Today Happy Simple Living is fortunate to have a terrific article written by Jacob, author of the popular blog My Personal Finance Journey. Jacob says he enjoys writing about finance in order to help others, and we connected via Yakezie, one of the world’s largest networks of personal finance and lifestyle blogs. Yakezie’s community members are encouraged to collaborate and support each other’s efforts. This month, select Yakezie participants were paired up to exchange guest posts on each other’s sites, and the topic is, “What is your best day-to-day money saving tip?” You can also read my essay, “7 Painless Ways to Save Money: Reap All of the Gain with None of the Pain” on the Personal Finance Journey blog today. Here’s Jacob’s posting:
Saving Money On Food & Drinks
When I was informed that the topic of the 2nd Yakezie blog swap would be to share our most effective money saving tip we employ on a daily basis, I immediately knew what my answer would be.
The answer is simple. I save big money on food and even bigger money on drinks! How do I do this and how much do I save, you ask? These ideas will be the topic of this post!
Before we get started on sharing my tips on how to save money on food and beverages, I want to address the question about just how much you can save by reducing the amount of eating/drinking out you do.
Up Against The Averages
The average cost per meal (included tax and tip) for one person eating out is $17. Obviously, this varies depending on where you live. But for now, we’ll use that as the average for our analysis.
How Do The Totals Look?
According to UCSD Nutrition Link, Americans eat out an average of 4-5 times per week. Assuming the frequency value of 4 times per week, this equates to $68 per week, or $272 per month. This is incredible!
According to a report from the USDA in 2007, the average monthly per person cost on groceries is $112.
In looking at these numbers, it occurred to me that I am clearly spending more on groceries every month ($200 is my average grocery bill per month), but since I am only averaging eating out once per week (total eating out bill of $68 per month), my overall food cost is greatly decreased.
Let’s put this in to plain English, shall we? My monthly savings over the spending schedule above would be $272+$112-$200-$68 = $116. This equates to saving $1,392 per year!
If instead of spending that extra $116 each month on food, I invested it in my Roth IRA in an index mutual fund averaging 10% return from now (at age 25) until the age I retire (age 67), it would be worth $748,000 due to the miracle of compounding interest.
As you can see from this example, it is clear that there is a lot of potential for accumulating wealth with this money saving tip alone.
So, let’s take a look at some of the things I do to save money on food and beverages.
Money-Saving Strategies for Food and Beverage Purchases
1) Purchasing $3 Bottles of Wine
This potent strategy works wonders on relieving the strain on your pocket book. Every two months or so, while I am at the grocery store (I shop at either Kroger or Wal-Mart), I stock up on approximately 8-12 bottles of $3 wine. At Kroger, the brand I buy is Bay Bridge, and at Wal-Mart, the brand is Oak Leaf.
This is the type of wine that I drink when having larger get-togethers or am just eating dinner at home by myself and feel like a glass of wine.
For special occasions (one when I can really appreciate the wine), I have several “nicer” bottles of $10-$20 per bottle local Virginia wines that I drink. By employing this one method, I save most likely several hundreds of Dollars per year.
2) Only Purchase Wine at Restaurants on Special Occasions
At a restaurant recently, a bottle of local Virginia wine was listed on the menu for $45. The price to buy this same wine at the grocery store or at the winery was $15. This represents a 3X markup! Wow! Now that’s profit!
As it turns out, the average markup for bottles of wine at restaurants is 2.5-4 times the normal retail cost. Personally (maybe I am just plain weird), but I find it very hard to actually enjoy the taste of something when I know it is ripping me off from the inside out.
Therefore, unless it is special occasion and I have planned for it financially, I personally don’t buy wine at restaurants!
3) Never Go Out to Eat Alone
This is one of my favorite money-saving strategies, and it is so simple. Only go out to eat when you are going out with friends!
Think about it. If you’re like me, you probably eat 80% of your meals by yourself (including breakfast and lunches). By simply eating at home or bringing lunch to work with you, you can save tons of money if you just make it a policy to avoid restaurants/fast-food if you are by yourself.
After all, who wants to eat out alone at a restaurant anyway?!
4) Buy in Bulk and Buy Generic
At least once a month, I make it a policy to go to the local Wal-Mart to stock up on the bulk of my groceries.
Why? Simply put – no one can beat Wal-Mart’s prices when it comes to their generic Great Value brand. And, I bet you “name-brand” loyal shoppers out there would be surprised how good the quality of a lot of their items is.
While I am at Wal-Mart, I try to buy as much as possible of items that won’t go bad. Examples of these items include bagged cereal, oatmeal, pasta, canned beans, salsa, tortilla shells (I love burritos!), frozen fruit, etc.
5) Buy Frozen Foods and Canned Foods
The last money saving tip of today’s post may also be one of the most effective; I save big money by buying canned and frozen foods.
Even though canned and frozen foods do not taste quite as good as fresh foods, they keep for longer, can be bought in bulk, and are much much cheaper.
Furthermore, recent studies have shown that since frozen vegetables and fruits are picked and flash-frozen at the peak of ripeness (instead of when they are green so that they ripen while being shipped from Chile to California over a 2 month period), they contain a much higher level of nutrients.
Well – those 5 tips are the main ways I save money on a daily basis. Thanks to everyone for reading my guest post. I hope you can use some of these tips in your daily life to save money for your future.
How about you all? What strategies do you use to save big money on a day-to-day basis?