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Groceries 101

Do you have a pantry full of food but nothing to eat, despite spending half your paycheck at the grocery store? Do you plan healthy meals, then shake your head at the cash register, realizing it would have been cheaper just to dine out? If your grocery spending is leaving your wallet as wilted as the arugula wasting away in your fridge, you’ve come to the right place. Welcome to The Penny Hoarder Academy’s Groceries 101. Whether you’re looking to shave a few dollars off your grocery bill or your food spending needs a complete overhaul, this course is for you. By the end of Groceries 101, you’ll know how to make a grocery budget. You’ll learn the basics of meal planning and find resources to help you build weekly menus. You’ll be able to wield coupons and navigate cash-back apps like the champ you are. You’ll reduce food waste, and both your savings account and Mother Earth will thank you for it. Hopefully, you’ll get your grocery spending under control. And maybe you’ll even shrink your takeout bill as your moments of hangry desperation become rarer.

01 How to Make a Grocery Budget

The average American spends 6% of their budget on groceries, plus another 5% on dining out, according to the U.S. Department of Agriculture. That means we spend about 11% of our incomes on food.

Easy peasy, right? Not quite. We wish we could give you a magic percentage of your income you should spend on groceries. But 11% is just an average. Your actual budget will vary based on how many people are in your household and with their ages, sexes and dietary restrictions.

Ready to create a customized budget for your household? Follow these five steps.

  1. Check the USDA’s Monthly Cost of Food Reports

    The USDA’s Cost of Food report is a helpful starting point when you’re planning a grocery budget. Published monthly, the report estimates how much it cost individuals and families to eat a nutritious diet for the previous month across four spending levels.

    The plans show just how widely grocery budgets can vary. For example, estimates for a man between ages 19 and 50 range from $185.90 to $341.20; a woman in the same age range could spend $164.80 to $327.30.

    Note that these plans assume you’re making all your meals at home. LOL’ing? It’s fine if you like to eat out, but you’ll need to adjust your grocery budget downward to account for restaurant spending.

  2. Take a 3-Month Average of Your Grocery Spending

    Look back at your grocery spending from the past three months and calculate the monthly average. It’s OK to look back at credit card and bank statements to calculate the average. But in the meantime, try to save a month’s worth of grocery receipts to examine in greater detail for our next step.

  3. Look at a Full Month’s Worth of Grocery Receipts

    One of the easiest ways to cut your grocery bill is to look at items that have gone to waste. Once you have a month’s worth of receipts, highlight items you’ve tossed or that are collecting dust in your pantry. When you make your shopping list in Chapter 2, think twice before you add these items.

  4. Calculate How Much You Really Have Available for Groceries

    If you don’t know exactly how much money you bring in and spend each month, start with our Budgeting 101 course. But here, let’s assume you know the basics of your budget.

    You probably have certain fixed expenses that don’t change from month to month. Think your mortgage or rent, car payment and insurance premiums. You know you won’t have that money available to spend on groceries, so deduct all your fixed expenses before you start making your grocery budget. Note: You may have some fixed expenses that are discretionary — meaning they aren’t basic necessities — that you can cut if you need more money for your grocery budget.

    Make your grocery budget based on how much money you have left after deducting basic fixed expenses. Use the USDA estimates as guidelines to set your goals.

  5. Adjust Other Parts of Your Budget as Needed

    If you have a decent amount of discretionary income, you’ll need to weigh your priorities as you make your grocery budget and adjust other spending categories accordingly. For example, you might budget extra for takeout and less for groceries if you’re strapped for time and value convenience. Or maybe you’ll decide to cut back on movies and entertainment so you’ll have more to spend at the store.

    But what if you can’t stretch your grocery dollars far enough?

    Help is available. The Supplemental Nutrition Assistance Program (SNAP) helps millions of families pay for food nationwide; eligibility varies by state. The USDA offers a prescreening tool that can help you determine whether you’re eligible, though you have to apply for benefits at your local SNAP office.

    The USDA’s National Hunger Hotline can also connect you with resources in your community. Call 866-3-HUNGRY or 1-877-8-HAMBRE for Spanish from Monday through Friday between 7 a.m. and 10 p.m. Eastern time.

02 Meal Planning 101

Congrats, you’ve made a grocery budget. Now comes the real challenge: sticking to it.

If you’re serious about it, you need a plan before you start shopping. Without one, you’re likely to succumb to impulse buys, especially at the end of a long day. Grocery stores have all kinds of sneaky tricks that get us to spend more money, like constantly increasing cart sizes and changing where items are located so we’re exposed to more products.

Here’s your game plan.

The Principles of Meal Planning

The basic idea behind meal planning is to think in terms of how many meals you’ll need in a certain time frame, often a week. Let’s say you have a family of four. You each eat three meals a day, and you’re planning to eat all your meals at home this week. You need to plan for 84 meals.

Once you’re planning for a certain number of meals, you can start thinking about how far your food can go. So when you add an 18-slice loaf of bread to your shopping list, you’ll think in terms of how that loaf is enough for nine sandwiches, or just over two meals for your family of four.

You’ll save money by planning recipes for the week that use many of the same ingredients; check the circulars for sales at your grocery store so you can plan meals around what’s on sale. You can also stock up on sale items and freeze meals to eat later. You may find it easier and cheaper to cook in large batches.

If you’re just getting started with meal planning, an app or online tool can help.

Mealboard costs $3.99 and lets you drag and drop recipes you plan to make onto a weekly calendar. Then it will create a grocery list for you with prices at one of the stores featured in the app. For $5 a month, $5 Meal Plan will send you a weekly menu of meals that cost an average of $2 a person to make.

Once you’ve mastered meal planning, you may want to devote some time each week to meal prep. By setting aside time to wash and cut veggies or cook meat in advance, you’re more likely to eat the food you buy.

Do Not Enter Without a Shopping List

The No. 1 rule of grocery shopping on a budget: Do not pass through the sliding-glass doors without a shopping list, even if you’re not ready to commit to meal planning.

When you reviewed your receipts in Chapter 1, you probably found some easy items to nix from your shopping list.

On the other hand, there are probably lots of things like toilet paper and milk that you always need to have. Try keeping a running list on your fridge or in your phone of items you’re running low on so you don’t forget to add them to your shopping list.

Now it’s time to take inventory of what’s in your fridge and pantry. Look for recipes that won’t require a lot of additional ingredients, and add ingredients you don’t have to your list. Don’t forget to add healthy, inexpensive snacks.

What to Always Have in Your Pantry

Stocking up on some essentials is key to saving big at the grocery store. Here are some basics you should always have on hand if you want to avoid impulse buys or wasting money on takeout when you’re in a pinch.

  • Breads and tortillas: Sandwiches, tacos and quesadillas are all easy to whip up and can be tasty options for leftovers.
  • Pastas: Keep a short noodle in your pantry to make macaroni and cheese or pasta primavera with veggies, and a long noodle to pair with a sauce, like Alfredo or marinara.
  • Beans and legumes: These are great sources of protein that cost way less than meat. Pro tip: Buying them dried instead of canned will save you money.
  • Flour and sugar: These are required ingredients for most baking.
  • Nuts and seeds: These make for awesome, nutrient-rich snacks, and they also provide texture to foods like salads and baked goods.
  • Oils and vinegars: With just a few basic types of oils and vinegars, you can make fabulous salad dressings and marinades.
  • Condiments and sauces: These add flavor to otherwise bland meat and veggies.
  • Herbs and aromatics: Keep salt and pepper, garlic, cumin, Italian seasoning and crushed red pepper in your pantry, and you’ll be able to spice up most of your favorite dishes.
  • Canned goods: Coconut milk, stock and tomatoes are necessary bases for many soups, chilis and curries.

03 How to Start Couponing

Let’s start with the cold, hard truth: Those “Extreme Couponing” episodes you’ve seen aren’t based in reality, and you’re probably not going to coupon your way to $300 worth of groceries for $2.50.

Before you start couponing, be aware that it can take a lot of time — as one woman, who spent about 50 hours couponing over three weeks and saved only $1.05, can attest to. The savings might be worth it if you’re feeding a large family. But if you’re a single person looking to shave a few bucks off your weekly grocery bill, your time might be better spent earning extra money.

Where to Find Coupons

Gone are the days when you had to wait for the Sunday newspaper circulars to find coupons. Here are some of our favorite resources.

  • Coupon Websites

    • Coupon Mom: Use the menu at the top of the website to find coupons by retailer, brand or coupon category, or search the coupon database.
    • Find printable coupons, coupon codes and cash-back offers. The only drawback is you can’t search for a coupon for a particular item.
    • Hip2Save: Find deals and coupons and use the site’s HIP List, which allows you to store coupons you’ve been meaning to use, deals you’re considering or any other HIP2Save post to your personal list.
    • RetailMeNot: With both printable coupons and promotional codes to use online, RetailMeNot is a must-bookmark site for any couponer.
    • Southern Savers: If you live in the South, Southern Savers is a must-read for regional grocery deals. You’ll find coupons, store ads and guides, and a frugal living section.
    • The Krazy Coupon Lady: The website and app show you how to combine coupons with sales to score serious savings. The site also offers a helpful beginner’s guide to couponing.

  • Other Ways to Get Coupons

    • Contact brands to tell them how much you love their products. Then ask for a coupon. One Penny Hoarder writer reached out to 100 brands and scored $120 worth of coupons.
    • Sign up for emails. Brands will send you coupons just for forking over your email address.
    • Look for coupons on products. Many in-store items have coupons directly attached to them. Just make sure you peel them off and hand them to the cashier when you pay; otherwise, you may not get the discount.

3 Ways to Coupon Like a Pro

Now that you’re armed with coupons, use these tips to maximize their value.

  1. Use Competitor Coupons to Your Advantage

    Many stores advertise that they accept competitor coupons, while others keep quiet about their policies, often because they vary from store to store. Your local store’s customer service department can clarify its policy.

  2. Forget Brand Loyalty

    Stores and manufacturers offer coupons because they want you to try new products, so you can’t expect to score serious savings if you’re waiting for your favorite brand.

  3. Stack Deals

    If you have both a store coupon and a manufacturer’s coupon, you can often “stack” the deals, or use both of them on the same purchase to score more savings. Check with the retailer’s policy first, of course. Serious bonus points if the item is also on sale.

A Final Warning About Coupons

A word of caution before you clip: Coupons are like a gateway drug to get you to spend money on new products. Branding expert Martin Lindstrom writes in his book “Brandwashed: Tricks Companies Use to Manipulate Our Minds and Persuade Us to Buy” that consumers who buy a new product are likely to stick to it for 1 ½ years.

“So if a store can figure out what new product you might like and offer a free sample or coupon or promotion persuading you to try it, it’s potentially locked up your dollars for the next 18 months,” he writes.

Before you use a coupon, ask yourself if you’d buy the item even if you didn’t have a coupon. If the answer is yes, clip away!

04 6 Strategies That Will Save You Big at the Store

The biggest part of saving money on groceries happens before you set foot in the store. But even once you’ve planned your meals and clipped your coupons, you still need to strategize while you shop.

  • Compare Name Brands to Store Brands

    To see if it’s actually worth paying extra for a name brand, compare its ingredient list with the store brand’s. Sometimes there will be a real difference, but often you’re just shelling out for fancy packaging. If you don’t have time to do the comparison yourself, check this list of 10 products you should always buy generic.

  • Shop the Store Perimeter

    It’s often cheaper and healthier to stick to the options around the store’s perimeter, where you’ll find the basics like fresh produce, meat, eggs and dairy. The middle aisles are more likely to contain prepackaged and processed foods that cost more.

  • Be Selective About What You Buy Organic

    Not all produce gets doused with pesticides. Resources like EWG’s Shopper’s Guide to Pesticides in Produce can help you decide what is worth buying organic and what can be bought conventionally grown and still consumed safely.

  • Compare Unit Prices Before Buying in Bulk

    Is buying in bulk better? It depends. A Portland State University study found that while buying coffee and spices in bulk saved up to 77%, nuts and seeds were actually more expensive when purchased in bulk. Before you buy, use your phone’s calculator to compare per-unit prices and figure out whether bulk really is better.

  • Look on the Top and Bottom Shelves

    “Eye level is buy level” when it comes to product placement. Grocery stores want you to spend more money, so they often put their priciest items at eye level, where they’re easiest to see. You’re likely to find better deals on the top and bottom shelves.

  • Think Twice Before You Buy Prepared Foods

    Shredded cheese, deboned meat and pre-sliced vegetables all make cooking more convenient. But every additional step a product goes through before it reaches you adds to its cost. Compare prices of items that haven’t been sliced, chopped, deboned or shredded to determine if the convenience is really worth it.

05 Get Cash Back After You Shop

Believe it or not, you can keep saving after you shop. Here are a few of our favorite ways to score cash back and gift cards.


We know it sounds strange, but Ibotta will pay you cash for taking pictures of your grocery store receipts.

Here’s how it works:

Before heading to the store, search for items on your shopping list within the Ibotta app. When you get home, snap a photo of your receipt and scan the items’ bar codes.

Bam. Cash back.

Ibotta is free to download. Plus, you’ll get a $10 sign-up bonus after uploading your first receipt.

Some cash-back opportunities we’ve seen include:

  • 25 cents back on any item
  • 25 cents back on strawberries
  • 50 cents back on frozen fruit snacks
  • $1 back on a box of tea
  • $5 back on a case of Shiner Bock beer

Notice a lot of those aren’t tied to a brand — just shop for the staples on your list and earn cash back.


Shopping for groceries online? One of our favorite ways to save is with Ebates, a cash-back site that rewards you nearly every time you buy something online. For example, Ebates gives you 10% cash back on online purchases at Walmart.

Plus you’ll get a free $10 gift card to Walmart for giving the site a try.

To earn your gift card:

  1. Sign up for Ebates with your email or Facebook account.
  2. Use the Ebates portal the next time you buy something. It’s connected to thousands of stores, including Walmart, Amazon and Target. You’ll need to make your first purchase through the site within 90 days and spend at least $25.
  3. Your account will be credited with rewards points you can cash in for your $10 Walmart gift card.


All you need to do is download the Shopkick app.

Once you sign up, the app pays you in “kicks” for walking into certain stores. You can redeem them for gift cards to a number of retailers, including Amazon, Target, Walmart, Starbucks, Sephora and Best Buy.

It pays you even more kicks for photos of receipts that include qualifying items you purchased in-store with a connected credit or debit card. You can also earn kicks for online purchases. You don’t have to do anything; your linked cards will automatically apply your kicks.

But don’t make the mistake of buying things you don’t need just for kicks. You know better than that.

06 How to Avoid Food Waste

The average household of four spends about $1,800 each year on food that goes to waste. Don’t like the idea of throwing away $1,800 every year? Follow these steps to make sure you actually eat what you buy.

  • Buy Frozen Produce

    Most fresh produce has a fridge life of a few days at best. But for frozen fruits and veggies, that window is up to a year, and the nutritional differences are minimal.

  • Make a Plan for Your Leftovers

    Find creative ways to repurpose leftovers by using them in new dishes, like sandwiches or tacos. Invest in good storage containers so your leftovers stay edible longer, and consider freezing them if you don’t plan to eat them in the next few days.

    Fruits and vegetables that are a little too ripe can be baked or mashed into a casserole or blended into a smoothie. Ripe bananas are perfect for banana bread.

  • Understand What Expiration Dates Really Mean

    There is no universally accepted food dating system used in the U.S. Manufacturers set sell-by or use-by dates based on when they believe food will be freshest; the dates have nothing to do with safety. That means you could be throwing away perfectly good food based on an arbitrary sell-by date.

    This guide explains what expiration dates actually mean and has some guidelines for ensuring food safety. The USDA FoodKeeper app also provides best practices of food and beverage storage to maximize quality and freshness.

  • Donate Extra Food

    Donate whatever food you know your family won’t eat. Technically, this won’t save you money, but it will buy you good karma and help others at the same time. You could take extras to a food pantry or give them to a family member or friend who could use the help.

07 Thinking Beyond the Grocery Store

If you’re really looking to buy groceries on the cheap, look beyond your supermarket. Here are some places that can take your savings to the next level — and help you eat fresh, healthy foods.

  • Farmers Markets

    Your local farmers market is a great source for locally grown, in-season produce. Want to save even more money? Go when the weather is bad; a little rain and thunder are enough to scare a lot of shoppers away. Or go 30 minutes before the market closes, when vendors often sell what they have left at a reduced price.

    One drawback: You have less selection at a farmers market, so it’s better to plan your meals around what’s available. That makes meal prepping harder.

  • CSAs

    Community Supported Agriculture groups, or CSAs, let you buy into seasonal shares of a local harvest on a weekly or monthly basis. You can get a wide variety of fruits and vegetables for a low cost.

  • Your Backyard

    For just a $70 investment (not including your time), a backyard garden could save you more than $500 a year on produce. When you’re growing your own vegetables, it pays to be selective. Salad greens, cherry tomatoes, green beans and herbs tend to be the most cost-effective.

  • Ethnic Markets

    You can often find produce, meat, spices and staples like rice at neighborhood ethnic markets for a fraction of what you’d pay at the grocery store. You’ll also discover new foods that will help you break the rut of your normal meal rotation.

Action plan checkmark Action Plan

You’re now armed with a plan to get your grocery spending under control. Kudos to you!

Take these action steps, and let the savings begin.

Average three months of grocery spending.

Examine one month’s grocery receipts in detail.

Use the USDA’s monthly Cost of Food report to set a budget goal for your household.

Schedule time for meal planning and prep each week.

Make a shopping list before you head to the store.

Stock up on pantry essentials.

Score coupons online through websites and signing up to receive emails.

Write your favorite brands to ask for coupons.

Take a picture of your receipts after you shop to earn cash back.

Buy good storage containers to preserve leftovers.

Explore grocery store alternatives, such as farmers markets, CSAs and ethnic markets.

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