Wednesday, March 21, 2012

"Saving at the Grocery Store": Use Cash!!

If you really want to start saving money at the grocery store, leave your debit and credit cards at home and bring only cash.

Recently, my husband and I started using Dave Ramsey's envelope system for certain areas of our budget: namely Groceries, Gas, Entertainment, & Clothing. Each week when I deposit his check, I take out a lump sum in cash that is allocated to each of these four categories.
    The objective is to spend only our budgeted amount for each category, and when that amount is gone, then we have to wait until the next week to replenish it. There is no "robbing Peter to pay Paul," meaning you can't dip into another envelope to cover overspending in another area. When the Grocery envelope is empty, there is no more money to spend in that area. That's it!

    In implementing the envelope system, I have had to be much more disciplined about how I plan to spend the money I have each week. That means paying VERY close attention to what we need versus what we want, only buying necessities, shopping multiple stores for sales items, and clipping and matching coupons anywhere I can. I even bring my calculator to the store to ensure that I have enough money available in my Grocery envelope to cover the cost. {We no longer have any credit cards and rarely use our debit card.}

    Here are some of the things I have learned simply by utilizing a "cash-only" approach at the store:

    1. You WILL have to be prepared when you go to the store. Without a grocery list or menu plan, you set yourself up for overspending because you will be more prone to make random choices as to what goes in your cart. I always go to the store with the following: (1) My Grocery List, (2) Meal Plan for the week, (3) Coupons, (4) Store Ad, (5) Grocery store's frequent shopper card (if applicable), and (6) Grocery Envelope.

    2. You WILL pay closer attention to what goes in the shopping cart. I have discovered that without a credit or debit card to cover me if I go over budget, I am much more attentive to what I'm buying and less apt to casually drop in a bag of chips or carton of ice cream that wasn't on my list. 

    3. You WILL know how much you spend at the grocery store each week. This is good to know for two primary reasons. One: If the amount you have budgeted is not enough--that is, you continually overspend each week--then you may need to increase your budget temporarily or permanently. Two: If you have money left over each week, then you may want to decrease that budgeted amount and either put the extra money into savings or allocate it to another category. 

    4. You WILL save money!  Since we adopted the "cash-only" approach at the grocery store, I have discovered that I was significantly overspending on food and then having to dip into our checking account for gas money. By having only a set amount to spend in this area, I am limiting our grocery store purchases and no longer relying on my debit card for extra purchases. In this way we are saving money.

    How can you get started using a "cash-only" approach at the grocery store?
    If you don't already have a budgeted amount for Groceries and have no idea what you spend in a week, start by collecting receipts from your trips to the store. If "Groceries" include "Household Items," be sure to keep store receipts for both. After three or four weeks, you should have a good basis for determining an average amount you are spending each week in this area.


    Week 1 Receipts
    $32.50 + $16.00 + $7.50 = $56.00
    Week 2 Receipts
    $41.75 + $22.25 + 6.00 = $70.00
    Week 3 Receipts
    $29.25 + 24.50 + $10.25 + $6.00 = $70.00
    Week 4 Receipts

    The 4-week average is approximately $71.00. So, you might start your Grocery budget around $70-75. However, if you feel like you are spending a lot more than you should be at the store, then you might want to aim for a lower budgeted amount, say $60-65, and see if that is doable.

    I would strongly encourage you to start using a "cash-only" approach at the grocery store. Try it for a few weeks, and see if you don't save money. Without a credit or debit card, you will pay much closer attention to what you buy and also probably eat a whole lot healthier too! 

    What are your thoughts on using cash versus a debit or credit card at the grocery store? Have you found that using cash keeps you from overspending?

    I am praying God's richest blessings on you as you endeavor to be good stewards of His generous provisions!

    For other helpful tips for saving money at the grocery store, check out my other posts & stay tuned each Thursday:
    How to Make a Price Book
    Menu Planning 
    Menu Planning: The Ins & Outs
    Shop at Multiple Stores
    Couponing: Pros & Cons
    Couponing: Where to Find Coupons 

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    1. We have used the Dave Ramsey envelope system too and it does work.. it's hard to stay disciplined! Good for you for sticking with it!

      1. Steph, you are so right about being disciplined! I was just telling a friend on Facebook how many weeks I will spend most of the money in my grocery envelope early in the week and have next to nothing by the end of the week. You REALLY have to assess what you know you'll need (i.e. diapers, toilet paper, soap) versus wants.

    2. Excellent post! We've been cash only for a long time now. I found that I take ownership of my spending when I have cash in hand rather than the "invisible" money from the debit card. I hope you don't mind if I share this post on FB,

      1. I would be honored if you shared my post on FB. Thanks so much, Betty!