5 Top Changes I Made to Improve My Financial Life (continued)
What are the top changes we made to improve our finances? Below continues the discussion of the top 5 things we did that I feel had the largest and most immediate impact. This is the second entry of five.
2. Food: Reduce Groceries, Restaurants and Fast Food Spending
My first step in trying to get my financial life in order was to track where my money was going. I pulled all bank and credit card statements for the previous few months and tracked every dollar. I was blown away to learn that I was spending almost $2,000 per month on restaurants, fast food and bars. These were not extravagant $500 dinners with the wife but lazy decisions to just order Chinese food instead of cook at home or to just swing by a drive-through for a quick lunch while running the kids around town. Awareness was the first step and this revelation blew me away. When I shared it with my wife, she had a similar reaction. We agreed to be more thoughtful and plan our meals better. We reduced this dramatically and kept it low for many months. We still eat out when we want and don’t feel guilty about it but on the odd evening when the workday ends and dinner hasn’t been pre-planned the discussion about dinner doesn’t automatically turn to where will be order from. We are more likely to head outside and grill something quick like hamburgers and hot dogs or throw together a quick pasta meal.
Additionally, our grocery spending was a little bloated. My wife does the majority of the grocery shopping but as I tracked my spending, I noticed that in addition to her regularly scheduled grocery shopping trips, there were 10-15 side trips to the grocery store. These little jaunts usually averaged $50 per visit. Everyone runs out of milk from time to time and needs to run out quickly but each time I did that, the gallon of milk was joined by some snack or dessert that was not only detrimental to our budget but also our waistlines.
We did a few things to change in this category. We joined Costco, switched from the regular grocery store to Aldi and we planned our meals a little more thoroughly than we have in the past. Costco is great for savings but can also be dangerous if you are not disciplined. I found that the first few times we visited, we would come out having spent almost $200 per visit. They have so many things and the deals appear to be so great that we would simply fill our cart and be happy that we were getting great bargains. However, when we got home and unpacked, we would realize that we bought several things that we just didn’t need. We now enter the store only if we have a list and we do our best to stick to the list and get out. Now, our average visit costs about $100 and we only buy things we need and use on a regular basis. This shopping visit includes things that make sense for us to buy in bulk such as milk, eggs, toilet paper, dog food and others. The savings is significant.
Similarly, the switch to Aldi combined more conscious shopping with a store that has better pricing. Aldi is not available in all areas but we are fortunate enough to have one in our neighborhood and is located in the same area as the regular grocery store that we used to visit. So there is no additional inconvenience to go to one versus the other. Aldi doesn’t present the same marketing tactics as other stores and as such, it is easier to go in and stick to a list. It is pretty rare when we pick up something that hadn’t planned on buying before we went in.
Overall, I would say that we save approximately $200 per month or $2,400 per year on groceries. Add to that a savings of approximately $1,500 per month or $18,000 per year on restaurant and fast food spending. We are not very extreme in this area and only made small changes and the impact has been significant. There are some excellent blogs and podcasts out there that are more extreme in the area of meal planning, couponing, etc that would increase our savings but even the small changes we have made have led to savings of over $20,000 each year.
Total Annual Savings: $20,400.00
What changes have you made that were the most impactful? Feel free to add them in the comments.