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Gary,

My husband and I live alone. My mom comes over for dinner and breakfast 3 days a week, and I send her lunches for work 2 nights a week. We are spending over $400 a week for groceries. I am not buying extravagant things, and I really don't buy a lot of "junk" food. Where on earth are we going wrong? I see in the Tips section this week, a girl from Oklahoma says that she spent around $130 a month on groceries for herself and her husband?!?! How?! What is she eating? If someone could explain this for me. I feel like we are beyond help. What are we doing wrong? Is she adding everything into that bill??

Diane O.

Diane asks a great question. Groceries are the largest category of spending that we can affect without making major lifestyle changes.

According to the U.S. Statistical Abstract for 2002 the typical family of three spends $6,093 on food each year. And that includes $2,407 for food eaten away from home. So Diane's total is significantly above the norm.

But, as Diane points out, everyone doesn't include the same things in their grocery bill. The Abstract shows typical spending of $553 for 'housekeeping supplies', $693 for 'personal care products and services' and $399 for 'tobacco products'. Those are not included in the $6,093.

In fact, nine items (laundry detergent, peanut butter, fabric softener, toilet tissue, diapers, coffee, toothpaste, paper towels, shampoo) will account for $17 billion in annual sales. With the exception of peanut butter and coffee, none of these items are 'food' items. Other bill boosters are pet food and liquor products. And don't forget greeting cards and video rentals!

Many people buy non-food items at the grocery store. And even think of them as part of their grocery budget. With the rise of 'supercenters' more people are combining their grocery shopping with their 'other' shopping. Often it is more convenient to buy everything in one stop. But it's often not the cheapest solution.

If Diane wants to control her grocery spending, it's probably not going to be helpful to compare her bill to her neighbor's.  Every family situation is different. And some families are even able to grow or raise their own food.

A better way to reduce her bill is to study her own habits and see where changes could save money.

Start by analyzing your receipt. What items are the most expensive? Work on them first. Can they be eliminated entirely? If not, are there lower cost alternatives?

Buying junk food is not the only thing that can drive up your grocery bill. Your diet also makes a big difference. Vegetables and starches cost less than meat. A diet heavy in meat will be more expensive. Likewise low calorie, low sugar, low salt foods will add heft to your bill.

For instance, according to the Organic Trade Association consumers are willing to pay up to 25% more for organics than they would for non-organic equivalents. Some consumers will pay up to 100% more.

The grocery store is often not the best place to buy those specialty items. If you buy them often, look for more direct, lower cost alternative sources.

Another grocery bill booster is our desire for convenience. Most of us are short on time. Grocers see this as an opportunity to increase their profits.

Most are offering 'everything-in-one-box' type of meals. Others are experimenting with a menu plan. A portion of the store is stocked to allow the shopper to buy everything they need for a specific meal on one shelf. In either case, the consumer pays for the convenience of not planning their own meals and buying premeasured ingredients.

While you're waiting in line, take a look at your grocery cart. How much prepared food is in the cart? You may not have time to clean carrots. But you will pay extra for the little prepared ones. If you know the difference in price you can make an intelligent decision whether to save your time or your money.

Finally, Diane needs to be able to compare prices so that she can identify and stock-up when she finds a true bargain. The best tool for this is a price book. It's simply a listing of items that she commonly buys and the lowest price(s) for each item. That will help her identify the true sales. Shoppers who use a price book regularly claim to save up to 20%.

Diane will probably never get her bill down to $130 per month. But if she works at it, a lower bill is possible without a significant impact on her lifestyle.

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