One of the most common financial questions out there right now is, “How can I quickly reduce my monthly spending?” That’s a great question to ask, and one that shows you’re getting on the right track financially. But the answer usually surprises people.
Becoming a more efficient and thrifty food shopper is the quickest, easiest and most impactful way to improve your bottom line every month.
Here are a few reasons why:
1. Of all your “fixed” expenses, food is the most pliable budget item.
Everyone has to eat. You also need a place to live, transportation, clothes to wear, utilities for heating, cooling and showering, and most of us are much happier if we can turn on “The Bachelor” or “Glee” after a long day at work. But of all those expenses, cutting food costs can result in the biggest bang for your buck.
Think about it: Maybe you could refinance your mortgage or negotiate with your landlord, but for most of us our housing expenses are going to stay relatively fixed at least for the short term. You can adjust the thermostat but dramatic savings (more than $300 a month) on utilities can be hard to come by. You can stop buying clothes but most families don’t really spend all that much on clothes anyway. You can get a cheaper car, but that’s going to take some research and the time involved in selling your current car. Which leaves food. Food is an expense you can cut dramatically today.
2. Most of us spend way too much on food.
You don’t think you do, but you do. I know, I know, your budget shows you allocate only $200 a month for your family of four. You’re scrimping! Really? I would venture to guess you are spending much, much more. Track what you spend for the next 30 days on all food purchases at the grocery store, restaurants, fast food joints and coffee bars. Most families are spending three to four times more than what they think they are.
3. You can get healthier by spending less.
Squeezable yogurt in a tube. Mini bottles of chocolate milk. Tiny lunch-bag sized cups of ranch dressing. Twinkies. Sugary breakfast cereals that your kids demand because they saw them advertised on TV. YOU DON’T NEED THIS STUFF. IT’S BAD FOR YOU. IT IS OVERPRICED. Shop sales, use coupons, focus on staples (try buying pasta, tomatoes, basil and ground beef instead of a “helper” mix) and avoid overly processed foods as much as is reasonable. You don’t have to take away all the treats, but limit them by all means.
4. You can quickly save $300-$500 a month.
I don’t know of an easier way to put $500 in your pocket (or your emergency fund) than to spend less on the food you already eat every day.
So what have you done to reduce your monthly spending? Have you tried cutting your food expenses, if so, how?