Taking Control of our Grocery Spending

This entry is part 1 of 2 in the series Grocery Savings Project

So, I have a confession to make.  It’s a pretty boring one, but it’s still kind of embarrassing to admit. We (err, I, since I’m the one that does the grocery shopping) spend too much money at the grocery store.  WAY too much.  We are a family of TWO, and I cannot comprehend the outrageous amount of money I spend at the grocery store.

I’ll go into the amounts later in this post, but in ridiculous click bait speak, “It will SHOCK YOU.”

Now, let me just get a few potential reasons out of the way here. I’m not necessarily defending any of these as reasonable, but perhaps just some theories for why our grocery costs are so high.

  1. Pretty much every meal we eat is cooked at home, and from scratch. This includes things like BBQ sauce, salad dressing, pizza dough, marinara sauce, and peanut butter.  So, while yes I could buy an entire bottle of BBQ sauce for a buck when it’s on sale, I instead have to ensure that I have ketchup, brown sugar, tabasco sauce, liquid smoke, bourbon, apple cider vinegar, etc, just to make BBQ sauce. I’m not complaining. I highly prefer our homemade BBQ sauce and it’s super easy to make. I’m just trying to point out that cooking from scratch is not ALWAYS cheaper than buying things pre-packaged.
  2. I spend a little more money on meat because we shop at a local butcher. Their meat tastes SO much better (like less chewy) and I like knowing it’s locally sourced. I’m not overly granola about a lot of things (like giving a hoot about organic produce or non-GMO corn or whatever), but I do like our locally-owned butcher meat!
  3. I plan our meals by month, and grocery shop each week for the needed groceries for that week’s meals. (P.S. I owe you guys and updated version of my meal planning workflow and spreadsheets!) I just buy pretty much what we need for that week. For instance, if I need a can of Campbell’s Condensed Tomato Soup or a container of ricotta cheese or a bag of potato chips, I buy it. I don’t really pay attention to the price. Because, I need it for that week’s meals. If items have a sale sign on them, I might grab one or two extra. All of this is to say, I don’t leverage sales or stock up on items when there’s a good price because I just buy what I need when I need it.
  4. Clipping coupons just never seems to be a good payoff.  I used to have a Sunday-only subscription to the Washington Post for 93 cents per week. I’d clip a few dollars worth of coupons, maybe remember to use them, and then get annoyed at my whopping $2 savings for my work.
  5. I hate grocery shopping. Why? It means I have to leave the house, and I’m a total homebody. So, the thought of having to hop from store to store to “shop the sales” makes me shake in my boots. Plus, I don’t get home until 6:15PM or 6:30PM on weekdays so I never feel like going to the store because it’s so late, but stores are so crowded on the weekends.  So there’s never a “good” time to go!

Okay, are those enough excuses / theories for you?

 

Saving-Money-at-the-Supermarket

 

You Spent HOW MUCH???

So, here are some amounts we would like to confess.

In November, we spent $487 on groceries.  I’m too ashamed to even say what we spent in December, considering all the extra groceries for holiday entertaining. In January, we were north of $600.

That is right folks, I may know how to book $12,000 worth of airfare for five bucks or stay for free at a $700-per-night-hotel, but I seem to hemorrhage money at the boring old grocery store. .

I look at my grocery receipts and there is nothing out of the ordinary. We use up all the stuff we buy. Of course, we have some waste, like when we don’t use all our sour cream by the expiration date, but I don’t look back on my receipts and say, “Wow, didn’t need to buy that because we never used it!”  We use everything.

So, here’s the deal. I’m making 2015 the year of cutting grocery costs. Because holy hell, we are OUT of control.

 

Attitude Adjustments

But first, I needed to change my way of thinking about getting better deals when grocery shopping.I never thought it would be worth it to clip coupons or shop the sales for a couple of reasons:

  1. Time is money, right?  Should I really be spending an hour every week to save a few bucks at the grocery store?  Probably not. Because I earn a decent wage.  But oh right. I make a good wage WHEN I’M AT WORK. I’m a salary employee. Which means whether I work 40 hours per week or 90, I get paid the same amount of money. So, when I’m at home looking up sales or clipping coupons, it’s not like I could be spending that same time working at my job and earning more money. Nope. So, at this point, I’m going to ignore the “hourly wage” argument and just do things to try to save money! After all, if I can get our grocery bill from $600/month down to $300, that’s a savings of $300. Even if I spend four or five hours per month tracking down sales and clipping coupons, I think that’s well worth it!
  2. Gas, time, and aggravation shuttling between stores to shop sales. There is no way that I want to hit up four different stores to get sale prices on various items each week.  But I recently learned that a lot of stores, namely Walmart and Target, price match local competitors. This is not terribly convenient, as our Walmart and Target only carry a limited amount of groceries (no Walmart Supercenters or Super Targets around here!), but about 85% of the time, I can buy everything I need for the week at Target or Walmart.
  3. Frankly, it just seems boring. I would much rather be sitting at my computer trying to figure out the best first class products to redeem frequent flyer miles on for a trip to Japan (or wherever!) instead of browsing online grocery ads and clipping coupons.  I mean, it’s a no brainer on what seems like more fun!  So, I’m trying to think of it in a different way.  Even if I can manage a savings of $300-$400 a month on groceries, that’s $3600-$4800 we can spend on OTHER things or experiences that are MUCH more fun than groceries. For instance, one of the excursions I want to do on our Alaska cruise is $199 per person.  Essentially four hundred bucks for the two of us for something that is about six hours.  That seems like a LOT of money to spend on a single excursion, but it looks so cool.  But, if I can save that amount each month between now and June by spending more reasonable amounts at the supermarket, it suddenly doesn’t seem so bad.  So, instead of looking at the idea of browsing ads or shopping for sales as boring, I’m going to try to remember to look at it as an effort to divert money to things that are more fun!

 

So, I’ll be chronicling my attempts to save some serious cash at the grocery stores, which have so far included tracking our grocery inventory and use, using digital rebate apps on my phone, coupon clipping, and price matching at stores that offer it!

What are your tips for saving money at the supermarket?

 

Am I a Victim of the Home Depot Data Breach?

Yesterday I stopped at our local butchershop here in Northern Virginia, which is where I buy all our meats these days. I usually just go there once a month and stock up on meat for the rest of the month.

Last night the grand total at the Butcher came to $160.85. The employee swiped my Chase Ink Bold card and handed it back to me. Then he said he need to try again and asked me for the card again. Then, as discreetly as possible, he said, “Um, do you have another card, this one has been declined twice.”

First thing, “Do I have another card?” I’m a points-obsessed credit card collector. Of COURSE I have another card. (I didn’t actually say that, but I was thinking it).

And second thing, “Oh great, now the local family-owned butcher I go to every month thinks I’m a deadbeat with maxed out credit cards.”

But I didn’t think too much of it. I just figured that the amount at the butcher triggered some sort of potential fraud alert algorithm and that I’d be getting a phone call from Chase any moment to verify the charges (like has happened in the past). I paid with another card and had a few more errands to run. By the time I got home, Ken and I chatted for a bit, then we ate dinner, and it was time to go to bed! I pretty much forgot about checking on my Chase Ink Bold card.

Yep, those aren’t my charges

When I woke up this morning, I remembered about the declined card, and logged into my Chase account. And sure enough, there were three charges that I didn’t recognize. After a quick Googling, it looked like two of the merchants were based in Brazil and one was in Iowa. The charges were not excessive ($7.28, $16.32, and $3.55).

I called Chase, and I told them I thought my card had been compromised. The agent said that yes, there had been a fraud alert put on my card, and that she was going to transfer me to the fraud department.

We went through the recent charges, and the agent said, “Did you use your Chase Ink Bold card at a gas station in Brazil yesterday?” Nope, I didn’t.

I confirmed which ones I did not recognize. With that, my Chase Ink Bold card was closed, and they’re shipping me a replacement card overnight.

I guess it’s impossible to tell exactly how my card information got to Brazil and Iowa, but I did use my Chase Ink Bold card at least three times this past June and July at Home Depot. Considering all the news surrounding their data breach, I wonder if that’s how my number was compromised.

 

Past Fraud Alerts I’ve Experienced

So, I’m really happy that credit card companies disable new purchases if they suspect fraud. That has happened to me at least three times in recent memory:

1) Almost two years ago, I spent about $200 at a WalMart, a place I hadn’t shopped at in years. My Chase card was declined, and I just used a different one. By the time I was walking out the door at WalMart, my cell phone was ringing and an 800 number was showing up on the caller ID. It was Chase’s fraud department and I just had to go through an automated process to confirm my charges. Easy Peasy.

2) Last June, my card was declined after my third of six $50 transactions at a Safeway. (I was buying gift cards to leverage some extreme savings at Lowes). I was using my American Express card, and, like the WalMart issue, my phone rang almost immediately after. Once again, I just had to go through an automated process to confirm the charge, and then I was able to use my card again.

3) My Chase Sapphire Preferred card was declined a few weeks ago after attempting to make a relatively large purchase at ModCloth (an online clothing retailer). Within moments, I had an email from Chase and I was able to go through an online process this time to confirm my recent charges.

So, all that being said … Why didn’t Chase call me this time? I’m glad they put a hold on my account in an attempt to prevent additional fraudulent charges, but calling me could’ve saved me the embarrassment of getting my card declined.

 

A few final thoughts on the entire situation

  • I’m not even mad. These things happen. I’m not going to stop using my credit card for purchases. (Like some random internet commenters always seem to mention in news stories about data breaches … “I’m going back to using all cash!” or “I’m never shopping there again!”) This literally took about 7 minutes of my time to take care of.

 

  • I love credit cards for their consumer protections. Once upon a time, way back when, I used my debit card for everyday purchases. If a debit card card gets compromised, essentially your entire checking account gets compromised! Credit cards have zero links to my “real” money except when I pay my bill! I remember one time (around 2006, 2007) I had a double charge on my debit card for a fast food restaurant You know what the bank’s solution was for that? “Go back to the restaurant and show them your statement and your receipt and ask for a refund.” Umm, what? And that’s what I had to do. The bank wouldn’t refund it directly, I had to take time out of my day to go back to the restauant. I wondered if it was even worth the $7.00 charge, but it was the principle!

 

  • It’s a little more difficult to track unusual purchases if you use 20 different credit cards in a given year. Ken and I always seem to be applying for new cards to maximize points and miles bonuses, so sometimes I can’t even remember what card I used where. Ken likes to track everything through Mint, but I’ve always had a lot of trouble using Mint (they don’t support my one student loan lender, and one time a Citi credit card I was using regularly didn’t update for MONTHS despite having correct login information, and a few other issues as well). I am very diligent about logging into each credit card account each month (usually on the last day of the month), so I know I’d catch any suspicious charges then, but still, it’s not like I have just one credit card to monitor for fraudulent charges! But it does make me more confident in my decision to routinely review my wallet contents and close out cards.

 

  • I am very excited about ApplePay. If it works the way I understand it, merchants will no longer be receiving any specific data, like the credit card numbers, about your credit card. Hopefully this will help prevent large scale data breaches like this in the future!

 

  • Similarly, I’m happy to see that chip-and-pin enabled cards are becoming more common, because they are considered more secure than chip-less cards that just rely on the magnetic stripe. I’m sure that anybody who has traveled to Europe in the past 10–15 years has lamented how difficult it can be to use a US-issued credit card in Europe because US-issued cards are usually not chip-enabled. It appears that many banks should be adopted chip-and-pin cards by October 2015. Just in the past year, my Barclays Arrival Plus and several Citi products (such as my HHonors Reserve) have been issued with chips. It was so much easier to use my cards during our trip to Russia than it had been using credit cards on previous trips to Europe!

So folks, keep an eye on your cards!

Have you ever had a fraudulent charge on your credit card or debit card? How did you get it taken care of?

Figuring out what our emergency fund should be

Emergency Fund Estimates Spreadsheet

Recently, Ken and I have been tinkering with some new ideas for being a bit more aggressive with our finances.  Right now, the only investment accounts we have are our retirement accounts. We have 401k’s, Rollover IRAs, and Roth IRAs (one each type of account for each of us, so six retirement accounts total).  Besides our checking account for everyday bills, the rest of our money sits in a savings account that earns less than 1% APY.

While I was trying to figure out how much of our balances I should tinker with, I realized that I never had never actually figured out just how much we needed to keep in a quickly-accessible savings account in case of an emergency.

I’ve read that you should have about 6-8 months worth of expenses in an emergency fund.  Since we live in an area where job opportunities abound, and since we both work in high demand fields, I think we’re safe in erring on the lower end of that boundary and having six months worth of expenses on hand.  Heck, Ken literally found a new job in three weeks the last time he was looking.

Also, it’s tough to envision a scenario where both of us would be out of work at the same time. But, you never know when we both might be out of work for months due to a car accident or something.

So, here’s what we did.

We figured out all of our monthly “necessity” expenses and their respective amounts.  We then determined how frequently we would have to pay them in a six month period.  For instance, our water bill and our Homeowners Association (HOA) dues are only paid quarterly.  So in a six month period, we would only have to pay those bills twice.

 

Emergency Fund Estimates Spreadsheet

 

Then we multiplied each expense by the number of payments in a six month period, and then added up all of the expenses.  To be extra cautious, we added an additional $3000 “big ticket emergency” expense, like a car repair or major home repair.  We determined that we have $3789.13 in critical monthly expenses. Some expenses, like our cable and internet bill, we could likely decrease during unemployment by cutting out additional TV channels.

While this might be a bit controversial, I did not account for any day-to-day necessity expenses, like groceries or gas.  The reason for this is I figure that unemployment insurance or short term disability insurance (offered by our employers) would be enough to cover our normal day-to-day expenses.  And, like I mentioned earlier, it would be unlikely that both of us would be out of work at the same time, so presumably we would have at least one income to cover those day-to-day expenses.  As a second option, if necessary, we could always dip into our Roth IRA accounts in an absolute dire circumstance since there are no penalties for withdrawal of the principal.

Since I carry the health insurance for both of us, paying for outside health insurance would only be an issue if I lost my job.  We would probably be able to find something cheaper, but $800 is about what my COBRA insurance would cost (my contribution plus my employer’s contribution to my existing health insurance).

I did not account for any student loan payments because those are easily deferred during unemployment.  Luckily our student loan payments are very reasonable, so hopefully we could continue to pay them, but it is nice to know that the payments can be deferred.

One thing that might need to be added to our calculations in the (somewhat) near future, is a car payment.  Both of our cars are paid off.  My car is 15 years old and has 102,000 miles on it.  I plan on running it until it dies, and who knows when that could be.  So, when I buy a new car, I’ll have to be sure to adjust the emergency fund calculations to account for a car payment.

So, according to the calculations, we should have $24,198.78 in an emergency fund.  Let’s just call it $25,000 to make it a nice round number.

That leaves us with all our balances greater than $25,000 to be more aggressive with.  Will we use every last penny of those remaining balances?  Nope, we’re way too cautious for that.  But, our emergency fund calculation does give us a good idea of what we need to keep untouched.

We’ll talk more about our ideas for those balances in future posts!

 

Crazy Savings at Lowes

For the past few months, I’ve been eyeing up smokers.  I love to grill using charcoal, and I wanted to experiment with smoking some meats, but I just couldn’t justify the $299 price tag for the Weber smoker that I wanted.

This upcoming weekend, we’re having a belated Father’s day get together with my in-laws. Ken asked his dad what he wanted to have me cook, and his dad said, “BBQ ribs.”  I was like, “SCORE!  I have an excuse to buy that smoker now, and I didn’t even have to put my father-in-law up to it!”

But unfortunately, it had already been a pretty expensive month for me.  My 3+ year old MacBook Pro is running so slowly it’s been driving me crazy.  So earlier this month, Ken and I ordered parts to build a new computer for me.  Although it’s a lot cheaper to build a computer than to buy one with the same specifications, it was still nearly $850.  It looked like I’d have to forgo the $299 smoker and just cook the ribs on the grill or in the oven.

But I couldn’t quite let it go of the smoker idea.  I shopped around.  Prices for the smoker were the same at Lowes and Home Depot too.  Sears didn’t sell it.  The price was $299 everywhere I looked.

But then I remembered this post from last week and realized that I could save more than 40% of the smoker by leveraging some extreme savings at Lowes!

The week of 6-11 through 6-17, Safeway was having a “Dads and Grads” gift card special.  For each $50 gift card you purchased, you got a $10 off Safeway coupon.  Gift cards for about 10 different stores were eligible for the promotion, one of which was Lowes!

 

Steps to Savings

So that brings me to step 1:

 

1) Purchase $300 in Lowes gift cards from Safeway.  I purchased six separate $50 gift cards so that I would get six separate $10 Safeway coupons.  Total savings by buying the gift cards at Safeway: $60.

 

2) Safeway was also running a promotion for 4x gas rewards points on gift card purchases.  So my $300 purchase netted 1200 gas rewards points.  This will ultimately save me $1.20 per gallon on my gas guzzling 1999 SUV.  Total savings on future gas purchases: ~$20

 

3) I used my Amex Blue Cash Preferred card to purchase the Lowes gift cards from Safeway.  The Amex Blue Cash Preferred provides 6% cash back at supermarkets.  Total savings by purchasing $300 in gift cards at Safeway: $18

 

4) Next, I searched high and low for a coupon code for Lowes that would be accepted on Weber grills.  Nearly every coupon code I tried was not eligible on Weber items.  But, I finally found one on RetailMeNot for $25 off a $250 purchase.  Total savings for a few minutes of searching for a working coupon code:  $25

 

5) Then, I placed the Lowes order using a cash back portal.  Ebates was offering 2% cash back, which is decent, but not great.  But they had the highest cash back rate, so I went with it.*  Total savings using a cash back portal:  $5.98

 

Total savings:  $128.98

 

So, there you have it.  I saved myself more than 43% on the cost of a smoker I almost would’ve paid full price for!**  To be honest, if I hadn’t already spent money on the computer parts earlier this month, I probably would’ve just paid the $299 and ordered it from Amazon without a second thought.  But this was so much more fun!  I hope to chase more deals like this in the future!

I can’t wait to use the smoker this weekend!

 

** There is an additional supermarket savings option this month for some folks.  Amex Sync Offers was targeting select customers with $10 off grocery purchases up to three transactions.  Unfortunately I wasn’t targeted for that promotion, otherwise I could’ve saved an additional $30 on my Safeway transactions!  You can read more about maximizing Amex Sync offers here.
* There was a slightly better cash back bonus if you used the Chase Ultimate Reward portal.  However, I have found that my luck getting bonuses to post if you’re not actually using a Chase Ultimate Rewards card has diminished over the past year to zip, nil, nada.  Since I was going to be paying for the entire transaction using gift cards, I assumed that I wouldn’t get any cash back bonus if I shopped through the Chase UR portal.  Therefore I just went with the sure bet of Ebates.

 

 

Some Financial Goals

When I first started reading blogs around the 2005 timeframe, I focused my reading on personal finance blogs.  I had just started working in a professional setting after getting my college degree.  My $849 monthly rent was half of my take home pay. I knew I wanted to be a financially savvy person and build up a generous savings and start investing.  It was difficult to do, but I was managing bit by bit.

Still, I continued to read lots about personal finance. I was obsessed with finding high interest savings account rates (hello, does anybody remember the 5% interest rates on a NORMAL savings account in 2007), and I fantasized about being extended enough credit to run some credit card arbitrage.* I was socking money away in my 401k and tried to save my pennies while paying rent and my student loans.

Nine years later, things have definitely changed in the personal finance realm, but my obsession continues!   Interest rates on savings accounts plummeted, making high yield savings accounts nonexistent and things like credit card arbitrage no longer lucrative. But, I definitely leverage credit cards for free travel.  Our income tax brackets certainly changed when we got married, and we were no longer eligible for some tax credits (like student loan interest) that we used to be eligible for now that our incomes were higher.  I aggressively switched jobs in search of higher pay.  My gross pay is nearly three times what it was just nine years ago.  So I consider myself pretty lucky.

I thought I’d thought I’d share of our current financial goals with you all, and have some follow-up posts on topics like the spreadsheets we use to organize our finances, how our assets our allocated, and many other topics we enjoy.

Without further ado, here are a few of our major financial goals

A few of our financial goals

Retiring early.  I like my job, and it is excellent pay for somebody who graduated with a liberal arts degree.  But, given the choice, I’d rather not work in a traditional 9-5 office environment.  Tomorrow is never guaranteed, so I don’t want to be a person who says, “I’ll have time when I’m retired.”  I want to do it now!

Generating enough (mostly) passive income to support both me and Ken outside of a traditional work environment.  This goes hand-in-hand with the whole “retiring early” thing, but I feel like this is the method to achieve our early retirement goal.  We’re inching our way closer to this, and hope to start a new business venture in the near future.  But we’re still very much in the research phase of it right now.  The business will probably require an initial investment of $25,000-$30,000, so it is a pretty big leap.  More on that in the future!

Growing our non-retirement investment accounts and generally branching out in our asset allocation.  Ken and I have both been diligent about contributing to our retirement accounts since we were younger.  But right now, except for our retirement accounts, we don’t have any money in investment or brokerage accounts.  I’d like to start an investment account and maybe start investing in some P2P lending as well.

Rent out our home when we decide to move.  We’ve lived in our house for just over five years now.  When Ken bought this house (before we were married), he called it a “ten-year” house.  In other words, a great starter house, but not the house we want to grow old in.  I couldn’t be sure how many, but there are several homes in our neighborhood, maybe 10-15% or so, that are rented out.  The monthly rent payments for houses in our neighborhood seem to exceed our current mortgage payment by at least several hundred dollars, so it seems like a safe bet that renting out our house would be cashflow positive for us.  Obviously this would be something to consider only closer to when we’d be looking to buy a new house, but it does seem like a no brainer, considering our exceptionally low interest rate on our mortgage.

 

Those are a few of them for now.  I’m obsessed with spreadsheets and doing calculations to help us figure this all out, as well as spreadsheets that help us organize our day-to-day finances. In future posts, I’ll be sharing with you some of our tools we’ve developed and used!

What are your financial goals?  How do you plan to achieve them?

 

 

** Funny, when I was a young professional, I couldn’t get a credit card with more than a $1500 or $2000 limit.  Now I’m routinely approved for $65,000-$75,000 of credit in a single app-o-rama.  My oh my how times have changed.