Each year my wife and I make financial goals for the year ahead. In 2018 the year of change led to some pretty crazy goals becoming a reality. One of my goals was to make health and fitness a priority in my life. The end result included a transformation and being in the best shape of my life. This didn’t come without sacrifice and in this case a hefty grocery budget. That is why this year one of my main financial goals is to spend less on groceries!
Beat Last Year
That should probably sound more exciting, but it seriously is one of my goals to spend less on my grocery bill. That’s why I was all too excited when J Money from Budgets are Sexy, posted a challenge from a reader.
The “Beat Last Year” budget challenge is one of my 2019 financial goals, I wrote it on my 2019 Financial Goals spreadsheet. This statement makes it difficult to believe I don’t walk around with a pocket protector, tweed pants, glasses with tape around the edges from 1987, and a combover protecting the last of my shiny bald head. This is straight from the website so let’s follow the rules or at least a version of them.
Beat Last Year Rules
Here are the rules again for anyone who wants to try it:
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Pick a category of your spending you desperately want to improve
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Search your records for how much you spent on it *last year* around this time
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Commit to spending *less* in that category for the next month!
Rule number one to pick a category is pretty easy, already done. Groceries, which I’ll define later and most likely bore you to death.
I keep track of all my spending on Personal Capital, which is a website or app that allows you to track and manage your financial life. I personally use Personal Capital. By signing up via this link as an added bonus we will both earn a $20 Amazon gift card if you add at least one valid investment account (brokerage, 401k, IRA, etc) containing a balance of more than $1000 within 30 days of registering.
Commit to spending less in the next month, but really in the next year. So when I create a financial goal this isn’t a new year’s resolution where I will show up in January and never show up again. I set goals and figure out if they are attainable, adjust accordingly, and stick to it till I reach the goal. This will be no different, that’s just who I have become.
[tweetshare tweet=”Join me in the Beat Last Year budget challenge and tell me what you are going to beat” username=”EvenStevenMoney”]
Defining “Groceries” in our Household, Boring, Keep Scrolling
Before we take a look at the 2018 Grocery spending I want to define groceries in our household. This is ultimately everything that can be bought at a grocery store with few exceptions.
For example, we shop at Costco and include all kitchen items: paper towels, detergent, toilet paper, etc. This also includes anything we purchase for our dog, Angel. Dog food, treats, rawhide, all part of the grocery budget. Beer, wine, liquor all included in the grocery budget so as you probably can imagine my definition could be different than yours.
If we travel or are on vacation and buy food at a grocery store this also goes to the grocery budget rather than the travel. The only real exceptions I can think of are purchasing small appliances or household items like a coffee grinder or pots and pans as an example, not groceries. I will actually split and pay separately when purchasing items at Costco.
As an aside Personal Capital does not allow you to “split” transactions, however, the transaction amount comes through that is the full amount applied to your spending category. If this occurs in 2019 I’ll make sure to make a special note, but for the most part, it’s pretty harmless, I don’t usually go to a grocery store and buy food and lawn chairs, just not my style.
2018 Grocery Spending, OH THE SHAME
One of the things I work together with my clients is to track your spending and make sure it matches what you value the most. This is the beginning of the Brick by Brick Road to Financial Freedom.
In 2018 my priorities and values changed. I cared more about the food I put into my body than the actual cost, which totaled $785.69 each month. In some cases, I even cared more about the convenience factor in obtaining the food.
For example Jewel, a local grocery store was within walking distance from our home in Chicago and was very convenient to have my wife grab a few groceries Sunday night for the week ahead while I walked our dog in the park nearby.
While I enjoy taking walks with my wife and dog on a Sunday evening, I think the budget is telling me this part cost me a little more money. I found this especially to be true later in the year and in our new home in Miami.
Paleo & Crossfit
Most of the changes and costs began with my diet or health and fitness value. For example, I no longer would eat farm-raised fish which I attribute to the Paleo movement and Robb Wolf. All of the fish I purchase at a grocery store needs to be Wild Caught, not surprisingly this is more expensive.
We also made a shift towards organic produce which makes up most of our fruit, vegetable, and meat consumption. I ate mostly a Paleo diet throughout the year and really took hold to Crossfit’s founder Greg Glassman’s approach to fitness in 100 words.
Eat meat and vegetables, nuts and seeds, some fruit, little starch, and no sugar. Keep intake to levels that will support exercise but not body fat.
Why am I telling you all this?
I think some of this is my own justification so apologies for explaining why I spent more money than I planned. However, what this does is make me go through and figure out why I was spending more money.
When I dive into the justifications, it comes down to 2 simple points:
- I place a high value on the food that goes into my body and I am willing to spend a higher amount of my budget towards this important value.
- Convenience is the enemy of spending less money on my groceries
My working theory is that if I take the convenience and large grocery store out of my grocery budget I should be able to reduce my grocery expenses. Let’s take a look at my grocery spending budget for 2019.
2019 Grocery Budget
From shame to super is the motto I will be working with. I talk about this with my clients but I cannot stress this enough, none of this would be possible if I didn’t track my expenses. If you don’t know how much you were spending it’s difficult to change course on what you plan to spend.
Our grocery spending for 2018 was out of hand. We originally started with a $400 grocery budget and slowly increased it to $450 then $550 and soon realized that even this was being driven past like a new Ferrari test drive on an open straight away.
Grocery Budget Spending by Store
Costco
If you look at the spending at Costco in 2018, the monthly averages are just a little over $200 per month, which is what we plan to use as a spending budget in 2019. Cutting $11.62 per month is entirely doable.
The strategy is not to visit monthly, but rather every 6 weeks at an amount of $300, which amounts to the same $200 per month. The main purchases at Costco include:
- Meat & Fish (Organic/Grassfed/Wild: Eggs, Beef, Bison, Turkey, Steak, Chicken)
- Frozen Vegetables (Normandy and Stir Fry)
- Dairy (Butter, Milk, Cheese)
- Nuts (Almonds, Almond Butter, & Mixed Nuts)
- Dog Food
These items are purchased almost every time we shop at Costco and need to replenish every ~6 weeks, this amount varies but $200-$250 is pretty common and increases if other household items are needed for each visit.
Aldi and Fresco y Mas
The original plan was to shift our day to day grocery needs to a low-cost provider like Aldi. This has already morphed into a combination of stores after my initial visit to Aldi’s.
The plan can still include Aldi, but there is another low-cost grocery store that our in-laws shop at called Fresco y Mas which is a grocery story marketed towards the large Hispanic population in South Florida and providing “low costs everyday” as part of their marketing slogan.
Farmer’s Market
One place that I have always gone to but rarely made any purchases in Chicago was the “local” farmer’s market. As you can imagine not a ton of farms are located inside the concrete jungle of Chicago and the reason I use the term “local” when describing them.
However, living in South Miami or closer to Homestead and the Redlands provides a real local opportunity to purchase fresh fruit and vegetables. There is even someone from my local gym who has a fruits and vegetable stand with their family. My wife and I made our first venture a couple of weekends ago and came away with enough fruits and vegetables for the week while spending less than $30.
I don’t know the exact frequency we would purchase our items from the farmers market, but once a month certainly seems reasonable. As you can see switching to low-cost providers for almost half of our grocery spending budget should go a long way in stretching the dollar and keeping within our grocery budget.
The budget spending goal for day to day items is a total of $200. Since this amount should primarily be made up of fresh fruit, vegetables, and specific recipe needs, this number should remain rather low. I think this number could be closer to $100-$150 depending on what is needed.
Publix
One of the reasons I knew change needed to occur is because of the large amounts of money we were spending when we moved from Chicago to Miami.
Any large grocery stores I tend to struggle with the vast amount of choices available, expensive options, conveniently located, and buy one get one offers. This is Publix in a nutshell for me.
Looking at the chart below which is as of our official move to Miami, not only did the average monthly budget go even higher, $862.37 but one of the biggest culprits was shopping at Publix. Publix averaged $456.20 if you include our Instacart experiment, which I have not written about as of yet but not surprisingly offered convenience at a higher price.
You read that right, we were spending over $450 just on one grocery store which was close to half of our spending. If we can reduce this spending, this will help in winning the grocery budget battle.
This amount and shift in spending is being budgeted down to $50. This is intentionally very low, I want it to be really clear that the only items that we should purchase are last-minute recipe items and the few items we regularly eat. In fact, let’s list them here to hold myself accountable.
- Home Run Inn Pizza
- Chobani Greek Yogurt
- Oats & Granola
- Fruits and Vegetables
Summary
The goal is fairly simple. Beat last year’s grocery budget by limiting our exposure to the convenient but largely expensive Publix grocery store.
Make a small shift to getting our groceries at low-cost grocery stores and farmer’s markets with the bulk of our grocery shopping done at Costco. My plan is to report on this every 3-4 months, so I would anticipate April or May being the first time I will write about this again.
Eating healthy is one of my core values so I am going to focus our spending on these items. It’s important to remember that if you exceed your budget you will have to make a sacrifice in another area.
As a money coach, I work with clients to get their grocery spending under control. Here are just a couple ways I work to curb this spending.
- Make a meal list for the week
- Match that meal list with a grocery list and take this with you to the store
- Don’t shop hungry and please don’t shop hangry!
- Write down the items purchased that were not on the list and their costs
- Shop with cash only
- Track your spending to see how much you are really spending
It’s amazing to work together with a client and be able to help them to save $100 or $200 in a single month. This has such a domino effect on their financial lives. One might think it’s about saving money but really it’s about getting rid of the anxiety that debt causes, the burden of making extra interest payments each month go away.
If you are interested in making a change in your money habits to build a life without financial worry, check out my Money Coach page. Change your financial life by working with me.