The Dollar Stretcher

Good question. And, an important one, too. Because food is the third biggest item in most family's budgets (right behind home and auto). So overspending on groceries can ruin your financial plans quickly.

The U.S. Statistical Abstract contains the type of info that Bob's looking for. To get the detailed reports go to the section called "income, expenditures and wealth". You'll find a tab for "consumer expenditures". The information is generally about three years old. But, current enough to be useful.

According to the Statistical Abstract, families with incomes less than $70,000 per year averaged spending $4,562 per year on food. Those with incomes between $70,000 and $79,999 averaged spending $7,337.

The average spent on food for all families in 2004 was $5,781. Of that $3,347 or 58% was food prepared at home. The balance ($2,434) was for food prepared outside the home (i.e. restaurants, take out food).

What about family size? Those figures were for an average family of 2.5 members. And the average family included 6/10ths of a child under 18.

Bob's wife is partially correct. The average Los Angeles/Long Beach area family spent $7,194 on food. $4,064 at home and $3,131 for food prepared away from home. Of all the major metropolitan areas listed, it was the highest.

One reason it was more expensive was that people eat out more. Only 56% of the food expenses were prepared at home. By comparison in Tampa/St. Pete/Clearwater (with the lowest total expense) over 63% was for food made at home.

Family size also made a difference. For families with incomes between $43,200 and $72,600, a child less than 2 years old added $1,200 to the grocery bill. The older the child the more expensive they were. A 15 to 17 year old added $2,330.

Given all the data, it would seem that Bob has a point. Spending $1,500 a month plus restaurant bills is significantly above average.

But, I would caution Bob about being rigid in comparing his family to the average. The things that make our family unique (number and age of children, number of parents working outside the home, health and special dietary needs, etc) can drastically affect grocery spending.

Rather than look at statistics, there are some other indicators that will let you know if you have a problem. None of them are scientific measurements. But, if there are some savings to be had, you'll recognize it. Plus, you'll have some idea where to find the money.

The first sign is the 'what are we eating tonight' trap. You should know what's for dinner before noon. If you wait you'll be more likely to eat fast food or prepackaged meals. In other words, you'll spend more.

The second test is to check your grocery cart to see how much packaging and preparation has been done to your food. Every time someone slices, dices or wraps plastic around food it costs you. Sure, those snack packs are handy for school lunches. But, you'll pay dearly to save a few minutes a day. Do the math. You could be spending over $20 per hour to have someone cut and wrap cheese!

Next let's take a look in your freezer. Is it stocked with meals that you've precooked for future dinners? What about leftovers? Are they organized so they can be used? Or, is your freezer full of boxed meals from your grocer?

Speaking of leftovers, do you have an organized way to use them? Studies show that many families throw out 25% of the food they buy. Uneaten leftovers and food purchased but never served are a waste of your grocery dollar.

There are other signs that you're spending more than necessary for food. But these four will give you a quick and easy way to see if you have some work to do.

The good news for Bob's family is that it's fairly easy to save on groceries. You have many opportunities to save since you're buying food continually. And there are many tools to help you cut spending. Everything from pricebooks to menus and coupons. So Bob's family can solve the problem without moving away from Southern California!