How to stop food costs from eating up your budget
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[July 19, 2021] By
Chris Taylor
NEW YORK (Reuters) - If you have a sneaking
suspicion that your food bills have been going up and up, you are not
crazy.
In fact you are probably absolutely right.
Just ask Hollie Pollard. The freelance virtual assistant from Toronto
has been astonished every time she walks into the grocery store.
“I went to get a steak last week, because it’s grilling season and I
wanted to do a nice BBQ,” said the 57-year-old. “Then I realized it was
almost 50% more than what I was paying last year."
Pollard bought chicken instead.
All told, Pollard estimates her grocery bills have gone up by around a
quarter since the start of the pandemic.
Indeed, food prices keep edging higher. In the United States, for
example, food costs (including both at home, and away from home) are up
2.4% in the last 12 months, according to June numbers from the Consumer
Price Index.
Break it down into categories, and some of the year-over-year unadjusted
numbers are pretty eye-popping. Bacon: up 8.4%. Milk: 5.6%. Fresh fruit:
7.3%. Lettuce: 5.1%. Fresh fish: 6.4%.
GOBBLING UP BUDGETS
Given our extraordinary more than 15 months of pandemic, it is not
surprising that food prices have been affected. Supply chains around the
world are disrupted, and workforces are in turmoil because of the
ongoing global pandemic, which has affected prices on store shelves and
in restaurants.
That means people need to rework their monthly budgets. When Personal
Capital, a popular investment website and app, surveyed professionals on
their top spending categories, the single area that got the most
mentions: groceries. That was true of every demographic, from
millennials to Gen Xers to boomers.
An analysis of user data by Personal Capital shows that groceries
accounted for up to 15% of individuals’ monthly spend during the height
of the pandemic, compared with only 7% pre-pandemic, according to Craig
Birk, Personal Capital's chief investment officer.
When Personal Capital asked people where they tend to overspend, the No.
1 category was dining out, at 39.1%. No. 2: Groceries, at 32.2%.
Of course, there are a few ways to minimize the food-cost damage, but
you have to be thoughtful and deliberate about it.
Here are some ideas:
PLAN AHEAD
The more times you visit the grocery store, the more chances for you to
impulse buy and get whatever catches your eye. That is why Hollie
Pollard does the work of planning her meals a couple of weeks in
advance. She makes only a couple of major shopping trips per month – and
bulk buying helps reduce her overall bills.
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Gala apples are for sale at the B&B Fruit Stand in East Wenatchee,
Washington, U.S., September 2, 2018. REUTERS/Lindsey Wasson/File
Photo
MAXIMIZE YOUR REWARDS
If you have to pay more for food, at the very least you can boost the rewards
you get for doing so. “You’re missing out on savings if you’re not paying with
the right credit card,” says Trae Bodge, a smart shopping expert and founder of
the site TrueTrae.com.
Bodge recently used GigaPoints, a credit card tool, to analyze spending and
learned she could have earned almost $2,000 more in 2020 with a different credit
card.
"Since my family and I spend the majority of our money on food, GigaPoints
recommended American Express Gold," Bodge said. "Now we earn four times the
points on food purchases.”
FIND EVERY DISCOUNT
This might sound labor-intensive, but it actually is not. “If you’re shopping
in-store, be sure to join the loyalty program so you can receive exclusive
discounts and earn points toward free food,” says Bodge.
In addition, she recommends a savings app like Dosh: You pair it with your
credit card, and when you check out with that card, you automatically earn cash
back if there are available offers on the items you have purchased.
Another tip: shop online without looking for savings. Bodge recommends using the
browser extension from Coupon Cabin.
"(It) alerts me to available cashback offers and coupons as I browse,” she says.
RETOOL YOUR BUDGET TO COMPENSATE
If the harsh reality is that your grocery bills have shot up, you may need to
look elsewhere in your budget for places to trim.
Since Pollard’s grocery costs have risen to around 15% of her monthly budget,
she decided to cut back on eating out to just once or twice a month.
"If there’s anything I know, it’s how to grocery shop and save money,” says
Pollard. “And I have had to use every single one of those skills to keep my
grocery bills from rising even more than they have.”
(Editing by Lauren Young and Dan Grebler; Follow us @ReutersMoney or at http://www.reuters.com/finance/personal-finance.)
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