A Quick Blurb
Grocery shopping and eating out after a long day is a daily routine for many worldwide. Make your list, go to the store, find everything on the list plus a few extras, purchase your groceries, go home, and put them away. Or, go out to eat at Chick-Fil-A, Chipotle, McDonald’s, etc. Food is essential for your body and mind. No way of getting around it, you need to eat to nourish your body for daily activities.
However, food takes up a big chunk of your monthly paycheck. According to a recent Consumer Expenditure Survey from the U.S. Bureau of Labor Statistics (BLS), a single person spends roughly 12.3% of their annual income on food. Now, this is an average, and what you pay for eggs in Greensboro, NC will differ from what you would pay in New York City. I understand that the cost of living, and therefore food costs, are different depending on where you live; I have experienced it. I remember when I only had to pay maybe $1.20 for an 18-count of eggs in Muncie, Indiana. The difference in cost of living from place to place is insane.
Disclaimer: Some of the links for the products listed below are affiliated links with Amazon. As an Amazon Associate, I earn from qualifying purchases if you click on the link and purchase the item. Also, I am not a doctor or a nutritionist, so take this with a grain of salt and do your research on what foods you should consume! Also, meteorologist, not a CFA. Investing opinions are my own and should not be used as financial advice! Thank you!
Let’s Do Some Math
Yes, I know this is a blog post, not a statistics rant, however, bear with me a moment. According to the 2021 U.S. Census Bureau 5-year average American Community Survey (ACS), the median income for an American citizen ages 18-24 was $30,340. According to a 2021 ACS survey on income in the past year (2021 inflation-adjusted dollars), the median income for a single person is $41,549. For simplicity’s sake, let’s approximate based on the above information and assume a median income of $35,000 for a single person between the age of 18-24. I know this number is quite different for others depending on location, job type, and whether you are in college or working. I use these numbers from the Census Bureau and trusted government sources rather than giving you a random number from a website. Okay, let’s break this down. You make $35K a year, before taxes. According to the Take-Home-Paycheck Calculator from Calculator.net, not including state or local tax, your monthly income would be around $2,332.76. Now, using the average of how much a single person spends on food, 12.3%, you would spend roughly $287 a month on food. This is $72 per week. This number can change from week to week, but this is a simple average based on a single person from the age of 18-24. If you have two people in your household, like my fiance and I, or have a higher annual income, this number goes up.
For Christina and I, we spend roughly $250 per month with a combined income of $100K. That’s $63 bucks per week for two people. Let’s say it varies, so on average we spend $275 a month. With our annual income, we spend around 3.3% on food for a year. Did I capture your attention now?
The following outlines how my future wife and I keep our food costs low.
Invest In High-Quality Kitchen Equipment
To be blunt, if you don’t have solid kitchen equipment at home to cook, your ass will be ordering takeout daily or getting a gold card level to order from Doordash. If you think ordering out and saving time is cost-effective for you, be my guest. This blog post is not for you.
You only need minimal equipment to have an efficient kitchen to cook delicious but easy dishes. Below are products I have and love or products I have researched on Amazon.
- Kitchen tongs (dollar metal tongs from Walmart are perfect as well)
- Good kitchen spatula
- Wooden spoons
- Silicon spatula
- 12-inch skillet
- 8-inch skillet
- 6-Quart pot
- 3-Quart pot
- 1.5-Quart pot
- Half-sheet baking pan or anything from the Nordic brand
- Plastic cutting board or you can find a good deal on Amazon
- Knife can’t go wrong with this knife
If you are on a budget, you can get the bare basics. However, I think the list above allows you to cook a wide range of tasty dishes. Although, you need to invest in quality, not a piece of plastic junk. That plastic junk will need to be replaced every couple of years. Plus, if it is cheap, you will not care about it. If you are moving around, you would rather buy another piece of kitchen junk rather than pack it to move. Essentially, you will care more about your kitchen equipment if you spend the time finding the perfect equipment for your needs. Efficient equipment leads to an efficient kitchen.
Make A Schedule
Listen, I know. Life is hard when you are working. Especially if you are a student with homework, sports, clubs, etc. Eight hours out of the day you are working. Let’s say you get up at 7 AM to work at 8:30 AM. That time is for coffee (or tea!), breakfast, showering, traveling, and getting your kids ready for school. If you have kids, then your wake-up time is probably much earlier. You get to work, get off at 4:30 PM, get back home around 5 PM, then you have to cook dinner and all? Sounds like a nightmare. A great solution my future wife and I have found is to make a schedule for dinners. We have found breakfast and lunch are easier compared to making supper (if you are from the south, you know you know). This topic will be discussed briefly in the next section. Each Sunday, we make a schedule for what we are going to make or if we are going to go out for dinner. This schedule can easily be changed based on the day’s circumstances, but having the dinner plans in writing helps with the mental aspect of cooking.
Many times we have looked at our schedule, and each other, and said “I am too tired to cook that tonight.” Instead, we supplement for an easier choice. If we didn’t want to make Tikka Masala or Orange Chicken from Trader Joe’s, we made either grilled cheese or quesadillas.
Consider Your Diet, be Creative, and Supplement
Saving money on food is not easy for all, and you will need to be considerate of your dietary needs. For no reason should you go out and buy boxes of ramen for all meals. Unless things are tight, then I get it, survive. Cooking cheaply does not translate to takeout, high-sodium foods, and frozen meals. Vegetables, fruit, pasta, potatoes, bread, corn or flour tortillas, greens, cereal, oatmeal, and rice are cheap options to make good healthy meals at a fraction of the cost.
Back to breakfast and lunch. Leftovers are your friend. I repeat, leftovers will save you money and time. Let’s break it down. Pasta noodles at Trader Joe’s cost $1.00 and a jar of pasta sauce at Walmart costs roughly $3.00. This meal makes around 3 meals if you are me, a bigger guy. That is around $1.33 per meal. You can’t complain to me that food is expensive. Need a quick breakfast meal, avocados on toast, or a bagel with a fried egg? Want a filling one? Try oatmeal with blueberries. All of these take less than 20 mins to cook!.
To get your food costs down, you will need to be creative. Google how to make meals with random ingredients, I bet they even have an app for that. Most of the time I’ll take our leftovers and make dishes out of them. Got fries? Fry frittata with any veggies you got! Have stale bread? Make French toast or croutons for a salad. When in doubt Google it out!
If basic grocery items are getting expensive, like eggs for us, find a way to supplement them. Meat gets expensive, cut it out or eat it just once a month. Find more ways to get protein like with shrimp! Buy in bulk for non-perishable items to save more. Thinking outside of the box is critical for keeping food costs low.
I want to take just a quick minute and talk about organic vs inorganic, not what the terms mean, but about the price. Now, if you have the means and can buy organic, great! Can’t? Then to be quite honest, don’t. I regularly do not buy organic because of the price. The price of organic foods kinda infuriates me, but I understand why it is priced that way. With how loose regulations are about what qualifies as “organic” or “free-range” or “farm-raised” I don’t spend my money on what is truly a gamble in quality.
Shop Around
Now, it took me three years of living on my own to understand how to grocery shop. It was not great at first, but I started to follow and understand which grocery stores have the best bang for your buck for certain items. You will learn if you wanna keep your food cost low, which grocery stores have the best price for the goods you want.
Therefore, you will need to shop around. On a Saturday or late evening, go to a few grocery stores. Look at the cost of milk, eggs, bread, meat, seafood, etc. The items you regularly purchase. You don’t have to write any of the prices down (or you can if you want), just collect a rough estimate. With practice you begin to make a mental figure or a map in your head of the grocery store and which items to get where. This will take a month to do, but afterward, it will be routine. Is it a wee bit annoying? Yes! Going to three grocery stores instead of 1 takes time, but the dollars you save become hundreds, then thousands.
How We Did It
I’ve followed these guidelines for a few years, but it does take time. In the beginning, I was spending more than the $250-275 per month that I spend now. At the beginning of 2021, Christina and I were spending around $300-400 per month. Still below the average for two! This money was turned into delicious meals that took a few hours to cook. However, in the fall of 2022, this became an issue. With Christina in grad school working like it was a 9-5 and me working from 9-5, working out almost every day, those longer prep meals became a burden. So, instead of taking 2.5 hours to cook one meal, we switched to simple.
And that is the main reason why our food cost is so low. Simple dishes that provided leftovers for lunch gave us our time back, and money in our wallets. Simple dishes that made us want to cook instead of going out. Here are some examples.
- Grill cheese
- Quesadillas
- Caesar salad
- Salad with cucumbers, carrots, and celery
- My favorite Trader Joe’s frozen meals
- Orange Chicken
- Kung Pao Chicken
- Teriyaki Chicken
- Honestly any frozen meal, they are all good and cheap relatively
- Pasta, any kind of pasta
- Rice to make egg fried rice
- La Croque madame
- Salad, cheese, and cracker night
- Popcorn night
- Egg frittata
- Omelette
- Pizza from Aldi or your local restaurant/grocery store
- Naan Pizza!
- Any kind of tomato or chicken soup
Honestly, I may have missed a few and will add them as I remember, but these are all easy to make and under 30 mins. Not convinced? Let’s break down two of the dishes by how much it makes, their servings, and the cost per meal. If you want more examples, leave a comment down below!
What To Do With That Extra Dough
Now that you have this extra money, what do you do with it? Right, you can put it in a high-yield savings account for a future vacation or expense. Save it for a hobby or a concert! Put it in a retirement account such as IRA or 401k. Or, you could put in a taxable account and try to reach Financial Independence, Retire Early (FIRE)! Why?? Because you buy your freedom. So I say you invest the money in any form like an IRA, 401K, or taxable account. For us, we invest any surplus into my taxable account because we plan to retire earlier than at the 60-year age point.
Let’s make an example. Our annual household income is $100K. We spend only 3.3% of our annual income on food, which is around $3,300 assuming we spend on average $275 a month. According to a recent Consumer Expenditure Survey from the U.S. Bureau of Labor Statistics (BLS), a married couple spends roughly 11.6% of their annual expenses on food. We are engaged and living together, so close enough. Taking 11.6% times $100K, that is $11,600 per year. I think this is a fair estimate.
The difference is $8,300 per year which is around $691 per month. That is a lot of money right there. Furthermore, in ten years, given that this number stays the same, that is $80,300. A down payment on a house, I hope lol. However, that is free money and you can spend it how you want. But we want to invest in it. Where? Well, I am not a Certified Financial Advisor (CFA), and for this example’s sake, we are going to invest in an exchange-traded fund (ETF) called SPDR S&P 500 ETF Trust, the stock ticker SPY. This is one of the most common ETFs that many companies make their version of. For a full explanation of what SPY is, I would recommend Googling SPY or checking out the ETF website. However, the committee picks out 500 companies that are the best of the best in the stock market and is market cap-weighted. This is an easy and sleep-well-at-night ETF to invest in.
To understand how $691 invested in SPY each month can help you achieve FIRE, we are going to use a website called Portfolio Visualizer and backtest our investment.
- In the initial amount, put $1.
- Click on cash flows, and hit the contributed fixed amount.
- Enter $691, or the amount of money that you typically save buying food.
- The contribution frequency is monthly.
- Have dividends reinvested as yes.
- Tor asset #1, type in SPY and 100% for allocation.
Hit enter, and watch your jaw drop. The final balance as of January 13th, 2023, not considering inflation, is $1,353,472 if you started to invest in 1994. Also, this comes with an annual income of around $22K just from dividends.
However, past performance does not mean future performance. Okay, well the full annualized return is 9.52%. Let’s go to another calculator called Calculator.net, and go to the investment calculator. Let’s do this step by step of how investing the difference can get you to your FIRE freedom.
- The starting amount is $1. Now, I want to know the results for when I am 50 years old, so 25 years.
- The return rate is 9.52%.
- We are compounding this annually.
- Investing $691 bucks per month.
Ready for your jaw to drop, again. The results are as of January 13th, 2023, not considering inflation, $797,474.30. You can do a lot with that kind of money. Retire early, pay for vacations, give to charity, get your children through college, etc.
The images of the results are shown below.
Final Word
In the end, I save money on my grocery bill by investing in high-quality kitchen equipment, shopping around, and making simple quick meals. I hope this blog post shows you how much you spend on food and provides ideas for lowering your food cost. Living below your means can give you unbelievable buying power. Just investing the difference in the average food cost gives Christina and me, what JL Collins calls, “F-CK You Money”! And hopefully, one day, you too will have “F-CK You Money!”