How We Cut Our Food Spending by 70%!

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If you are serious about early retirement, you will have to optimise your spending in all areas, that includes food!

As Monkeyism is about quality of life, however, the goal is not to spend as little as possible on food. Rather, the goal is to reduce the cost as much as possible while maintaining a high quality diet.

That will allow you to reach financial independence earlier while also preparing the basis for your future lifestyle.

Spending less is important but not at the cost of your health. So be sensible where you make cuts, otherwise it will come back to haunt you later. Consuming low quality food may mean small savings now but could get expensive later in terms of medical costs and health insurance. Look after yourself!

Where to Get Cheap Groceries?

1. Grow your own food

The cheapest high quality food you will find is always home-grown and home-made. Ideally, this means having a garden or orchard in which you can grow your own vegetable and fruit, maybe even raise small livestock.

This is one of our ambitions: To one day leave the city for a more rural location and lead a homesteading lifestyle. That would enable us to control the whole food chain and eat healthily, while also saving a good amount of money. We plan to have an active early retirement and think this is one great way to use our time!

Of course not everyone has access to a garden – In fact, I don’t remember the last time I had the luxury of a rental with a green patch in Sydney! But, there are other options. Why not try a community garden? It’s a great way to access fresh products and meet like-minded individuals.

I also recommend “fresh from the farm” seasonal vegetable boxes. These cost as much as grocery store shopping, but are seasonable and fairly priced. They are fresh from the farm and you always know that they are as fresh as they can be.

2. Find the best deals

If none of those things suit you, then there is a multitude of grocers and supermarkets to choose from. Asian fresh markets and stores seem to always offer attractive prices. Because they are usually highly concentrated in community areas (e.g. Chinatown) where the competition is fierce, the fruit, meat or vegetable they sell are offered at a fair market price.

However, don’t discount your local greengrocer just yet – We have a grocer just around the corner from us that sells fresh and affordable vegetables. There is only one way you can know where you are going to get the best quality-price ratio and that is by shopping around.

Compare the quality, compare the prices, and make a choice based on the available options. Try not to think too much about convenience though, because convenience always comes at a price!

Fresh vegetables and fruit is important but not the only thing. You also need ‘dry foods’ and meat. Again, you have many options of where to shop. One of my favourite places is definitely Aldi.

For those who think that cheap food means low quality, you should do some research on Aldi and its market philosophy. Aldi (Albrecht Discount) is a German company focusing on the ‘basics’. On the shelves you will generally only find one choice of product and very few brand-names. The items are displayed directly on shipping pallets, usually not in a very glamorous shopping centre or location.

That is part of how they save money on rent and labour, passing the savings on directly to you without decreasing product quality. Aldi’s buying strategy – focusing on one core item for each product category – gives them buyer power over their suppliers.

Interestingly these suppliers are the same companies selling to larger supermarket and/or producing brand-name products. That allows Aldi to reduce cost margins and makes them popular with both suppliers and customers.

Aldi beats the competition most of the time but of course it doesn’t always have the best deals! The key to affordable grocery shopping is to source your purchases carefully, shopping based on item rather than locations. That means visiting more than one supermarket.

This is because most supermarkets put items on sale on a rolling basis to attract customers. They will not make a profit on these products but hope to gain from your spendings on other items. Because of time or location constraints, people prefer shopping in a single location.

Therefore, some will knowingly pay for the convenience of buying everything at a one-stop supermarket. But if you can, try comparing prices and buying specific items at different stores. In a big city like Sydney, those stores are usually located close enough together that the extra time it takes is no real excuse!

What to Buy and What to Eat?

This obviously depends on your personal preference. However, there are some common principles you can apply across your grocery purchases to ensure you get the best deal.

1. Buy food in season or on sale

One of the best ways to buy good quality food cheap is to look at the price. Prices will vary based on a number of factors.

For instance, most fruit and vegetables are seasonal. By choosing to buy fruits and vegetables in season, you don’t just ensure you get the freshest and best tasting food, you also find that there is most market supply and, consequently, it is cheapest. Of course, not everything has a season and you may sometimes want to eat out of season.

Keep an eye on the promotions and sales. Food is an important part of supermarkets’ regular promotions and can often be found on special offer. Also be aware that food has a lifecycle, becoming cheaper the closer it gets to reaching its expiration date (buying food 1-2 days before it expires means that it is significantly reduced but still perfectly edible – and if you don’t feel like eating it right now, don’t worry, you can also freeze it and eat it later!). We regularly by our food 20-75% off. That makes a big difference to our grocery bill, particularly when  you consider the cost of meat.

2. Always have a shopping list

You know what you like and what you buy on an ongoing basis. Put these items on your shopping list permanently and make sure you check for them every time you go shopping to see if there is a sale – That will ensure that you will buy most of your basics at discounted prices.

The other good thing about a shopping list is that it focuses your mind. It makes sure you buy only the items you need, not the items you want. This is important because impulsive buys spell trouble for your shopping budget! If you buy items on sale, but you don’t need or like them, you’ve still wasted money.

That doesn’t mean you shouldn’t be creative and you can let sales guide your shopping a little, inspiring you to try new things and change up your menu. However, make sure you don’t overbuy – Don’t buy things you don’t need or buy so many things that you can’t possibly eat them all!

3. Buy food in bulk

Saving money on groceries may require an upfront investment in a large food pantry and freezer. This will allow you to store food over a longer time period and gives you greater flexibility about when to buy. In other words, you can wait to buy things on sale and stock up.

Another method you can use is buy things in bulk (which generally, but not always, means they are cheaper – so make sure you check the price and do your comparisons). This is particularly good for ‘dry foods’ like pasta, tinned food, vegetable oil, etc.

However, this technique can also be used with meat, which can be frozen and will retain its nutritional values for several months. One thing we do is buy big portions of meat and prepare them ourselves. For instance, we buy whole chickens and cut them into pieces rather than purchasing breasts, thighs or wings separately.

This ensures a better variety and a better price ($4.99/kg for a whole chicken rather than $12.99/kg for chicken breast). We also often do this with beef, buying roasts and cutting them into steaks and chunks. It takes a bit more time but saves a lot of money. Remember, you pay a price for convenience!

4. Review your diet

We are not dietitians but we know that a balanced diet incorporates a variety of different food. The objective is to create meals that are healthy, tasty and low-cost.

If you carefully track your food spending, you will notice that the most expensive items you buy tend to be pre-prepared and processed foods (ready-to-eat meals), as well as junk food rich in sugar and salt (chips, candy, soft drinks).

Cutting these items out of your diet or at least reducing your consumption not only saves your budget but is also better for you!

You should also combine high-value and low-value items, e.g. eating fish with seasonal vegetables and rice to ensure that high quality food doesn’t blow your budget. Eating well on a budget is all about understanding what you’re getting for your money.

If you have a tendency toward extravagance, try setting yourself a weekly grocery budget. That way you can enjoy the occasional indulgence without breaking your bank.

5. Cook your own meals

Home cooking will save you a lot of money, cutting out expensive restaurants. You think you can’t cook?  The first time I cooked for my wife, I served her a raw chicken leg coated in mustard BUT I have improved my skills and she loves my cooking now.

It may take a bit of practice and experimentation if you are new to cooking, but there is no greater joy than preparing your own food. It’s nice to know exactly what goes into your meal and you can even get a sense of satisfaction from creating something yummy!

Next time you think about having breakfast with a friend in Surry Hills, think about whether you couldn’t just make that avocado salad yourself.

How Much Money Are We Saving?

There is no way for me to know how much you could save because it depends on your current spending habits. However, using myself as an example, I can show you how much you might save! Below is our yearly food budget per person, before and after our conversion to Monkeyism:

As you can see, we are not depriving ourselves. We have a balanced diet and try to be smart with our shopping and cooking habits. All those changes allowed us to decrease our food budget by almost 70%!
Outside Breakfast
On weekdays, I bought breakfast on the way to work. I easily spent $5 every morning (coffee + banana bread). Working 5 days a week and discarding holidays, there are 260 working days a year. That meant I spent $1,300 per year!

On weekends, breakfast would actually be more expensive as we would have brunch in a restaurant, spending about $15 per person. Even eating out only one day each week still amounts to $780 a year.
Home Breakfast
Our home breakfast menu consists of:
* Milk: 1L per week at $1 ($52 per year)
* Orange juice: 1L per week at $2 ($104 per year)
* Tea/Coffee: 200g per month at $4 ($48 per year)
* Cereal: 500g per week at $2 ($104 per year)
* Bread: half loaf per week at $1 ($52 per year)
* Butter: 250g per month at $2 ($24 per year)
* Jam: 100g per month at $3 ($36 per year)
* Eggs: 3 per week at $1 ($52 per year)
* Bacon: 50g per week at 1$ ($52 per year)
* Beans: 100g per week at $1 ($52 per year)

When doing the numbers, we have to factor in that we used to eat breakfast at home once a week and also spent at least 25% extra on groceries pre-Monkeyism. Our previous cost thus has to be calculated as 52/365 * 1.25 of our current yearly costs.
Outside Lunch
I used to buy lunch every day at work, with a $10 budget on average per working day (260), which amounts to $2,600 a year. On weekends, one day would be dedicated to a restaurant brunch (cost included in the breakfast section).

I now bring lunch to work every day, which is usually left over food from the previous day. Of course I still sometimes go for lunch with my work colleagues, probably about once per month, resulting in a spending of $120 a year.
Outside Dinner
We used to dine out or take away food three times a week at about $25 per person. That's a total of $3,900 a year.

Since we've had our baby we don't really dine out anymore, so our eating out has drastically reduced to about once every 3 months. That is a spending of $100 per year per person.
Home Lunch and Dinner
We used to eat lunch at home only once a week and dinner four times a week (260/730 meals).

Nowadays, we cook dinner and the next day's lunch at the same time. We have also improved our shopping skills and are saving more than 25% on our previous grocery bill.

Our menu consists of:
* Chicken: 1kg per week at $5 ($260 per year)
* Beef: 500g per week at $5 ($260 per year)
* Pork: 500g per week at $5 ($260 per year)
* Fish: 200g per week at $5 ($260 per year)
* Onions, Garlic, Herbs: $5 per month ($60 per year)
* Oil, Spices, Condiments: $10 per month ($120 per year)
* Potatoes: 500g per week at $1 ($52 per year)
* Rice: 500g per week at $1 ($52 per year)
* Pasta: 500g per week at $2 ($104 per year)
* Bread: 100g per week at $1 ($52 per year)
* Vegetable: 1.5kg per week at $6 ($312 per year)
* Fruit: 1kg per week at $3 ($156 per year)
* Cheese, Yogurt, Dairy: $4 per week ($208 per year)

Cutting out prepared food and restaurants – particularly at lunchtime – has had a huge impact on our budget. We used to love going out to eat with friends but now prefer our healthy, freshly prepared food.

That doesn’t mean we’re living in social exile; it just means we organize a lot more home brunches, getting our friends together to help us prepare delicious feasts. That’s much cozier than sitting at a crammed restaurant in Newtown and wondering how they can get away with charging those outrageous prices!

We now spend $3,000 a year per person. That means $250 per month or $8.22 a day. This is equivalent to spending $2.74 per meal with three meals a day. Of course this is just an average; there will be meals that cost us less and others that cost us more. The key thing is that you eat well. This is one saving that will only be sustainable if you don’t feel deprived!

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Monkey Master

My wife and I are currently living in Sydney, Australia. We plan on becoming financially self-sufficient in 2015 so we can retire at 35. We are regular working people, trying to be smart about saving money and generating passive income. I want to share with you how we reached that decision and how we are planning towards financial independence. Continue Reading.

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