.

The trick for Darren’s family is to shift the cooking so that it’s done largely before 8pm. There are a variety of tools and tricks to do that.

For instance, it’s easy to put a roasting chicken in a slow cooker in the morning and have dinner ready when you get home. Or a roast. Or a stew. A search on ’slow cooker recipes’ will turn up dozens of ideas for meals that will cook while you’re away from home.

The freezer and microwave oven are a great tandem for the busy cook. The freezer allows for meals to be prepared days or even weeks in advance. The microwave allows those frozen meals to be ready in minutes.

Many families use the weekends to prepare complete meals for the freezer. They’ll fix three or four meatloaves or a gallon of spaghetti sauce. Meal sized portions are frozen for use in upcoming weeks.

Some families will even freeze individual meals just like a frozen dinner. That way any family member can head for the freezer whenever they’re ready to eat.

Still others will do all the prep work ahead of time. For instance, they’ll brown five pounds of ground beef and freeze one pound packages. Half the work is done the next time they want to make anything requiring ground beef.

The trick is finding methods that shift the work from 8pm to a more convenient time. A trip to the library or internet should provide many good ideas.

Using these two tools should help Darren take control of their food bill without ruining their diet or changing their lifestyle. Now all we need is an invitation to dinner!
_________

Gary Foreman is a former puchasing manager who currently edits The Dollar Stretcher website TheDollarStretcher.com and newsletters. If you’re looking for ways to stretch your day or your dollar visit today!

Saving money is so important for many reasons. Some of the reasons that saving money is so important have to do with security and safety, while other important reasons for saving money have more to do just with the practical aspect of trying to plan ahead for major expenses.

In terms of emergencies, it is so important to be saving money. While no one likes to think about the possibility that they will lose their job, become disabled, or have some other sort of disastrous financial crisis, the fact of the matter is that it happens to people all of the time. Even much smaller emergencies, such as needing car repairs, are better handled by having saved money along the way, as opposed to having to scrape money together during a crisis. Saving money is so important for these types of situations. If at all possible, you should have a savings of three months worth of your expenses to help in case of emergencies.

Saving money is important for planning ahead, too. Almost every parent would like to see their children go to college, for example. However, many children will not be able to go to college on scholarships. Those that do not will either have to find a way to pay for college or to take out student loans. Student loans may not even cover all of their expenses. Saving money is an important part of providing for your child or childrens’ education. Education is not the only area that parents should save for, in regard to their children. For example, in the same way that parents save money as an important part of education, they may also save money for their childrens weddings, or to help their child buy their first car, or even their first home.

Finally, saving money can be an important part of just enjoying life. Taking a trip to Disney World is a lot more enjoyable when you know that you have paid for the trip with money from savings, as opposed to using credit cards and having to pay for the trip for years to come.

People may save money for a variety of reasons. Still, the main things that people save money for tend to fall into a couple of specific categories. People tend to save money for emergencies, they save money for their children, they save money for retirement and they save money in order to enjoy life to a greater degree.

Of all of these things, emergencies are probably the one main thing that people save money for. It is true that nobody likes to think about losing their job, a disastrous financial crisis, or a debilitating injury. Unfortunately, these sorts of emergencies happen to people all of the time. Even much smaller emergencies, such as needing car repairs, are better handled by having saved money along the way, as opposed to having to scrape money together during a crisis. Saving money for these types of situations is critical. If at all possible, people should have a savings of three months worth of their expenses to help in case of emergencies.

People tend to save money for their children, as well. Parents want to see their children succeed in life, and to be happy. They may save for a child’s college education, for example. They may save to help the child buy their first car. Some people save money for their child’s wedding. Some people even save money to help their child buy a house when they are older.

People also save money to enjoy life. Taking a trip to Disney World is a lot more enjoyable when you know that you have paid for the trip with money from savings, as opposed to using credit cards and having to pay for the trip for years to come. Other people might save money for a hot tub, or for an addition to their house, or to purchase a sports car.

Finally, people tend to save money for retirement. Fortunately, with employer-sponsored 401(k) plans, and any number of types of IRA accounts, people are able more now than ever to provide for their own golden years.

Being a college student and being broke are things that very often go hand in hand. If there is anyone that needs to save some money, it surely would have to be the college student. Here are the top 10 ways for students to save money:

10. First, students can save money by avoiding vending machines and cafeteria drinks. Bring a water bottle along with you everywhere you go, and refill it in the water fountains. If you can’t do water, pack a thermos of coffee or any other beverage in your backpack, along with some snacks to eat throughout the day.

9. Save on Internet service and e-mail by utilizing the university’s e-mail and Internet services.

8. Students can save a ton of money on textbooks by avoiding the school book store and shopping online. Even when you consider shipping costs, you can probably get textbooks at a 20-50% discount off what the bookstore is selling them for.

7. School supplies will also be less expensive at other stores than they will be in the school book store. Chain department stores and even office supply stores will almost always be a better buy.

6. If possible, try to trade or buy books from students who have already had a certain class. You’ll be better off, and so will they.

5. Many businesses offer a student discount, so get into the habit of asking if there is one everywhere you go. This is a great way for students to save money.

4. For printing or copying, consider printing 2 pages to a sheet, or reducing copy size. Even at just a few cents a page, those photocopy costs can add up.

3. Leave your car at home. Or, if you do have a car at school, get in the habit from the beginning of asking for a $1 donation whenever someone rides with you to help cover gas.

2. Pizza coupons are your friend.

1. Don’t be afraid to buy used. Second hand stores can save you money on everything from clothes to school supplies.

You should start saving retirement as soon as you are able. The fact of the matter is that if you start saving money for retirement even just a couple of years sooner, you will be exponentially better off financially when it is time for you to retire. The real question isn’t whether you should start saving money for retirement. The real question right now is how much you should be saving money for retirement, and in what way you should be saving money for retirement.

The amount of money that you should be saving for retirement depends on a great number of factors. Your current age, whether you are married and have a family, how much you would like to have when you retire, and at what age you would like to retire will all influence the amount of money that you should start saving for retirement. An investment planner can often help you figure out how much it is that you need to save.

There are a variety of ways that you can start saving money for retirement. Most of the best ways to save money for retirement involve using tax-deferred sorts of retirement plans and accounts. These would include plans like employer-offered 401(k) plans, for example. In many cases, your employer will match a certain amount of your contribution to your 401(k), so it can be double advantageous to save money for retirement using this method. Other sorts of methods would include IRAs (also known as Individual Retirement Accounts). There are a variety of IRAs, and most of them provide you with some sort of tax advantage or another. Annuities are another option that you may consider, and these are typically offered through life insurance companies. Annuities tend to be structure in a way such that you will get a certain amount each month once you retire.

It is not safe to assume that there will be a system like Social Security to provide for your needs when you retire. Even if there is, it is likely that it will not be enough to live the same sort of lifestyle that you live now. Saving money for retirement now is one of the wisest things that you can do with your money.