August 28, 2018
It’s time to tackle another big area of spending – food!
Hopefully we can help cut some fat in this area, providing a boost to your savings rate. And as with our spending as a whole, the lower it is, the less investments we need and the sooner we can become financially independent.
Since frugal folks tend to spend a bit more time at home versus their restaurant hopping peers, groceries are an important topic to cover. Especially because what we eat has a strong bearing on how healthy we are and how we feel too.
So let’s get stuck in…
In the beginning, we were spending around $150-$180 per week on food for 2 people. So my belief was that food is indeed, expensive.
But now we spend half that amount! And this includes most of our dog’s food.
Despite the regular moaning from the media, grocery prices have been declining for a number of years now.
For example, a Wesfarmers (owner of Coles) presentation in June, saw the company tell shareholders:
“Coles continues to invest in price, (with) over 8 consecutive years of price deflation”.
The supermarket price-war is real. And it hasn’t gone away yet. In fact, with Aldi expanding and the prospect of its German rival Kaufland coming, food prices may even fall a little further. Not to mention if Amazon gets into the grocery business like it has in the US.
So, the ever-escalating cost of food is somewhat of a myth. Just like the cost of living.
Then comes the next complaint…
This deserves an entire post in itself, and I’ve noted it down for a future article.
Look, it can be. As with everything, things can cost as much we’re willing to spend. But to say there’s no way to eat a reasonably healthy diet without it crushing our savings rate, sounds like an excuse to me.
Good nutrition doesn’t have to consist of 100g punnets of blueberries for $6, pre-packed salads for $5.50 and superfood snack-bars at $4 each.
By the way, the superfood marketing trick, is just that. We seem to have an unrelenting urge for the new, the magical, and the one thing to cure our ails. To make us healthy, attractive and trendy all at the same time.
Don’t bother, it’s nonsense! Forget the fancy pre-packed rubbish. Instead, spend your money on real, whole foods that are just as filled with nutrition, just a little less exotic because we’ve known about them for 100 years.
OK, on to some strategy…
Without some type of food plan or rough idea what you’ll eat during the week, your grocery costs are destined to blow out.
Day-to-day shopping is not only a waste of time, but it creates extra driving, short-term thinking and impulsive unhealthy food choices.
It also means you lean towards the lazy options of pre-packed food, even ready-made food which is going to cost you an arm and a leg, while likely lacking in nutrition too.
So make a rough food plan for what you’ll eat during the week. Just a few good ideas for bulk dinners will do. Be repetitive.
The more you can plan out your meals for the week, the better choices you’re going to make. It’ll cost less. It’s healthier. And you’ll feel better for it. It’s also one less thing to think about. Job done!
Of course, because you’re planning these meals, you’ll be cooking them too!
And now that we’re getting organised and efficient, here’s where it comes together.
I really mean prepare your own food. Dice the veggies. Chop the salad. Cut the meat. Whatever it is. You’re now getting paid to be a chef!
Don’t believe me?
Think about it this way. By buying ingredients that’s already cut, sliced and diced, you end up paying quite a bit extra for it. But chopping it yourself means a lower grocery bill and more money in the bank.
See, you’re getting paid to prepare your own food!
It still blows me away if I see people paying a premium for things already cut up. Are you joking me? Unless you don’t have arms, this is ridiculous.
I’m not buying the “I don’t have time” argument. Rubbish! Especially considering Aussies still watch an average of 17.5 hours of TV content per week.
Your health is worth spending time on. So a little extra effort in the area of food will pay dividends, and we know how nice dividends are 😉
So far, we’re cooking and preparing our own food. The next layer of efficiency is getting those ingredients in a cost-effective way.
One of the best ways to do that is measuring cost per kilo, per gram and per litre. This is probably the next best habit of getting into at the shops.
Smaller items and packets may look cute and also carry a small price tag. But when measured on a ‘per gram’ basis, the costs are often obscene!
You know those tiny figures at the bottom of price tags – ‘$0.72 per 100g’. Use these as your guide.
Whether it’s coffee, spices, veggies, it doesn’t matter. Rather than look for the lowest total price, look for the best value. That’s the difference between being cheap and frugality.
The frugal shopper will happily pay more overall for a larger quantity today, based on saving more over the longer term.
The cheap shopper will simply go for the lowest total cost item, regardless of quality or value, making a short-term choice, based solely on the amount they need today.
Buying in bulk where possible is often a good way to get the best value ‘per kilo’ and ‘per gram’.
And buying a week’s worth of food allows you to plan better and cook in bulk. For us, we tend to cook up big meals that is enough for 2-3 days. This saves time, automates your nutrition and reduces power and gas costs.
For most people, they’ll buy at least a certain amount of home-brand/store-branded products. But for some products, they may be loyal to a premium brand out of habit, or tried the store-brand and been disappointed.
All I can say here is, try again. I’m serious.
Ten or fifteen years ago, store-branded products left much to be desired. In short, they were pretty crap. But in recent times, stores have upped their game and really overhauled their own-brand products.
We probably used to buy around half name-brand items and half store-brand. Now I’d say it’s more like 80% or more, store-branded stuff.
Slowly we started trying the store-branded products and for the majority of things, there’s little difference in quality or taste, yet still a large difference in price. We’re still regularly trying store-branded items as they get rolled out and have been pleasantly surprised on a regular basis.
Keep in mind, Coles and Woolies also have a policy that if for any reason you don’t like their own products, just take it back for a full refund. And Aldi’s products tend to be very good, some of which they’ve even won awards for.
So there’s really nothing to lose and large savings to gain!
The stores don’t actually make their own products anyway – they outsource them. This means that quite often, the name-brand stuff and the store-branded stuff are made in the same factory!
Surely everyone can agree that when something you buy is on special, you buy more of it, right?
Well, I hope so!
Usually, a good approach is stock up as much as you think will last you until the next time the item goes on special. These things tend to be somewhat predictable, as you may have noticed.
That’s because it can make a huge difference to the overall cost of your groceries. And it’s something I take seriously.
Well, here’s a little story and you be the judge…
Since we do most of our shopping at Coles, we have a flybuys card and are regularly receiving offers by email.
Sometimes the offer will be like this: Spend $70 per week for 4 weeks at Coles and get 10,000 bonus points.
Now for those unaware, each 2,000 points can be redeemed for $10 off your shopping at Coles (or certain other shops). So this offer is essentially $50 cash for spending $280 on groceries. Pretty good. But it gets better.
Because we both signed up, we each get similar deals. So double it. Spend $140 a week for 4 weeks and get 20,000 points, worth $100.
But our shopping at Coles is probably only half that each week, since we get a bit of stuff from Aldi too. So what to do?
Well, it’s easy. All you do is bring forward your future purchases. Essentially, anything that stores well and you normally pay full price for anyway – just buy multiples of it.
What’s the limit? Whatever you can store in your house for as long as the food or products will keep!
This is what we did recently, buying $560 worth of groceries in a few weeks to get $100 flybuys dollars for future groceries!
As evidence of how stocked up we are, here’s what we’re storing currently…
— 56 cans of sardines (for our dog)
— 24 cans of beans (cannelini, kidney and chickpeas)
— 10 bags of frozen veg (broccoli, peas, corn, baby green beans)
— 7 bags of frozen fruit (blueberries, mango, strawberries)
— 4 jars of coffee
— 8 tubs of butter/spread
— 17 packets of peanuts
— 4 packets of all muesli supplies (oats, shredded coconut, pepitas, sunflower seeds, dried apricots, dried dates)
— 85 rolls of toilet paper
I could go on. But these are the best examples. Haha yes, I’m that guy!
These are all examples of food that we normally pay full price for. So all we’ve done is bring forward the purchases without increasing the cost. And now we’ve got $100 of future grocery money!
For other foods that are still much better value at Aldi, we’ll typically ride our bikes there once a week and grab what we can.
We’ve been gaming this system for quite a few months now. Rather than lower prices further, it seems that the likes of Coles and Woolies are trying to lure us in with loyalty programs like this.
Another strategy is to simply substitute or switch to foods that are similar yet offer better value.
Things like frozen berries vs fresh. Lower priced cuts of meat. Peanuts vs almonds. Apples and oranges instead of mangos (for non-tropical states). And a house deposit instead of avocados. Haha just kidding with that one, avocados to eat at home are fine. But be careful, in many places they’re still stupidly priced.
Often we’ve found frozen fruit and veg to be just as fresh, if not better than the fresh stuff. Typically it’s frozen at a stage of freshness anyway, whereas the store stuff might be a bit old.
To boost savings, try to change your habits over time by moving to lower-cost foods to get roughly the same taste and nutrition.
This is a contentious issue. Some people will be unwilling to alter their meat consumption.
We used to be quite heavy meat-eaters, myself especially. And I was damn sure not looking to make any changes. But over the last couple of years, we did change our diet to focus more on other foods.
The primary reason for this was seeing a few documentaries (which I can’t remember now) on where our food comes from. And also doing further research on farming practices and the way animals are treated (hint: appallingly). Being an animal lover, it was hard to watch and although I tried to shrug it off, eventually it really got to me.
I couldn’t ignore what I’d seen anymore. And after becoming more interested in health, it was clear, the longest living people tend to eat a plant-based diet with very little animal products.
Anyway, it wasn’t an overnight change.
We first tried vegetarian meals – say a curry with beans or tofu for protein, instead of meat. I was surprised that it was just a different texture, but tasted the same. Then I realised, it’s how you flavour food that makes it taste good or not!
Combine these new outlooks with the realisation that eating less meat is massively better for the environment and I became compelled to push on and feel good with the changes.
Also, while not given a single thought at the time, it ended up slashing our grocery bill!
So if for no other reason, consider doing one vegetarian meal per week. Then try one day per week. And see how you go from there.
Now we eat a mostly vegan diet, and our optimised grocery bill went from around $120 per week, to around $80 per week. That actually surprised me. So it’s probably fair to call this our unfair advantage!
We also feel better about the food we eat and have more energy in general.
I don’t want to bang on about this too much. But it’s been such a great choice from lots of angles, so I felt compelled to share.
Amusingly, when people learn you don’t eat meat, the first question is “well, what do you eat?”.
Basically everything else, is the answer! But what they really mean is, what do you substitute for meat in dishes and how do meals still taste good?
What does a plain boiled chicken breast taste? Well, not much really. It’s when you start adding other things, that stuff starts tasting good.
For protein in curries, stir-fry’s and other dishes, we use beans, lentils or tofu as the protein source. And it works pretty well, absorbing all that flavour from spices, seasonings, oils and sauces.
Here’s roughly what a day of food looks like for us…
— Morning: A nice, strong coffee. I use a french-press.
— Mid-morning: Home-made muesli with the ingredients from earlier and soy milk (the packet muesli is far too sweet for our liking).
— Early afternoon: Salad with peanuts or home-made vegetable soup (cooked in bulk of course) with greens and herbs from the garden.
— Late afternoon: Fruit smoothie with soy milk, banana, berries and protein powder.
— Dinner: Lentil/Bean/Tofu Curry with vegetables, herbs, spices.
— Snacks: Other fruit. Nuts. Home-baked sweets that we shouldn’t be eating!
That all looks pretty healthy. Plenty of vitamins, minerals and protein. But don’t get me wrong, we do eat some junk too!
One of my favourite meals is a stacked plate of fried hash browns and baked beans on a Saturday morning. And I also devour toast with honey or jam on the weekends, alongside my caffeine fix.
Admittedly we now have the luxury of spending a little more time on preparing food than before we retired. While we were still at work, we’d likely have 1 less meal per day, but bigger serves, or we’d double up and eat leftovers for lunch.
I’m quite the creature of habit so I have no issue with eating the same stuff regularly. Actually I enjoy it!
All we need is a good list of dishes to rotate through for dinners, with breakfast and lunch mostly on auto-pilot.
This is one of our extremely un-frugal habits. We mostly get our weekly shop delivered these days. And I actually think it can save you money. Hear me out…
I hate going to the shops. It’s always busy, there’s too many bright lights and people and noise – it’s just not fun anymore. So we tried delivery which is $4 with Coles and it’s been great.
Prices are exactly the same and there’s never been a mistake with our orders.
It saves us around 1.5 hours per week, cuts down car use and avoids an unpleasant experience.
We also tend to buy only what we need, rather than what we see and then think we need. In short, we have a list, and with a few taps it’s all ordered. No unnecessary extras!
I recommend trying this out, if delivery costs are low in your area. Do it right and you’ll come out ahead.
The time saved can be spent on planning and preparing healthy meals with whole foods, instead of short-cutting nutrition or paying a premium on the pre-cut, pre-packed stuff to save time.
If you have the space or the interest, you can try growing your own food too.
Start off with the simple stuff like a few herbs or greens. This stuff alone can save you a surprising amount, as detailed well in this post by Pat the shuffler.
Then you can move on to small fruit trees or a little veggie patch and scale up from there.
Although it’s sometimes not cheap (feels like we’re always going to Bunnings), the main benefits are fresh produce, a connection with nature, and a productive hobby that can be cost neutral, while providing exercise and a happiness boost.
As stated earlier, our cost of food has essentially been cut by 50%. Half the benefit came from optimisation, and the rest from the diet change.
In dollar terms, this has translated to savings of around $80 per week. Invested at a return of 8% per annum, means we’re around $60,000 richer after 10 years.
It also means that because our expenses are $4000 lower each year, we then needed $80,000 less in investments to retire.
This was a monster of a post, because clearly there’s many ways to optimise this category of spending.
And it’s how you approach these things that makes all the difference.
Whether you decide that it’s too hard and it’s another one of life’s categories that is doomed to be expensive.
Or whether you seek out the challenge of gaming the system. Thinking how to get the most nutrition for the lowest cost, to further fuel your growing pile of investments.
Often the answer to that is plant-based eating with some protein content.
Now it’s your turn!
Remember, this area deserves special attention. So get started putting some frugal food habits into place, and reap the rewards of increasing health and expanding wealth, at the same time!
I’ll leave you with a parable that you may or may not have heard before. And think about how well this fits with frugality and financial independence…
Two close boyhood friends grow up and go their separate ways. One becomes a humble monk, the other a rich and powerful minister to the king.
Years later they meet. As they catch up, the minister (in his fine robes) takes pity on the thin, shabby monk. Seeking to help, he says:
“You know, if you could learn to cater to the king you wouldn’t have to live on rice and beans.”
To which the monk replies:
“If you could learn to live on rice and beans you wouldn’t have to cater to the king.”