Welcome back! Hopefully you’ve had a chance since my last post on Personal Finance 101 to start tracking your income and expenses, finding ways to cut extraneous expenditure that isn’t bringing you happiness and you’re feeling more comfortable saving for FIRE based on your own ethos / path!
The next logical thing to tackle would be the largest expenses that a household typically has:
Why are these the Big Three? Well let’s look at some statistics courtesy of StatsCan:
- 2015 median income per Canadian Household: $80,940.
- 2015 average expenditure on shelter $17,509, food $8,629, and transportation $11,909.
(I know I’m comparing median income to average expenditure, but StatsCanada doesn’t have median expenditure (Argh!). While the Actuary in me has trouble stomaching such a comparison, for this exercise it should be sufficient.)
Taken as percentages, this means Shelter (21.6%), Food (10.7%), and Transportation (14.7%) make up a whopping 47% of income across Canada! Is there room for efficiency? Let’s find out!
10.7% seems even a little low compared to what I’ve seen. I’ve seen friends and strangers alike in the grocery store stocking up on loads of meats and expensive prepackaged frozen items. Worst of all, from a frugality standpoint, are Meal Subscription Services like Blue Apron or Hello Fresh. While I get they provide recipes that get you out of a creative rut, and ship everything conveniently to your door, this is a NO through a frugal lens.
I won’t pretend to be perfect, my wife and I have had excessive grocery and restaurant bills in the past – but we have been more and more diligent over time. Especially recently, where we have significantly cut down our meat intake and it has made a difference in how we feel and on the credit card.
Currently, we are spending about $500 a month on groceries, plus about $100 on restaurants per month ($7,200 a year). So we’re not that far under the average ourselves! But we’ve made strides. Areas where we have improved that could be useful to you:
- As mentioned, reduced meat intake;
- Cooking meals en masse;
- Have a weekly schedule;
- Avoid high cost Meal Subscriptions;
Reduce Meat Intake
We have been having more alternative protein sources such as pinto / kidney beans, lentils, barley, etc. The great thing about beans/legumes is they are PACKED with protein, fibre and all sorts of vitamins.
As one of numerous examples, let’s look at the all popular chicken breast versus a personal favourite weapon, the ever fibrous green lentil:
Chicken breast per 100 grams:
- Calories: 165
- Fat: 3.6g (1g saturated)
- Fiber: 0g
- Protein: 31g
- Vitamin B6: 30% of daily value
Laird Green Lentils per 100 grams (Using the bag I’ve got in my pantry):
- Calories: 350
- Fat: 1g (0g saturated)
- Fiber: 31g
- Protein: 28g
- Iron: 65% of daily value
Nutritionally, I’d say per 100g you’re getting more value with the lentil by way of fibre.
“Ok, what about cost?”
Glad you asked. Okay so via a quick Google search, chicken breasts are approximately 172 grams and you usually get 2 per package. Prices may vary depending on where you live, but here in Ottawa, a 2x breast package will run you about $12 or so (non free range / organic, yada yada). While I bought this bag of lentils for $3 and got 907g!
Grams per dollar:
- Chicken Breast: 172g x 2 / $12 = 28.7g per $1
- Lentils: 907g / $3 = 302.3g per $1
You get 10.5 times more lentils than you do chicken per $1, and get a very similar nutritional profile (even better with the fibre). I don’t need to give any more arguments.
This is just one example, but you could look across the board comparing meats to beans/legumes and find fairly similar protein profiles while finding massive deviation on fibre and price per gram.
I’m not saying you need to cut out meat entirely – we still eat meat. BUT, it’s about rationing that meat – next time you make a Chili, you could forego the beef or reduce the amount of beef and increase the kidney beans for example. By mixing meat with much cheaper sources of protein, you can continue living a healthy life, reduce your food expense, and limit the number of animals being factory farmed!
Cook Meals En Masse
This is a staple for us. When we cook, we like cooking in large batches. This is no secret, in the FIRE community. We have a number of reasons:
- It’s significantly easier to do one batch and have multiple meals;
- You can cut down on overall prep time;
- It reduces our craving to go out and buy something “quick”;
We generally do this mass cooking on a Sunday so that we have a nice meal Sunday night and have lunches for work for at least a couple days. Then we may do another big batch on Wednesday for the remainder of the week.
For meals en masse, I’d suggest going simple. You don’t have to create anything overly elegant. Just make it simple, nutritious, balanced, and delicious. We definitely have staples here, and we like our routine meals. Some of these staples may be a turkey / kidney bean Chili, lentils & brown rice (from Chef Michael Smith), and bell peppers stuffed with pinto beans / barley.
There are lots of great recipes out there you can find in a number of creative ways too! Besides the obvious Googling, you can go to your local library and take out any number of cook books, or share recipes with your friends, family and neighbours.
My wife regularly checks out new cook books she’s never seen before from the library, skims through and flags recipes she’d like to try and creates a weekly schedule of meal planning. Which brings us to…
Have a Weekly Schedule
I really like this one, and I admit it’s new for us. We’ve been doing it for about a month now and it’s really clicked for us because:
- It simplifies your grocery shopping.
- Similar to cooking en masse, it reduces the desire to buy something “quick”.
If you make your meal plan ahead of time, you can aggregate your grocery shopping to do it once a week.
This is what we have been doing. We take an hour or so on a Saturday to comb-through the various cook books, find things we want to try and write down the ingredients we’re missing. You make one well calculated grocery run and that’s it.
- It is time efficient;
- It is gas efficient if you need to drive (if you can bike, go for it!);
- It is environmental (See point above);
- And because you have spent the money on the groceries, you should feel locked in to use what you have bought and limit any potential waste of food.
Avoid Pricey Meal Subscription Plans
Finally, you have to avoid Meal Subscription Plans.
Before I get into this, I understand the “Pro” arguments by my generation for these things as they cater to the On-Demand economy and these companies have done a great job identifying this “Want” in the marketplace. But let’s take a look at the impact long-term:
On average, these Meal Subscription Plans (MSPs) come out to about $10 / serving. Is this better than going out to a restaurant? You bet! Is it better than cooking at home? Certainly not.
I know that our household can cook a meal that comes down to $2 or less per serving. This is not “Cheaping Out” either! These meals often include large quantities of organic colourful vegetables! We then find a balance of meat protein and legume protein (sometimes vegatarian meals are prepared outright and exclude meat altogether, which really isn’t that bad coming from a meat eater myself!).
So I’ll use my household as an example…we are two active adults in our late twenties. If we used one of these MSPs three times a week, that is six servings between the two of us, where we are paying $8 or more as a premium. If we do this for the next 15 years, that’s 6 servings x 52 weeks = 312 servings per year. which will cost you, at 5% real return per year:
$53,860 in Early Retirement cash!! OUCH!
So try foregoing these services for the sake of your early retirement and independence. Try relying on yourself to think creatively, rather than relying on MSPs – it’s good to challenge yourself and develop life skills such as cooking!
Well, those are the tips from the FN household on food! It’s still a work in progress for us but we’re trending in the right direction.
It’s quite easy to track the impact this has if you have something like Mint to track your expenses as discussed in an earlier post. Make your budgets for Restaurants and Groceries and monitor your monthly usage in these categories. Ideally, you’ll see Restaurant $ go down, and the combined total of Restaurant & Grocery $ should start to trend downward as you become more efficient and more frugal!
What kind of tips do you have to share on the topic of food? Share your ideas in the comments section if you’d like – would love to hear some pro tips!