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Guide to Saving Money on Groceries

Guide to Saving Money on Groceries
Susan Guillory
Susan GuilloryUpdated February 8, 2023
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
If it seems like the cost of groceries has gotten out of hand, it’s not your imagination. According to the Consumer Price Index, the price of groceries went up 13.5% between August 2021 and August 2022, the largest 12-month percentage increase since the period ending March 1979.Unfortunately, food prices aren’t expected to drop any time in the near future. The good news? There are actually some simple actions you can take to stretch your grocery budget and help offset the increased cost of groceries. What follows are 11 tips that can help you save money on your next grocery run.

How Much Do People Spend on Groceries?

The amount people spend on groceries varies widely depending on where they live, where they shop, what they buy, and how many people they live with. According to the U.S. Bureau of Labor Statistics, Americans spend an average of $5,259 a year, or roughly $438 a month, on groceries.

Budgeting for Food

How much money you should budget for food each month will depend on your income. U.S. consumers spend an average of 10.3% of their disposable personal income on food – divided between food at home (5.2%) and food away from home (5.1%). How does your spending compare? To find out, tally up what you have spent on food over the past three to six months (if you mostly put it on your credit card, this will be relatively easy), then come up with a monthly average. Next, look at your monthly take-home income to determine what percentage is going on food.For a general guideline on how much you should aim to spend on groceries to maintain a nutritious diet, the USDA publishes a monthly food budget. They offer an estimate for weekly and monthly spending, divided into a "low-cost plan," a "moderate-cost plan" and a "liberal plan." Here’s how it breaks down for a family of four with one child aged six to eight and the other aged nine to 11.Low-cost plan: $234.40 per week; $1.015 per monthModerate-cost plan: $294 per week; $1,271.40 per monthLiberal plan: $347.10 per week; $1,304 per monthHere’s how it breaks down for a couple that includes one male and one female aged 19 to 50.Low-cost plan: $125.60 per week; $527.10 per monthModerate-cost plan: $151.90 per week; $658.40 per monthLiberal plan: $182.30 per week; $789.70 per monthRecommended: How to Prepare for a Recession as a Recent Graduate

11 Ways to Save Money on Groceries

If you’re struggling to keep food costs within your budget, here are some simple ways to stretch your grocery dollars.

1. Only Spend Cash

Once you determine how much you want to spend on food each week, consider putting that exact amount in your wallet – and removing your credit cards – before heading out to do your weekly shop. This will force you to take note of prices as you toss things into your cart, and prevent impulse buys – you only have so much to spend. Once the cash runs out, you’re done.

2. Plan Your Meals and Make a List

One simple way to save on groceries (and cut back on take-out) is to make a meal plan for the week and write up a shopping list of ingredients before you head to the store. As you walk the aisles, be sure to only grab things that are on your list. If you go to the store without a plan, there’s a good chance you’ll end up buying things you don’t need (not to mention, forgetting things you do). 

3. Shop Your Pantry First

Before making the aforementioned list, it can be a good idea to check out your pantry – and fridge. You may already have the makings (or the beginnings) of a meal or two. For example, if you have a box of small pasta, a jar of marinara, and a can of beans in the cupboard, all you need are some fresh veggies to whip up a pot of minestrone soup. Building off what you already have will immediately reduce your grocery bills.

4. Buy the Sunday Paper

Even in the digital age, coupon inserts are still a thing. In fact, getting a subscription to the Sunday newspaper (or picking one up at a discount at your local dollar store) can be well worth the investment. The inserts are full of deals, such as “buy one, get one free” and anywhere from $0.25 to $2 off a product. Scanning these circulars for items on your grocery list (or shelf stable items you frequently use) can translate into significant savings.

5. Download Your Store’s App

You likely already have your store’s loyalty card, but do you have the store’s app? If not, it can be worth downloading it onto your phone and linking your card. These apps typically allow you to browse available discounts and simply click to load coupons onto your card. When you scan your card or (or the barcode on the app) at checkout, the discounts will automatically be applied.

6. Use a Rebate App

Speaking of apps, there are a number of rebate apps (such as Ibotta, Checkout 51, and Rakuten) that give you cash back for buying groceries. You can typically download the app and register for free. You can then use the app to save on top of any coupons or loyalty deals you’re already getting. While rebates don’t give you a discount up front (like a traditional coupon), you should see savings in the long run. In some cases, you can link your loyalty card to the app, in others, you need to submit receipts to receive a rebate.

7. Look at Price Per Unit

The lowest price doesn’t always mean the best deal. Not every version of a product is the same weight or size, so you’ll want to look at the price per unit often printed on the pricing display near the product). For example, if a box of cereal is $2 but only has 10 ounces, and a large box is $4 but has 25 ounces, the larger box is the better deal, even though it’s twice the price. If the large box is $6, however, then you’re better off with the smaller ones. 

8. Try a Different Store

You may shop at your current go-to store because it’s the closest, the least crowded, or simply out of habit. However, it may – or may not – have the lowest prices. Generally, the cheapest grocery stores in the U.S. include Aldi, Market Basket, WinCo Foods, Food 4 Less, Costco, Walmart, and Trader Joe’s. It might be worth widening your net to find a cheaper store (though not if it means spending a lot more in gas).Recommended: 11 Simple Ways to Save Money on Gas 

9. Don’t Go to the Store Hungry

No doubt you’ve heard this advice, but do you follow it? When you shop on an empty stomach everything – even that day-old coconut cream pie in the bakery department – looks tempting. If you shop after a full meal, on the other hand, you’ll be more likely to only buy things you actually need and keep your food total in check.

10. Order Curbside Pickup 

Shopping online can be an easy way to compare prices, see what’s on sale, and watch your total add up in real time. It also allows you to check your pantry or fridge to see if you already have something before you add it to your cart. On top of that, online food shopping keeps you from making impulse purchases – like gum or candy in the checkout line. Some grocery stores offer their own curbside pickup services for free, but others charge a small fee.

11. Avoid Pre-Packaged Items

While buying pre-cut veggies, all-in-on salad kits, and pre-shredded cheese can save you time while cooking, stores typically charge more for these conveniences. When possible, opt for whole items, like fresh or frozen veggies, a head of lettuce (you can easily whisk up some dressing), and block cheese, to save money.

Eating Out vs. Cooking Your Own Meals

On average, a meal away from home costs three to four times more than a meal prepared at home. If you often eat out (or bring restaurant meals in), one of the simplest ways to save on food is to gradually start swapping meals out with meals prepared at home. To do this, you may first want to determine how much you are currently eating out or getting take-out. You can do this by gathering receipts or credit card statements for the past three to six months and coming up with the average number of restaurant meals you buy per month. Now, consider cutting this number by 25% for the upcoming month. The following month, you might cut it by 25% again. In just two months, you’ll be eating out half as often. Depending on your budget, you may want to keep cutting back or stick with that number.

The Takeaway

Groceries have gotten expensive. Fortunately, adopting a few new habits can help you lower your monthly food bills and stick to your spending budget. This can translate into more money in your savings account and, in turn, can help you meet short-term savings goals – like going on a great vacation or putting a downpayment on a car – faster.

3 Money Tips

  1. Checking accounts are ideal for everyday transactions but earn little or no interest. Savings accounts are better for storing and growing your money — they earn higher interest but often restrict how many withdrawals you can make per month.
  2. To get into the savings habit, consider having 10% of your paycheck directly deposited into your savings account. Or, set up a small automatic recurring transfer from your checking account into your savings account on the same day each month.
  3. To set up a simple monthly spending budget, consider the 50/30/20 rule. This involves splitting your after-tax income into three categories of spending: 50% on needs, 30% on wants, and 20% on savings.
Lantern can help you compare online savings accounts and find today’s best rate.

Frequently Asked Questions

How much can you save on groceries with coupons?
What is a good budget for groceries per month?
How can you stretch groceries?
Photo credit: iStock/CentralITAlliance

About the Author

Susan Guillory

Susan Guillory

Su Guillory is a freelance business writer and expat coach. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.
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