Inflation is here friends, and it’s hitting grocery store shelves hard. Did you know the average American household spends $7,729a year on groceries and eating out? To put that into perspective, if your take home pay is $30,000 a year, your food budget is eating up 25% of your income. Developing a strategy to save money on groceries will help protect your bottom line as inflation rises.
What’s worse is the amount of food you’re probably wasting too. Without a way to manage your pantry or plan meals, you might not know how much you’re spending on food or what you have. On top of spending so much money on food, the average American household ends up wasting about $1,500 worth of that food throughout the year. That’s literally throwing money away.
Inflation can be the catalyst for changing how you buy and consume food. This will help you allocate your resources better while transforming your relationship with money in the long-run.
Affiliate Disclosure: MBNY participates in a number of affiliate programs including the Amazon Associates affiliate program. Some of the links below are affiliate links and MBNY may be compensated for any purchases made through those links. You can read more about thathere.
What is Inflation?
Inflation is an increase in the cost of living due to price hikes and a decline in the purchasing power of a unit of currency. This means it costs more money to buy basic goods like milk, bread, and a gallon of gasoline.
There are a number of reasons why inflation happens. One reason is a disruption of supply chains where too much money chases too few goods. We see this happening as a result of the COVID-19 pandemic. Inflation can also happen when central banks print money. This is also happening as a result of U.S. government actions to stimulate the economy in the midst of the COVID-19 pandemic.
The market usually corrects itself when supply and demand are out of balance. As prices increase for an item demand will decline. When there is less demand the seller will drop prices to attract more buyers. To see this process in action just go to the markdown section of your local Target.
While price inflation usually corrects itself over time, monetary inflation does not. Check out this graph from the St. Louis Fed:
The supply of money has nearly tripled since the 2008 Recession. Because there is nothing backing the U.S. Dollar this new money was quite literally invented out of thin air. Unfortunately, economics is governed by the laws of supply and demand. As supply increases, the value decreases. This applies to everything including the U.S. Dollar.
It is likely that the effects of monetary inflation will linger even once things return to some semblance of normal. One way to hedge against inflation is to rein in your spending. You can do that by cutting back on food-related expenses.
Food waste happens when you shop without a recipe. You throw a few things in your basket and tell yourself you’ll wing it. Guess what? Unless you have a plan for how to use an ingredient you’ll forget about it
Earlier this fall I purchased a spaghetti squash thinking I would just cook it. It sat, and sat, and sat until finally I realized it had become too mushy to cook. When you don’t assign a recipe to the ingredients you buy they go unused. You might forget about them, leaving them to rot in the back of your fridge. You don’t have to be a meal prepper but at the very least go into the store armed with a recipe.
To get started I would recommend subscribing to a meal planning service like $5 Dollar Meal Plan. A service like this will help teach you how to grocery shop in a different way. Finding recipes to make can be overwhelming. A meal planning service can help alleviate that pain point when you’re just getting started.
Plan your recipes around ingredients you already have
The easiest way to cut waste is to plan from what you have. Take stock of what you have and find a recipe around that. If you have six sweet potatoes chilling in your pantry make a hearty stew or simply bake them and top with roasted vegetables and kimchi. Meal planning doesn’t have to be complicated — keep it as simple as you can.
To get started you’ll need to manage your pantry in the same way a store might manage its inventory. You can do this with a pen and paper or you can get inventory templates. I personally use this template. I printed it out at Staples where the print center laminated it. I got a few colorful dry erase markers and voila! An easy pantry management system that fits in a binder.
Buy fewer snacks
Processed foods are devoid of nutritional value and are some of the most expensive items in a grocery store. Compare a bag of chips to a banana. A bag of chips will run anywhere from $2-$4 while a single banana will probably cost you less than a quarter. The bananas is packed with fiber and potassium while the chips are designed to leave you feeling hungry. There’s a reason why Lay’s bets that you can’t eat just one chip.
Strive to buy fewer packaged foods by making things yourself. Get a spiralizer to make your own chips or bust out your apron and bake some cookies. Commit to just trying. Worst case scenario: you buy a spiralizer that collects dust in your kitchen. Best case scenario: you save money and get healthier too.
Drink more water
Did you know a lot of people eat when they are dehydratedrather than when they are hungry? When you’re dehydrated, your brain processes thirst signals the same way it does hunger. You mistake thirst for hunger which can lead to overeating.
Try observing your water intake. Pick a week and write down everything you eat and the times you feel hungry. The following week commit to drinking 28 oz. of water an hour before each meal. Keep recording the times you feel hungry. By drinking water before you sit down to eat a meal you are hydrating your body, allowing your stomach to send the proper hunger cues to your brain.
To make drinking water a habit, consider using a tracking tool, like theDone Appto keep track of your daily water intake — among other habits. The interface is simple and gives you the ability to keep track of progress over time.
Practice intermittent fasting
Intermittent fasting is the practice of limiting the window of time you consume food. For most intermittent fasters this means fasting for 16 hours and eating for 8. I practice this by skipping breakfast. My first meal of the day — around lunchtime — is also my heaviest meal. By consuming the heaviest meal first, I give my body the opportunity to convert that meal to energy to use throughout the rest of the day.
Through my intermittent fasting journey, I’ve noticed I need to eat less often, usually only two large meals and an afternoon snack. When you eat less frequently and more intentionally you will inevitably spend less money on food in the process.
(Disclaimer: I’m not a doctor. If you think this is something that might benefit you, talk to your doctor).
Eat according to your caloric needs
Most people struggle to count calories and few if any people plan their meals around what their body actually needs. We default to the recommended 2,000 calorie per day requirement put on food labels but did you ever consider you might not need to consume 2,000 calories every day?
Back in 2019 I completed a DEXA scan and a Resting Metabolic Rate (RMR) analysis. Through that analysis I learned that my body only needs 1,699 calories to operate throughout the day. By eating more than my body needs I not only put on excess weight but I spent money to make myself overweight. Ponder that!
If this strategy interests you, definitely consult a trained medical professional to figure out what your body needs to survive (as compared to what you think your body needs). To calculate an estimate of your RMR at home check out this calculator.
Eat more plants
As Michael Pollan famously quipped: “Eat Food. Not too much. Mostly Plants.” A plant-based diet is one of the most affordable diets on the planet. Plants are abundant, can be grown almost anywhere, and are filled with fiber which leaves you feeling fuller longer.
If you are new to a plant-based diet, consider going meatless one day a week. See how it impacts your health and your grocery bill. Here are some of my favorite resources to help you get started:
- Forks Over Knives
- Fed Up
- What the Health
- Game Changers
- The Omnivore’s Dilemma
- Fiber Fueled
- How Not to Die
- The Blue Zones
Be more deliberate with convenience foods
I love coffee and I love hanging out at coffee shops. There’s just something about cracking open a book at a coffee shop. That being said, there are a lot of people who advocate buying less coffee. While I don’t think you need to quit coffee, I do think you can be more deliberate how you consume it.
I used to spend hundreds of dollars a month on coffee. Most of my orders were froofy lattes to go. I progressively cut back on my coffee budget once I realized what I was actually buying: sugar. As delectable as a Starbucks Caramel Macchiato is, you’re mostly paying for the sugary syrups that go into the coffee, not the coffee itself.
After this realization I switched to ordering black coffee. Eventually I weaned myself off of that too and now mostly make coffee at home. When you buy coffee to go you are paying for the convenience of it.
Local coffee shops charge around $2-$3 for drip coffee. At your local grocery store you can get a pound of good coffee beans for $6-10. When you make your coffee at home it costs you around $0.50. Annually your take out coffee habit will cost you $912.50 a year compared to $182.50 if you make it yourself.
Convenience creep is real and is most visible in your coffee habit. By being more deliberate with how you consume coffee you will become aware of how convenience purchases are actually costing you more money than you may realize.
Cook with more spices
Your spice rack is probably the most undervalued part of your pantry (and the best hedge against grocery store inflation). The Western diet relies on pricey sauces to dress up cooking. Think about it: how often do you add ketchup, mustard, mayo, or sriracha to your meal?
Spices can not only make your dinner plate more palatable, they will probably decrease your grocery store bill too. Indian, Ethiopian, Latin American, and South Asian cuisines produce some of the healthiest and cheapest meals on the planet using a wide variety of spices. Look for recipes that use spices in lieu of expensive sauces — or even dairy for that matter. It will not only be healthier for you but you will be surprised just how long a jar of spice will last you.
The more frequently you go to the grocery store, the more money you’re going to spend. Think about how many times you “quickly” stopped by the grocery store to pick up just one or two things. Before you know it you’re approaching the checkout with a basket full of food you didn’t plan to buy.
To save money at the grocery store rethink how you go grocery shopping. Stock up on bulk purchases like oats or grains once or twice a year. Maintain a pantry by shopping for shelf-stable consummables once a quarter. Turn your weekly grocery trip into one where you are only buying perishables.
When you adopt this strategy you will immediately save money by purchasing items at a unit price rather than retail. Take rice as an example. A pound of basmati rice will run about $2 at the grocery. Compare that to a 20 pound sack of bulk rice which will cost less than $1 per pound.
If this is too much for you consider going in with a bunch of friends or neighbors. A 20 pound bag of rice split four ways is still cheaper than going to the grocery store every week.
Eat out less
Growing up my family would go out to eat twice a week. No my parents weren’t rich. By the end of the week my mom was simply too tired to cook.
I’ve since learned there are different types of dining out experiences. There are times when you dine out with friends or celebrate a loved one. And there are times when you dine out because you’re mentally exhausted and don’t have a clue what you could possibly make for dinner.
I don’t think you should stop eating out but I think it’s important to understand why you do when you do. Places like Applebee’s and Cracker Barrel are nothing more than overpriced microwaves. If the idea of cooking a meal overwhelms you, you’d be better off having a microwavable meal instead. You might be in a subconscious pattern of dining out without realizing the cost.
Food costs are rising due to inflation but with a little planning, you can protect your wallet. Meal planning should be looked at in the same way you might look at budgeting: every ingredient and every calorie needs to have a job. By being more deliberate with your food needs you can save money at the grocery store and quite possibly trim your waistline in the process.
Related Posts
3 Ways to Use ChatGPT to Save Money
ChatGPT is making waves around the internet. With an average of 13 million users per day it’s growing fast – faster than TikTok. If you’ve heard about ChatGPT you’ve probably heard about it in the context of jobs. Specifically that it’s going to replace … Read more
3 Insanely Genius Ways to Save Money on Groceries Every MonthFood prices are on the rise and it is unlikely they will go down anytime soon. Whether it’s inflation or the war in Ukraine, high food prices are here to stay. This economic reality is going to make it harder to stick to a … Read more
Epic Money Saving Strategies to Save More MoneyOne of the secrets to building wealth is learning how to manage your money. Warren Buffet famously still lives in the same house he originally bought in 1958! While the world’s richest man, Elon Musk, swapped his residence in California for a tiny house … Read more
Want to Budget Better? Start by Not BudgetingHave you tried and tried to write a budget but constantly feel like you’re failing? I got news for you – you’re not alone. You might think the problem is your terrible budgeting skills but it’s not. There is much more mischief afoot that … Read more
What’s the Value of Money?Money is something you use every single day. It either comes in the form of a piece of paper or a plastic card that you use to buy groceries and pay your bills. It’s almost impossible to live without. When you think of money … Read more
What You Can Do to Prepare for HyperinflationHyperinflation seems to be the new buzzword du jour. Whether it’s the sharp rise in your crypto portfolio or reading comments made from the likes of Jack Dorsey, you might be wondering if there is some truth to the rumors that hyperinflation is right … Read more
