25 Ways to Lower Your Grocery Bill

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After housing and transportation costs, food consumes more of the average household's budget than anything else. I've already looked at ways to cut housing and transportation. Now let's look at a few ways trim our food budget — and do it without tightening our belts. (See also: How to Grocery Shop for Five on $100 a Week)

1. Set a Budget, and Stick to It

These are the first and last words in cutting your grocery bill. It's all about goal-setting. You will never succeed unless you define what you are trying to do.

The easiest way to start out with a grocery budget is to save a couple weeks' worth of receipts, calculate how much you usually spend on average, then subtract 10% from that amount. If you easily achieve that, you can go ahead and lower your budget even more.

2. Don't Shop the Same Store Every Week

Shopping multiple stores is key to paying less for groceries, but it's a strategy that many people balk at because it sounds time consuming. Here's the workaround — you don't have to shop at three stores every week, wasting gas and time running from store to store. Instead, be strategic. When your circulars arrive, find the best deals in the stores nearest you, then choose which store will help you save the most this week.

3. Use Coupons

From personal experience, I can tell you that coupons are worth the time they take to clip, print out, or, increasingly, load to a store card. Safeway's Just for U digital coupon program alone promises about 20% savings, and after using the program regularly I have found that it usually saves me more than 20%. Think of it this way — if you use just five $1 coupons per week on items you would have bought anyway, you'll save more than $250 per year.

4. Buy Clearance Items

Some grocery stores regularly put soon-to-expire meat in a special clearance bin, marked 30% or 50% off. Other good items to find marked down are deli items, dairy products, and at some lower-end stores, produce. Personally, I have never had a quality problem with such foods, since I always use them or freeze them immediately. But remember, if you buy something that does not taste good, any decent grocery store will give you a refund or replace it, even if the product was on clearance.

Bolder shoppers don't just look for products marked "clearance" — they ask the butcher or other employees if they can have a discount on something that's soon to expire.

5. Look for Alternative Grocery Stores

Don't walk past a small neighborhood grocery, ethnic store, or dented-can store without checking it out. Ethnic and neighborhood groceries often have excellent deals on meat and produce, while the dented-can outlets and even drugstores can offer deep discounts on canned and boxed goods.

6. Try Amazon

Sometimes Amazon's prices for canned foods, cereal, and other pantry items are sky-high, but sometimes they offer steep price drops and coupon codes. Wantnot.net is a good blog for getting alerts on great Amazon deals.

7. Participate in Meatless Monday

Meat is often the most expensive component of a meal. If you are used to serving meat at every dinner, try going meatless just once a week and see how much you save. You may find you want to add Tofu Tuesday or Steak-Free Saturday to your schedule as well!

8. Stop Wasting Food

Forty percent of all food produced in the United States is thrown away. That's a whopping 20 pounds of junked food per American.

You may not be able to control the amount of food that is thrown away at the farm and grocery store, but in your home, you can put a stop to the waste by making sure to use ingredients before they go bad, and by not putting too much food on your plate. One handy tip is to make a weekly meal of a soup or stew that can serve as a catch-all for any bits and ends of ingredients used throughout the week — you may end up with some surprisingly delicious concoctions.

9. Make Economical Substitutions

Make pesto with sunflower seeds instead of pine nuts. Replace expensive or out-of-season vegetables in recipes with the always-cheap carrots or cabbage. Substitute frozen berries for fresh. One substitution that doesn't usually save money anymore is swapping powdered milk for fluid milk — nowadays the powdered stuff usually costs more!

10. Stretch the Meat

Instead of serving whole pieces of meat like steaks or chops, serve casseroles, stews, and other dishes with chopped, crumbled, or shredded meat. That way you can make it stretch and use it more as a flavoring than as a main source of nutrition.

11. Stop Over-Eating

Do you ever make a double batch at dinner so you'll have leftovers to pack in lunches, only to realize that the family all had seconds and there's nothing left? If you're tempted to eat more than you need, try packing away half the food before you put it on the table or putting half servings on your plate. If you're trying to lose weight, this strategy can kill two birds with one stone.

12. Look for Buy One, Get One Free Sales

These are often the best deals in the supermarket, offering a 50% discount on two products. Most other discounts are only 10 to 20%. If your store allows you to use two coupons on BOGO pairs, you can save even more. The ultimate savings is when they let you pair a BOGO coupon with a BOGO sale and take home two items for free!

13. Use the Cash Envelope System

If you find you're spending more than you want at the grocery store, many budget gurus recommend the envelope system. At the beginning of the week or month, put the amount of cash you plan to spend on groceries in the envelope, and ONLY take that cash to the store. No credit or debit cards. If you can, include a little extra in your budget to allow you to take advantage of great, unexpected deals like clearance items.

14. Use a Rewards Credit Card

There are credit cards that offer rewards on grocery purchases. These cards give cash back or points for purchases made at most supermarkets. As long as you pay off your balances in full each month, there's no reason you shouldn't use a rewards credit card for your everyday purchases, to put some money back in your pocket. (See also: How to Save Over $1,000 Each Year Using Credit Cards)

15. Sign Up for a Regular Produce Delivery

This may seem counterintuitive since many of the community-supported agriculture produce boxes are organic and more costly. But you may find that receiving a regular delivery of produce forces you to cook more veggie-based meals and cuts your spending on meat.

16. Chop Your Own Veggies

If it takes you four minutes to chop an onion, is it really worth it to pay for a tub of pre-chopped veggies? Only if you make a really great hourly wage.

17. Don't Depend on Your Groceries for Your Self Image

Are you shopping at Whole Foods because you really feel it offers the most nutritious and delicious food, or because you feel like you've achieved the status of someone who shops there? Guess what? Just like smart millionaires drive cars with lots of miles on them, smart upper-income families clip coupons (they're the highest-using group!) and buy nutritious, inexpensive foods.

18. Find Out Which Organic Items Really Matter

If you're concerned about pesticide residue on your produce, it pays to check out the Environmental Working Group's list of which foods are most likely to be contaminated. Thanks to this list, I know that springing for organic potatoes and apples is worthwhile, but I don't pay more for organic onions.

19. Investigate Buying Clubs

Does your neighborhood or church have a bulk buying club you can join? This is sometimes a good option, especially for people who want to shop for organic food or non-toxic household products.

20. Make Your Own Bread

One of the easiest things to make from scratch is bread, especially if you have a bread machine. Not only do the ingredients cost less than a store-bought loaf, but a fresh, homemade loaf of bread also brings more enjoyment to a meal than a bag of factory-produced slices.

But what about the cost of the bread machine? No problem. I have picked up several perfectly functional models over the years for less than $5 each at thrift stores. Not convinced? With a "no-knead" recipe, you don't even need a bread machine.

21. Try Costco — With Caution

Costco can be a boon to your budget or a major stumbling block, depending on how you work it. It's a great place to get budget wines, if that's on your list. Personally, I don't have a Costco membership at the moment, but I do appreciate it when a friend with a membership picks up something for me like a large package of flour or baking soda. (See also: Costco's New Credit Card Gives More Cash Back to Shoppers)

22. Drink Water

Not only is it almost free and healthy, but, unlike a certain popular carbonated beverage, two gallons a day won't kill you.

23. Look at What the Rest of the World Eats

Next time you're heading to the grocery store, first look at these pictures of a week's worth of food for families around the world, taken by Oxfam. It just might help you realize you don't need to pile the cart high to enjoy nutritious meals.

24. Layer Your Discounts

It's not just about finding sale prices and coupons. These days, grocery stores also offer occasional basket coupons in their ads or by email, allowing customers to save $50 off a $50 purchase, or so. Then there are the benefits that come after you buy, like Catalina coupons, which print out after you pay and can take $1, $5, or more off your next purchase when you buy select items. Some stores, especially Target, are also offering store gift cards if you purchase certain items.

If you really want to save, combine a coupon, a sale price, a Catalina offer, and a basket coupon all in one trip.

25. Skim the Best Deals Off the Top

Every store offers a limited number of "loss leaders" each week. "Loss leaders" are the deals so good the store may be losing money on them. Their plan is to use these discounts to draw you into the store, where you will proceed to pay full price for lots of other stuff. You can thwart their plan by stocking up on the loss leaders without buying the full-priced stuff. The key is to stock up on whatever's on sale each week, and then next week you can draw on your stockpile in the freezer and pantry to avoid having to buy those things at full price.

How are you saving money on your grocery bill?