When it comes to setting a budget, food expenses are very unique, as the amount we spend to fuel our bodies can vary drastically amongst households depending on the types of food we choose to consume, where we choose to purchase our food from, where we live, and what produce is currently in season in our region. I recently wrote about my financial goals for 2017, one of which was to reduce our food expenses by at least 53%. This is going to be my biggest challenge for 2017. In 2016 I became too comfortable with a higher income and more money in the back. I became lazy when it came to preparing lunches at home the night before, and I indulged in more high-end restaurants, which were unnecessary. The irony is that I had intended to reduce our food expenses by subscribing to a weekly meal subscription service and cook dinner at home more often, but in reality, my expenses more than doubled. When I first analyzed my 2016 expenses I didn’t feel that bad about our family’s average cost per meal per person being $4.47, I knew it was on the higher side and there was room for improvement, but it wasn’t until I compared the numbers to 2015 and 2014 that I realized we previously averaged around $2.53 or less per meal. The 2015 Bureau of Labor Statistics showed that the average American household spent $7,023 a year of food, and in one year I went from being below the average at $5,500 a year to well above the average of $9,800 a year. I knew I had gone a little overboard on restaurants but I didn’t realize how far off I had gotten.
I believe there are two main factors that lead to the significant increase. First, I started working in downtown LA where the average cost for eating out for lunch is between $9 and $14. Near my previous office, I could eat at local Mexican joints for $2 to $5 per meal. It took me about five months to realize how much more I was spending on gourmet food trucks, over-priced Poke bowls, and kabob plates. The second factor was a shift in our behavior from using a subscription food service. Once we finished our three dinners per week through the subscription service, we would end up going out for dinner more often rather than make a trip to the grocery store to cook another meal.
Let’s take a look at how out of control our food expense has gotten with a few graphs:
Above: The red sections of the bars represent restaurant spending while the light blue areas represent groceries.
Above: Spending by category 2015 vs 2016.
As you can see our grocery expenses went up by 20.8% from $2,936 to $3,547 by including the weekly meal subscription service which averaged $10 per person per meal ($60 a week) in addition to a smaller amount of groceries for breakfasts and snacks. Our restaurant expenses increased by 287%. In 2015 we had spent $1,697 on restaurants compared to $4,883 in 2016. I also realized that there were 29 days throughout the year where we spent more than $50 a day eating out. Those 29 days accounted for a total of $2,592 or 26.4% of the entire year’s food expenses.
I started sharing with a co-worker of mine about how far out of control I had gotten with my food expenses. I had confided in him because I knew he was a tightwad when it came to spending money on food, but I didn’t realize how much cheaper his food expenses were until we started talking.
I found out my coworker budgets no more than $140 a week for all groceries to feed his family of five. This includes laundry detergent, cleaning supplies etc.. Their average cost per person per meal is less than $1.33 over the course of a year. His family is not some sort of starving anorexic family either, he is an ex-professional football player who works out rigorously every day and could probably bench press my little Prius without breaking a sweat. His entire family is big yet very athletic, and I can only imagine that they burn a massive amount of calories per day.
I pestered him with questions as to how he has been able to successfully stick to such a strict budget of $7,280 a year for a family of five. We talked for over an hour and he broke down his entire grocery strategy for me.
The key is self-control and a willingness to take the time to do your research.
Pick four or five grocery stores in your area and identify what types of food they provide the best prices on. It turns out most grocery stores announce their weekly specials online every Wednesday morning. This is most useful for purchasing protein such as beef, chicken, pork, salmon, and shrimp which are usually the most expensive ingredients when cooking. It is best to buy your proteins such as these when they are on special. Buy more than you will need for the week and freeze the excess. If you need to purchase protein last minute, you will most likely have to pay a premium because the likelihood of it being on discount when you want it is low. The five grocery stores he utilizes are a local Mexican grocery store, Trader Joes, Sprouts, Ralphs and Vons (also known as Pavilions).
The local Mexican grocery store and Sprouts are the two primary grocery stores utilized in his strategy. They both provide some of the best deals on local produce and nuts at the lowest prices. On occasion, they will also provide the lowest prices on meats (beef, pork, poultry, & seafood), but only when there is a weekly special in play. Sprouts also has a spices section where you can measure out just the right amount of spices you need and are able to put together your own unique spice blends for fairly cheap. (Indian and Mediterranean groceries are also good sources for buying spices for dirt cheap).
Trader Joes is his third source for good for produce, but their selection is much smaller. They provide the best prices for eggs, yogurt, and juices. Pre-made salads may seem fairly cheap at $3.99 each, but it’s better to not be lazy and take 10 minutes out of your week to buy the ingredients and make your own salad which will give you at least four times as much food.
Ralph’s is good for purchasing meat, but only when they present great deals on the weekly specials list.
Von’s runs a weekly $5 Friday list of items that are often great value.
All pre-packaged food is out. Stick to produce and healthy carbohydrates like rice for your staples.
All of the information above seems very much common sense, but it sometimes takes a real hard kick in the pants and self-reflection to remind yourself no to be lazy or it will cost your dearly.
For 2017, we are going to get back to basics and stop being lazy. The first step will be to cut our subscription meal service, it served our family well and I am not regretful for using the service. I learned a lot of new culinary skills that I never knew previously, and our family was introduced to a wider variety of seasonal produce and spices we had never tried before. The second step will be to utilize the 156 recipes we now have from the subscription service but we will source all of the ingredients ourselves through local grocery stores. Lucky for us we have Sprouts, Trader Joes, a Mexican grocery and Mediterranean grocery store all within walking distance.
The meal subscription service cost was $60 per week and provided us with 3 dinners for two people, or 6 meals. I believe we can source the ingredients ourselves to produce 3 to 4 dinners a week at a cost of $40 to $55 per week, however, we should be able to produce 12 to 16 meals instead. That will provide our family with plenty of leftovers to take to work every day for lunch and reduce our average cost for dinner and lunches to $2.81 to $3.75 per person per meal. Breakfast consisting of two hard boiled eggs and half an avocado will average about $0.52 per meal. Between breakfast lunch and dinner our average cost per person per meal should be reduced to $2.67 if we are able to stick to this plan.
From time to time, I’ll post our grocery lists along with the meals we plan to make for the week. Hopefully, this practice will help me to stay on track with this goal.
Readers, do you know how much you are spending on food each year? What strategies do you use to keep your food expenses in check?