There’s no way to sugar coat this. Before our turnaround, we spent a ton of money on food- well over $1000 a month. Coffee shops, bars with friends, eating at restaurants twice a day, convenience foods from luxury supermarkets… if the game was spending money, we were winning.
Every weekend was another celebration, and most of our socializing was done at restaurants. Our circle of friends revolved around restaurant hopping, and we all considered ourselves ‘foodies’. When we weren’t driving 50 miles to sample some new expensive restaurant, we were going bar hopping, paying exorbitant costs for rounds of watered down drinks.
After long workdays at the office, we always came home tired and hungry, and neither of us wanted to cook. Plus, we weren’t actually that good at cooking! So, nearly every night we headed out to another restaurant. It’s no wonder there was a time when there was 60lbs more of me to love… more on that in a future post!
To turn things around, we had to once again change our behavior. We both needed to learn to cook things we actually enjoyed. We needed to study menus at different restaurants and try reproducing recipes at home. My wife was better than I was- I still needed to improve at the basics: chopping vegetables and learning to properly load a dishwasher. So many small obstacles keeping us from saving money.
To help get the ball rolling, we gave ourselves a larger grocery budget to compensate for the restaurant reduction, and limited ourselves to eating out about once per week. This meant cooking on the weekends and making enough food to take with us for lunch at work. We had to learn what our weak spots were, and protect ourselves from them.
For example, we needed to keep frozen pizza and similar go-to items on hand for those times we were in a pinch and not in the mood to cook (thank you Frugalwoods). If we had to resort to that more than once a week we knew we had more work to do. We also keep Soylent in the fridge for a grab and go lunch when we fail to do our cooking for the week. Neither of us particularly love the bland flavor, so it is further incentive to remember to prepare meals before the workweek begins!
This Was Not Easy
Let me clarify something here. This process was NOT easy. Of all the habits we’ve changed over the years to become more financially fit, this was the hardest. Described above, it might sound like I simply enacted the plan and then suddenly we were saving money. This couldn’t be further from the truth- this took a lot of practice, patience, and teamwork.
So no, I didn’t enjoy spending my weekends on meal planning and cooking. Especially when we were newbies and prep took twice as long as planned and we made a mess. I value my limited free time, and I understand the convenience of restaurants. But I couldn’t stomach the costs, and I knew that eating out every day is unsustainable (unless you plan on working the standard 45+ year sentence).
But we soon realized that the more we practiced, the better we got, and the more streamlined the entire process became. Now, we enjoy cooking at home, having healthier meals, composting for our garden, and saving money. We also enjoy having more frequent date nights at home, where we mimic our favorite restaurant menu items for pennies on the dollar. I actually prefer our cooking to most chain restaurants, whose food is often bland, overcooked, and over-salted.
How much did we end up saving here? Before the turnaround, we were spending over $1000 a month on food. This included restaurants, bars, coffee shops, grocery stores, everything food related. Within two months of making the changes above, we were down to about $600 a month. But we still had room to improve.
Choose Your Supermarket Wisely
We soon realized that as a larger and larger portion of our food bill moved from restaurants over to grocery stores, our choice of supermarket made a huge difference. Take a look at this list of grocery items, and the price variations from store to store. I visited each of these stores to gather these prices on 1/28/17. When brands differed, I chose the most similar lowest cost choice:
This is a HUGE variation! If you think all grocers charge roughly the same prices for the same products, think again. From this chart, we can see that on average, Lucky's and Publix are around 60% more expensive than Aldi, and Walmart is about 30% more expensive. Let’s discuss these supermarkets:
Lucky’s is our new organic luxury grocer. Picture them like a trendier Whole Foods Market. It is nice to have one nearby for one-off luxury items, but I would never do my regular grocery shopping here. The best way to shop at Lucky's, in my opinion, is to just go for the weekly sales, where they are often the loss leaders, but don't buy anything else.
Publix is the supermarket I grew up with. My parents would always take me there as a child, and I have fond memories of the place. They are always super clean and have a huge selection, as well as amazing deli sub sandwiches. They are slightly less expensive than Lucky’s. Before the turnaround, this is where we shopped every week for all our groceries. I never really noticed all the unnecessary luxuries embedded in the cost, such as employees walking your cart to your car and loading it for you.
Walmart has a huge selection of groceries and relatively low prices, but not the best shopping experience. At our local Walmart, the aisles are crowded, the lines are long, and the parking lot is full- seemingly 24/7. We tried shopping here for a few weeks but it just wasn’t a pleasant experience. Then we found Aldi.
The $3 Rule
Aldi is the store that cut our grocery spending in half. I had written it off years earlier when they opened their first store in town. They were small, had less selection than the luxury supermarkets, and didn't have a fancy vibe. The old Joel saw this as a let down. But what did he know?
Nearly every item we buy here is less than $3. Compare that to Publix where most items were over $3. Each week, we play a game where we see if we can make every item in our cart $3 or less. We call it the $3 rule. Sure, they have expensive luxury items as well, but the basics are super cheap. We usually round out our weekly grocery bill at around $40, with only one or two items breaking the $3 rule. (Disclaimer: we are a family of two, don’t eat much meat, and choose our items carefully. Your results may vary!)
I should mention that at stores like Aldi, you are giving up many of the ‘full service' luxuries you get from other grocers. No one will help you load groceries into your car. There's nobody to bag for you- in fact, you have to pay for bags. There are no free samples and no full service bakery, deli, etc. There's no service counter to buy stamps. It is so efficient that at any given time, there's probably no more than 3 or 4 employees in the entire store. It is this efficiency that cuts my grocery shopping bill in half every month, so I'll gladly take the reduction in luxuries!
What if you don’t have an Aldi nearby? How do you figure out where to buy what? Until we learned the basics, we kept a list of items we purchased regularly, like the ones in the chart above. Every time we’d go into a store, I’d do a price check on these items, and write down the price per pound or per ounce. I wouldn’t just note down the cheapest prices I saw, I would write down every price. After a few weeks, I’d start to get a range of variation.
I now know the luxury stores can charge over $2.00 for an avocado, but I only buy when they are less than $0.75 each. I know where to buy and what season. This may sound like a horrible chore, but just as with cooking, things got more efficient over time. The hard work pays off. And hard work is one of the core principals of mustachianism!
So what did we end up saving when all is said and done? After switching from Publix to Aldi, we were able to reduce our grocery shopping down to $200 per month. Add in another $200 per month for restaurants and other miscellaneous food purchases, and our total monthly food spending is now about $400 per month, down from $1000. That’s $600 a month saved, or over $7K per year.
Let's add this to the $2000 per month we accumulated by reducing our recurring bills and shopping expenses, and we now had $2600 a month in our savings snowball. But we weren't finished yet! We still had more work to do to achieve an 80% savings rate… on the next Financial 180.
Interested in starting your own Financial 180? You've come to the right place. The math is easy: create a gap between what you earn, and what you spend. If you can save half your income, your working career will only be around a decade long! Want to shorten it even more? Read on to see exactly what expenses the wife and I cut from month to month. Track your progress against the milestones of FI, and gradually build up your own savings snowball. Check out the books and links in our resources section and jump-start your journey to FI. The you ten years from now will be glad you did!