Better budgeting for grocery shopping

When we talk about going over-budget, we often think about large, non-essential expenses like going on a holiday or buying a new laptop. In reality, grocery bills are often the culprit. This shouldn't be a surprise considering that food expenditure is one of the biggest expense categories in a regular budget. But does this always have to be the case? Here are 10 important tips for better budgeting when it comes to grocery shopping.

#1 Allocate a set portion of your budget to grocery shopping

In order to prevent overspending on groceries, you should first allocate a fair budget to your food expenses. This means taking your total net income and splitting it amongst your various spending categories. But how exactly should you allocate your income?

One of the most popular ways to do so is by using the 50/30/20 rule, where 50% of your income goes to essential spending, 30% to non-essentials and 20% to savings. Within each sub-category, you may then split your allocated income using activity-based budgeting. This involves allocating a set portion of your earnings to different activities, such as grocery shopping, essential bills and transportation fees. Ultimately, these "rules" are completely customisable and should be tweaked to suit your financial situation. Just remember to set aside a reasonable budget for your groceries so as to avoid both overspending and underspending.

#2 Plan your meals

What happens when you get to the grocery store with no planned meals in mind? In most cases, this often results in your overspending. This includes purchasing unnecessary items like snacks, as well as buying groceries you think you may use but instead leave in your fridge untouched for weeks. Both of these scenarios result in extra expenses. Snacks and sweets may seem cheap but could add up quickly. Additionally, food that is left in your fridge could get neglected and go bad, resulting in wasted items that need to be thrown away.

Having a meal plan could help you avoid these unfortunate circumstances. Set aside one day of your week to plan your meals in advance. You can be as detailed as you like with this. Ultimately, meal planning helps you create a more accurate grocery list with items that you know you will use.

#3 Choose low-cost alternatives

The range of prices you may encounter at a grocery store is astounding. Commercial brands tend to fall on the lower end of the price spectrum, while premium goods such as organic items tend to be almost double or triple the price of these items. Unless you have special dietary needs that stipulate you consume goods from a certain brand, try switching to a low-cost alternative instead. Alternatively, if you are certain that you want to purchase premium groceries, you should consider this preference while creating a budget. This means understanding the opportunity cost involved, and allocating a smaller portion of your income to another spending category in order to account for your higher grocery bills.

#4 Track your budgeting

The best way to stay on budget with your groceries is by tracking your expenditure and savings, often through smart money management tools. The Finder app, for example, is a popular budgeting platform that could help you monitor and save on grocery bills. It allows you to connect your bank accounts, credit cards, loans and investments, in a single dashboard. As a result, you'll be completely in control of your finances at any time of the day. You can also track your spending, regularly monitor your credit score, and shop around for the best savings deals — all in one place.

#5 Analyse your grocery shopping habits

Besides tracking your spending, you may only achieve better budgeting for grocery shopping once you understand your personal habits as a shopper. Do you have the habit of disregarding your grocery list? Are you someone who buys non-essentials on impulse? Do sales and discounts catch your eye? Take note of your behaviour while grocery shopping and be aware of any impulses you may have that drive your spending up.

#6 Make use of deals

Why spend more when you could save instead? That's where discounts and deals come into the picture. While grocery shopping, check out the sales aisle and see if any of your desired items are on sale. Remember to stick to purchasing items on your list. Alternatively, read up on any savings schemes you may qualify for. For example, select grocery stores offer student discounts. Additionally, certain charitable organisations may offer coupons on groceries for low-income individuals. Explore your options and see which deals you may qualify for.

"To save on grocery expenses, I find it helpful to go through and make a list of what's left in the fridge and pantry. From here, I find there's always at least one meal that can be made. I always have leftover veg + a handful of pasta in the pantry. That easily becomes a roast veg pasta for lunch or dinner with little extra groceries needed. "

Peta Taylor

Finder crew member

#7 Don't go grocery shopping while hungry

Better budgeting for grocery shopping starts with better self-control. However, going grocery shopping on an empty stomach makes this a thousand times more difficult. If you shop while hungry, it's more likely that items off your list will catch your eye. Your hunger will make all sorts of items more appealing, thus resulting in impulse buys. Alternatively, you might purchase too much of what you've specified on your list. Avoid these mistakes by having a hearty meal before shopping for groceries.

#8 Pick a discount grocer

We've talked about premium goods within grocery stores, but what about pricing across grocery stores? Due to branding, certain grocery stores tend to price their goods at a premium. For example, stores that stock up on premium items tend to raise the prices on the regular goods they sell as well. This comes with the image of being an artisanal grocery supplier. To avoid these charges, pick a store that offers fairly priced goods.

#9 Learn how to store your groceries

One of the best ways to reduce your grocery expenses is to prolong the usage of each batch of groceries. This means learning to prioritise your groceries according to how quickly they will expire, and storing them to reduce the likelihood of going bad.

Understand which types of grocery items tend to go bad quickly. This often includes fresh produce, such as fruit and vegetables. These items are the groceries you should constantly have an eye on. Consume them as early on as you can, in order to avoid any expiration surprises. Products like canned items, instant noodles or rice could easily last you a few months. Meats, on the other hand, have a shorter expiration period but could be preserved by proper storage in the freezer. Ultimately, these precautions could help you prolong the usability of your previous batch of groceries, thus reducing the amount you have to spend on upcoming purchases.

#10 Review your grocery budget each month

Your finances are constantly in a dynamic state. Anything could happen at any time, whether it's positive news like a raise or bad news like a demotion. Similarly, your food preferences are always evolving. You may suddenly wish to switch up your lifestyle and stick to a keto diet. Due to religious purposes, you might suddenly want to go vegetarian. These changes must be accounted for in your grocery budget. As a result, you should review your grocery budget on a monthly basis to make sure that you're allocating a fair portion of your income to groceries.

Written by

Trisha Bhullar

Writer

Trisha Bhullar is Finder’s Singapore-based personal finance writer. After working in digital marketing with multiple fintech startups, she acquired a strong love for everything related to finance. Trisha is currently pursuing higher education in economics and computer science, using her knowledge to provide a millennial perspective on modern finance. See full bio