Take a big bite out of grocery bills

By MP Dunleavey

Editor's note: Join columnist MP Dunleavey and a group of women as they seek to strip away the myths around money, liberate themselves from debt and find financial sanity. Follow the ongoing quest of the Women in Red every other Wednesday in Dunleavey's column on MSN Money.

When I was a kid, my mother would sit in front of the television with a dinner tray in front of her, and she'd methodically go through all the supermarket fliers, clipping coupons and writing her grocery list in her meticulous, fine print.

I thought she was nuts.

Under Paragraph 967P of the Geneva Conventions governing the relations between youngsters and their parents, I found my mother's behavior strange and embarrassing, and I wanted no part of it. Ever.

Then a few decades passed, and I became a mom myself. Until recently I've been willing to make many lifestyle adjustments in the name of financial sanity, but cutting back our grocery bill wasn't one of them. Spending about $400 a month for two adults and a baby seemed just about right.

Then I started reading the Grocery Challenge thread on the trend-setting, ground-breaking, take-no-prisoners Women in Red message board and learned that a single mother of two had cut her bill from $700 a month to about $260.

Was there sorcery involved? Enron-scale accounting fraud? Was Mom right all along? I had to find out.

You are what you eat

Because food is an essential, it sometimes goes unchallenged as a spending category in many people's budgets.

You might groan inwardly when you see the total mounting at the grocery checkout counter, but for most hardworking, time-pressed people, it seems easier to cut back in other areas first: clothes shopping, cable services, vacations and other extras. After all, you have to eat.

But people may not realize that food is a substantial financial outlay for most Americans: about 13% of the average household's annual expenditures, according to a 2005 report from the U.S. Bureau of Labor Statistics. That includes about 7.5% spent on groceries at home and the rest on eating out.

Economists are quick to point out that because of numerous federal subsidies, Americans typically spend a smaller portion of their income on groceries than, say, most Europeans do.

But as I learned from the food mavens on the Grocery Challenge thread, living in the land of cheap grub is not a reason to become complacent. No, no! As these savvy shoppers will tell you: If you think you got a certain item for a great price, rest assured there's a way to get it even cheaper -- or maybe even for free.

The ugly myths of coupon clipping

Do you have to become a wild-eyed coupon clipper to slash your grocery bill, stuffing your car with stacks of supermarket fliers and driving checkout clerks bonkers with your wallet of wadded 50-cent-off vouchers?

Will your diet start to revolve around Hamburger Helper, dented cans of beans and stale coffeecake?

Not at all. In fact, people who choose to be frugal about food aren't necessarily in financial straits -- nor do they sacrifice their quality of life or their quality of meals.

"About a year ago I looked at our $700-a-month grocery bill, and I was horrified," says Sue McDermed, a mother of two who lives in Southern California. "It was our third-largest bill, and I thought: I can do better than this."

She challenged herself to cut her family's food expenditures, she says, as part of a bigger financial rethinking of her own goals and priorities. Yet she doesn't compromise on quality, usually buying as much by way of organic and natural groceries as she can.

Sharon Lustro could teach Warren Buffett a thing or two about buying low. She typically spends about $30 a week on groceries, she says, often leaving a store having paid no more than a dollar or two for a cartload of goods.

Lustro, whose household income is about $125,000, also does it more for the principle of the thing and because she prefers to invest her money in traveling and her children's education.

"I've seen so many people go into debt so needlessly," she says. "I knew one family that earned about $200,000 a year, and they had to declare bankruptcy. It's your day-to-day habits that get you into trouble -- what you eat for lunch, what you buy for dinner."

Lustro says she spends less than two hours a week organizing and shopping -- and her children will graduate from a top-notch college with no student-loan debt.

Continued: Coupon strategies

 1 | 2 | next >