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Personal Finance

How to Save Money on Groceries

When you're looking for ways to save money, it's a good idea to start by reviewing your recurring expenses. It's easy to get so used to paying for certain things every month that you don't even think about how much those charges are costing you. Thankfully, saving money is often as simple as reassessing what's considered "essential."

Groceries are a classic example of this. You'd be surprised how much money you might save just by creating a grocery budget and sticking to it, as well as by making a few other budget-savvy moves. Here are some to get you started.

Set Up a Budget Before You Shop

There are three simple rules that will help you save money on groceries:

  1. Never shop when you're hungry.
  2. Make a list and stick to it.
  3. Set a budget.

The first and second rules are fairly self-explanatory. Shopping when you're hungry makes everything seem appealing, no matter the price (or the nutritional value). If you've eaten before you arrive at the store, even if it's just a little snack, you'll have an easier time staying focused.

Which brings us to your list. Shopping with a grocery list can rein in your impulse purchases, and make you less likely to forget important items. That means fewer trips to the grocery store and therefore fewer opportunities to overspend. If you share groceries with a partner or roommate, you may want to review the list together before you shop. Together, you can make sure you have all the essentials covered—and both of you can veto any extravagant products that may have been snuck onto the list.

But the most important rule is really the third one: Set a budget. By placing a limit on your grocery spending, you prioritize only what you need. Once your grocery budget is established, it'll give you more certainty in your broader household budget that includes expenses such as your rent or mortgage payment, utilities, insurance, groceries and other essentials. A budget enables you to live within your means and avoid accruing debt unnecessarily.

How to Create a Grocery Budget

Before you focus on groceries, you'll want to get an overall understanding of your financial situation. Start by listing out all of your monthly expenses, including essential and non-essential purchases (think gym memberships and streaming subscriptions) and then total them up. Compare that number to your income. If your expenses exceed your income, you'll need to do some budget trimming. Once you've taken care of the easier cuts, which are usually non-essential costs such as streaming subscriptions or restaurant meals, you can start to streamline your shopping by establishing a grocery-specific budget.

Your grocery store budget should include staples, such as:

  • Vegetables
  • Whole grains
  • Fruit
  • Water
  • Meat
  • Paper products
  • Toiletries
  • Cleaning supplies

If there's money left over after accounting for the basics, you may want to add items such as snacks, desserts or soft drinks.

Be sure to prioritize nutritious items, particularly ones you can use to stretch your meals, such as beans or brown rice. Oftentimes, these items are relatively inexpensive and you can add them to dishes such as soups or stews. Having nutritious staples around will make it easier to cook meals that keep you full longer, which reduces the temptation to make that pricey fast food run at midnight.

If you're not sure how much you should spend on groceries, you can view the USDA's official food plans. This resource suggests an appropriate food budget for your family size, age of your children and how flexible your overall household budget is. For example, a moderate-cost weekly plan for a family of four with two young children would have you budget about $213 every week for food.

Keep an Eye Out for Deals, Coupons, Sales and Rewards

The key to staying on budget is flexibility. After all, a budget that has you eating lentils every meal might save you a lot of money, but you'd quickly grow weary and ditch it. Before heading to the store, look online or check the mail for special weekly deals and coupons. You don't want to add things to your list just because they're on sale, but you might see a deal that allows you to mix up your typical shopping list.

You might also be able to swap out items on your list for similar products for sale at cheaper prices. For instance, maybe chicken breast is on your list, but chicken thighs are on sale this week. Or perhaps you planned to buy a bunch of kale, and heads of broccoli are available as a two-for-one deal. Maybe a premium brand of pasta has been marked down substantially, so you buy that instead of your preferred generic. Deals change week to week, and knowing what's on offer before you head to the store can help you save money and make your meals more interesting at the same time.

Depending where you shop, the store may offer a loyalty program that qualifies you for lower prices on certain items. These programs sometimes include additional perks, such as discounts on gas, that can save you money as well.

You can also earn cash back at the grocery store by using certain credit cards. A number of card options include increased cash back bonuses on grocery purchases, so you can actually make money in addition to saving by following a budget. Some store chains offer their own branded credit cards as well, and these often come with loyalty programs, discounts and other incentives, too.

If you're looking for a new credit card to use for grocery purchases, make sure to compare the terms on any offers you receive. Cards you open through stores often have lower rewards returns than conventional credit cards, so make sure to thoroughly read up on what you're getting with each. You'll also want to compare the interest rates and annual fees. Experian CreditMatchTM can help you identify cards that suit your rewards goals and credit profile.

Buying groceries with a rewards credit card can be a great way to save money as long as you're careful to stick strictly to your budget. When paying with a credit card, building up a debt and carrying it month to month can cost you more in interest than you earn with your rewards payout. The best practice is to buy your groceries with your preferred card so you can take advantage of the rewards or discounts and then pay off the balance immediately.

Regardless of how you pay, keep your budget in mind and be careful not to overspend or buy things you don't need simply to pursue a sale or cash back reward.

Shop Generic or Store Brands

One of the simplest ways to reduce your grocery budget is to choose generic or store brand products instead of brand names. You'll often find that the generic version provides the same quality (or better!) at a fraction of the price.

If you're worried about taste or quality, consider leaving yourself a little extra time at the store so you can compare the ingredient labels to see how they match up. You can also source recommendations from family and friends. Ask if they've switched to generics on any staple products and whether they noticed a difference in taste. Worst case, you'll simply go back to buying the name brand next time you shop.

There may be certain products you swear by, even if they are a bit pricier. You can make room for these in your budget by buying store brands for things you're less particular about (garbage bags, for instance) so you can purchase specialty items without straining your finances. Budgeting doesn't have to rob you of life's little pleasures, and building these allowances into your budget makes it much more likely that you'll stick to your plan.

Meal Prep Your Week

A meal prep routine can save you money by making your shopping more efficient and reducing the amount of food you waste. Meal prepping simply involves planning your meals for the week, making them ahead of time and freezing them or putting them in the fridge for later. It does require some time commitment to get the foods ready, but you can simplify the process by making dishes such as soups or casseroles that can cook while you're doing other things.

If you make meals ahead of time, you won't worry about having to throw away a bunch of spinach that wilted before you ate it or meat that's past its "best by" date. In the rush of everyday life, it's easy to buy meat and produce and forget about it until it's no longer good to eat. Making meals and freezing them means you won't be throwing away money, and you've got a healthy meal that's ready to eat as soon as you've defrosted it.

Buy Certain Products in Bulk

Once you adopt a meal prep habit, you may want to buy some items in bulk, especially things you use in a lot of your dishes. Bulk purchases can provide a better bang for the buck than buying smaller quantities of the same item, further supporting your goal of saving money on groceries.

Even if you're not meal prepping, you may want to check out stores such as Costco or Sam's Club, where many items are available in bulk. It's worth comparing prices on staples such as rice, flour and meat, as well as things like baby diapers or pet food that you go through quickly. If you have adequate storage space, you can save plenty by buying and storing a year's supply of something you know you'll need but doesn't go bad. For instance, you might be able to find gallon jugs of liquid soap for not much more than the little bottles you'd find at a grocery store. You may find you can save a lot in the long run by purchasing from wholesale clubs or warehouse stores.

Choose the Right Grocery Stores

If you're committed to saving as much money on groceries as possible, then shopping at several different stores may be the way to go. Your local grocery chain can be great for produce, small quantity items and specialty foods, with a wholesale club serving as your source for bulk buying.

Discount stores can also be a great source for food items and toiletries, in addition to things like candies, socks and other personal items. You may also want to check the holiday and gift section of your local dollar store when prepping for celebrations, because you can purchase greeting cards, wrapping paper and decorations at far less than you'll pay at a grocery store or craft shop.

Wherever you choose to shop, making a budget and sticking to it is a great way to keep your spending in check. Setting limits for yourself enables you to get what you need without straining your finances.