When thinking about how to tackle anything, I like to use the Pareto Principle, also known as the 80/20 rule. The important takeaway from this principle is that the majority of any given result (such as spending too much money) is usually driven by a small minority of inputs or causes. The same is true of spending.

For most people, the majority of their spending comes from The Big Three: housing, transportation, and food. Because the word food is in the name of this blog, let’s start there!

As usual, big results are often the result of many small decisions. If you’ve ever looked at your bank account at the end of the month and wondered where your paychecks went, thinking that all you can remember are relatively small purchases, you’re not alone and you know what I’m talking about.

The biggest drivers of spending on food for most people are dining out and small, regular impulse buys, such as a daily latte. Unless you’ve tried it, you may be surprised by how many hundreds of dollars you can save per month, simply by choosing to eat in. This translates quickly into thousands of dollars a year and over the years, tens of thousands if not more.

The prospect of preparing your own food may be daunting. Fortunately for you, it’s easier than it has ever been in human history to shift to preparing your own food and learning how to cook. With YouTube videos dedicated to teaching us everything under the sun and countless guides holding your hand every step of the way and pandering to every niche desire possible, you have no excuse not to try and a 100% chance of success. Sure, you might cook a meal or three that you don’t like or mess up, but that’s part of learning! Heck, you can even find guides to eating vegetarian keto on a budget, which is a niche within a niche within a niche, complete with meal plans, shopping lists, and recipes. Beyond your mother holding your hand through the process, it doesn’t get any easier than that.

Money on the table

First, let’s look at how much money we could save.

I pulled up our spending on food in 2018 to serve as an example. As you can see, we’re not the most frugal people in the world when it comes to spending on food, although we’re not the world’s biggest spenders, either. You’ll also notice that our spending on food is highly variable, and that it’s not a zero sum game; dining out does not reliably fill the “hole” of low grocery spending. In fact, they seem to be positively correlated, with high and low spending on both occurring at the same time.

As I’d suspected, there appears to be plenty of fat to trim, especially towards the end of the year! On average, we spent a little over $200 per month on dining out in 2018, so let’s look at three scenarios, cutting spending by between $100-$300 per month. This seems completely doable based on the data and is likely a good, conservative estimate of what others might save. It’s often helpful to think about changes in spending, behavior, and investment over longer periods, so we’ll look at the impact over ten years, which is also how long it would take you to retire with a 2/3 savings rate, starting at $0.

What you’ll see here, which may surprise you, is that this measly $100-300/month ends up turning into roughly $20-$50k! But the fun doesn’t end there. Now that you no longer spend that money every month, you can retire with less, so your target portfolio value has decreased! How much? I’m glad you asked. Let’s look at this handy dandy table together.

Portfolio impact table

Monthly	$100	$200	$300
Yearly	$1,200	$2,400	$3,600
Portfolio Impact*	$30,000	$60,000	$90,000
10-yr savings	$17,740	$35,481	$53,221
10-yr Impact	$47,740	$95,481	$143,221

*Portfolio Impact refers to the amount you would have to save to fully support this amount of spending.

These amounts are nothing to sneeze at. This likely translates to several extra years doing what you love instead of working for the man, depending on your situation.

Your health

Another benefit of learning to reliably cook for yourself is your health. Eating out healthily is often even more expensive than eating out without that goal in mind, and even if you think you’re eating healthy, you don’t always know exactly what went into that food and how it was prepared. When you cook your own food, you know every ingredient.

Generally, people who cook for themselves tend to eat more healthily than if they ate out, although that’s not to say you have free reign to eat homemade pasta, pizza, and cake for every meal. The basic rules of nutrition still apply, and regardless of your diet you should be prioritizing clean, whole foods and vegetables and minimizing processed foods.

Healthcare costs

With healthcare costs skyrocketing, not only will choosing to prepare your own food help your budget in an immediate, acute way, but it will pay massive dividends down the line, leading to a happier, healthier life.

While this is a deep and complicated topic that warrants its own post to cover sufficiently, suffice it to say that healthcare is expensive and is only getting more expensive. The healthier you are, the less you’ll have to pay into the system as you age. Every dollar you don’t spend can go on to work for you, creating more dollars in its wake.

While it’s difficult to quantify how much you stand to gain monetarily down the line in healthcare costs (likely far more than either of us can fathom, the way things have been going), it’s not difficult to talk about the acute and long-term qualitative benefits to your life.

Other benefits of eating healthily

If you’ve never taken the time to eat healthy for a while, be that due to education, upbringing, or what have you, you probably don’t realize how crappy you feel. My experience has been that eating healthily had a dramatic effect: I felt great! What was even more telling, though, was when I went back to eating poorly again. I felt like crap! “Is this really how I’ve been feeling regularly?” I wondered.

Let’s imagine your body is like a car. Are you a car person? Me neither. So let’s imagine your car was designed to take premium fuel (healthy food), but out of laziness, for economic reasons, or just out of ignorance you fill your tank most of the time with regular (unhealthy or processed foods). I don’t know much about cars, but my guess is you’re going to run into some problems down the road, even if you don’t notice anything immediately. Your car probably isn’t going to perform optimally on the way to needing repairs, either!

Here in America in particular, we’re so affluent and so hooked on convenience, that we’re making terribly short-sighted decisions as a society with our diets and our health. By choosing to live and eat healthily, you can both help avoid many of the chronic and acute diseases and conditions that plague modern society and upgrade your life by setting yourself up to think and feel better!

One of the principles my philosophy is based on is the power of compounding. How small contributions or changes compounded over time become far greater than most people dare to imagine. The same is true for your health. Eating healthy today may seem to make a small difference, but if you feel just a little bit better, think just a little more clearly, and react slightly faster every day by treating your body right and then use that advantage to make even better decisions, the results will compound into a hugely beneficial and advantageous impact over time.

Most people don’t like hearing simple truths that they probably already know, like “eat in and eat healthily.” We’re looking for some silver bullet to solve all our problems for us so we can continue on with our lives as before but end up healthier and wealthier as a result, right? While there’s no silver bullet, I do have some strategies, hacks, and tips for cutting your spending on food in a variety of scenarios.

Strategies and tactics for saving dough on food.

• Managers specials
  • Many people overlook managers’ specials. This is where you can buy heavily discounted food (usually meat and fish) that is about to hit the expiration date. The discounts can be huge, and since protein is often a large part of the budget, this can have an outsized impact on your bill. While you should always check any food you buy, there is generally nothing wrong with this food; you simply need to plan to cook it within a day or two. Why pay more?
• Deals/coupons
  • I simply keep an eye out for deals and coupons, especially when I’m at the store shopping. Some people ignore these, and you shouldn’t buy something just because it’s on sale, but if it’s something you were planning on buying anyway, maybe it’s time to try a substitute product or different brand. Maybe it’s chicken tonight instead of beef or tuna instead of salmon.
• Shopping in season
  • We have the luxury in our society of having just about any fruit or vegetable available all year round (this is more or less true in different parts of the country/world). However, different plants naturally grow in certain seasons. To get around this, farmers and food distributors go through all manners of trouble to provide you avocados any time of year, for example. Since it’s not a natural process, there’s extra work and thus cost involved. The closer to its natural season and where it was grown it is, the cheaper food tends to be.
• Not shopping at Whole Foods
  • Whole Paycheck is expensive! Haha. This is mostly a reminder for me, but where you shop makes a difference. For myself, it’s not just the prices but the fact that there’s so much good food at Whole Foods; it’s too easy for me to start shopping based on the delightful things in front of me as opposed to what’s on my list. Which leads us to…
• Avoiding food waste by shopping off a list made for a food plan
  • America wastes an outrageous amount of food. This happens all along the value chain, but one place that it happens is in our homes. Particularly if you are just starting to cook, it can be difficult to figure out just what to buy and easy to fall back on old habits, eating out or heating up a processed meal, which can lead to food going bad in your fridge. Even seasoned home cookers run into this issue. An easy way to combat this is to decide ahead of time what you’re going to cook, make a list of only the things you need for those meals, and stick to it.
• Avoid the center aisles
  • Other than for very specific purchases, you should stick to the outside of the grocery store. That’s where all the healthy, whole foods are. The center aisles have all the packaged, processed foods and other temptations you don’t need. They will also drain your wallet.  Avoid where possible.
• Amazon Subscribe & Save
  • Amazon has a program where you can get up to a 15% discount on items you order regularly (you have to subscribe for delivery every 1-6 months, although you can cancel a subscription or skip it for that month any time you like). While this isn’t specific to food (and many food items aren’t available for subscription), if you know you’re going to buy food, household, or cooking supplies regularly and they’re subscribable, it makes sense to take advantage of this program.
• Food delivery discounts
  • A temporary solution is to take advantage of food delivery discounts. These fall into two categories. First, companies such as instacart or Amazon Prime Now often offer discounts periodically or for your first order. While you may only be able to do this once per program, it will still save you a buck (or ten). Second, there are meal prep programs that will send you the exact ingredients you need along with recipes, such as Blue Apron or Hello Fresh. This can be helpful when you’re getting started cooking, and pretty much every one of these companies offers steep discounts on your first order (generally worth several meals). If you’re comparing to eating out, these are definitely cheaper, and the introductory offers may also be cheaper than the grocery store depending on how steep the discount is. Often, they’ll also present you with another offer when you go to cancel. Skipping from one company to another will get you through quite a few meals.
• Rewards programs
  • Many grocery stores and restaurants offer rewards programs or special offers, coupons, or discounts found exclusively in their apps. Use them! In the case of restaurants, this can often yield at least one entirely free meal.
• Cashback
  • There are many ways to get cashback, ranging from completely passive to prohibitively active. I cover these in this post. The most useful are Drop and Dosh, which are both completely passive, and Ibotta, which requires more effort but really pays off when it does, often giving you more than a dollar back per item, even to the point of being free.
• Comparing alternatives ($/2000kcal?)
  • This is really simple, but surprisingly few people do this. You should be considering alternatives for the things you’re buying, and it’s important to have a way to compare them accurately. Usually, this is by weight (for pasta sauce or meat for example). If you’re really trying to be a super saver, compare by $/2,000kcal (dollars per 2,000 calories, a sort of standard daily intake value). In the end, it comes down to cost per meal or cost per day (hence the 2,000 calories), and some caloric sources are much more expensive than others. Which leads us to…
• Reducing your protein intake
  • Protein is often over-consumed in America, and it’s expensive! Protein often occupies an unnecessarily large portion of people’s food budgets. There is a pervading myth in our culture that we need tons of protein or that it’s not possible to get enough from vegetables. This is faulty logic. Do your research. Even for athletes, anything beyond 1.5g/lb is unnecessary and possibly excessive, with diminishing returns starting around 1g/lb or so. For healthy individuals who are either sedentary or active and looking to maintain weight, you probably don’t need more than 0.5-1g/lb. While you may not be at this point, excessive protein is metabolically taxing to the liver and should be avoided. Add in recent research about the correlation (not causation) between red meat consumption (particularly processed meat) and chronic conditions like cardiovascular disease and cancer, it’s not hard to come to the conclusion to reduce protein intake for health reasons as well! This is going way beyond the scope of this article, but there is also a startling lack of diversity in the types of meat we eat. Try some offal or tongue or heart or something else weird sometimes. It’s good for you, it’s often much cheaper, and you might even like it!
• Eating food that is high in fiber and healthy fats
  • You saw this one coming, didn’t you? Foods that are high in fiber and healthy fats tend to be much more satiating than other types of food. Since most Americans overeat, that’s a good thing! These types of food are extremely healthy for you and are often much cheaper than protein! Think vegetables, dark leafy greens, avocados, and some nuts and seeds. While you may be able to find processed foods and foods high in carbs and inflammatory fatty acids for cheaper at times, they will end up costing you in the long run and will leave you feeling stressed and tired instead of light and energized. Don’t take my word for it; try it!
• Using the right credit card
  • The only reason I’m giving you this as not a dead giveaway is because I haven’t written about this topic enough on this site yet. Credit card rewards systems can be a huge help if used correctly. There are credit cards offering 5X (5 points per dollar) at times on groceries. If the points are worth 1-2 cents, that’s 5-10% back! While you may not get this good of a return all the time, even a few percentage points add up over time!
• Buying in bulk
  • This one is crazy to me. Are we really so lazy we’re willing to pay more just for someone to place food in a bag for us or cut it up slightly? Apparently, the answer is yes. You can often save quite a bit by visiting the bulk sections. For example, coffee is sometimes several dollars per pound cheaper if you simply put it in a bag yourself. This is an easy win.
• Costco
  • Costco and Sam’s Club are further examples of both prices for the same goods varying across retailers and buying in bulk. While you may have to pay for a membership in some cases, this can pay for itself, in some cases many times over. Pay attention to your situation and alternatives.
• Alcohol & sodas
  • Many people spend a lot of money on alcohol and/or soda. This is bad for both your health and your wallet. People often forget to count drinks like soda and alcohol when considering their caloric intake, which doesn’t exactly help the massive obesity problem we’re experiencing in this country. Cutting back on soda and alcohol can help your wallet and health both now and extending into the future.
• Meal replacements
  • I hesitated to include this, as I don’t personally recommend it as a long term solution, but if you’re eating out a lot and are struggling to eat healthier and/or cook your own food, it may make sense to temporarily bridge the gap for some meals with a meal replacement like Soylent. I have a friend who successfully did this. He started off using Soylent to replace some of his dining out or unhealthy, processed meals. He was able to both save quite a bit of money and shift to a healthier alternative on his path to transforming his diet and cooking for himself. In fact, last week he cooked Mrs. Wallet and I a delicious stirfry with naan and dahl. We were impressed!
• Secret shopper programs
  • One way to save a buck eating out is to get paid to do so with a secret shopper program, such as MarketForce or iSecretShop. These apps will pay you to try out restaurants, often reimbursing your entire meal and then paying you some minimal sum. While you won’t make much doing this, and you have to wait for opportunities (especially depending on your location), you can score some free or cheap meals this way, and you don’t have to cook!

Food for thought

Instead of looking at this as scrimping pennies (I still buy quality food because I care about our health and don’t just go for the cheapest thing), it’s helpful to look at it as a game. The frugal game. How little can I spend and still fulfill all my requirements for health and happiness?

Regardless of whether you find frugality fun yet, most of us (myself included – groceries are my spending weakness!) could be just as happy if not happier while cutting our spending on food, and all of us (including society as a whole) could benefit from a healthier diet and lifestyle.

Love,
(Your) Wallet

This post is part of a series on saving money on “The Big Three”: food, housing, and transportation.