Reviewing Our 2019 Budget
In November of 2019 (before the pandemic), I was doing an annual budget review with my wife. I was taking a much deeper dive into our finances than I have done before. We were spending more money than we were taking in, and I needed to know why. We both work in healthcare and earn good wages. It felt like we were living check to check, and I knew that should not be the case for us. We were saving through retirement vehicles, but it was a struggle to make the numbers work each month. I did a little back of the envelope math, which showed we were spending too much, so I began the quest to find out where it was going (I like to use Mint to track my spending).
The Big 3
If you read any personal finance blog, you will learn about the Big 3 of spending for most families: Housing, Transportation, and Food. Knowing this, I started there. I knew I would make smaller changes and cut elsewhere, and I would get to that eventually. But I knew something big was happening, and I suspected it would be in one of those bigger categories, and it was. I was quickly able to eliminate housing and transportation as the culprits. Our housing costs were relatively fixed. We had refinanced to a low-interest rate mortgage, and our other expenses had not changed much. So that wasn’t it. We own both of our cars outright. They both have over 200,000 miles on them and are reliable. I quickly took a look at our auto expenses for the year and confirmed that this was not our issue.
$2300/Month on Food!
So that leaves food. Bingo! It did not take long to see that this was a problem. After five minutes of some simple math and I was in shock. In 2019 we spent $2300 per month on food. WTF!!! This was the smoking gun I was looking for. If we could change this, we could get back on track. Luckily, I had recently started listening to podcasts and my new favorite at the time was “choose FI.” They often spoke about the concept of two-dollars, per person, per meal. Again, some simple math (4 people in my family x 3 meals/day x 30 days/month x $2/meal = $720). Even if we “splurged” and went $3/meal, that is only $1080. We were at $2300/month, and I knew we had to do better if we wanted to reach our other financial goals.
How We Did It
My wife and I made a plan. For many, this plan may seem obvious. For us, it was a drastic change in the way we lived. Our plan consisted of the following:
- Only eat out 1x a month.
- Meal prep, every Sunday to have ready-made meals for lunch and dinner for most of the week.
- Bring lunch and snacks to work.
- No more coffee shops
- Eliminating the “occasional” take-out
- Stopping convenient store trips to grab snacks and drinks for the kids
- No more food and drink purchases at the baseball fields and/or skating rinks
- Prepare larger meals that could easily be divided and used for multiple meals.
- Shop at only two stores for food: a local discount grocery store and BJ’s
- Track and review or food costs each month and look for areas to improve.
- Issue the kids an allowance and debit card. If they want to eat out or buy snacks, they can
We Cut it in Half!
We followed this plan for all of 2020. The change was drastic. Not only did we cut our food costs from $2300/mo to $1250/mo, but we enjoyed our lives more by eating at home more. Our per person, per meal cost, went from $6.39 to $3.47. There is still some meat on that bone, and we are motivated to do even better. Our goal for 2021 is to get that to $3 per meal, per person. By taking an intentional approach to our food spending, we freed up over $1000/month to invest in our future and alleviate some monthly budget stress. We have been able to apply this same intentionality and focus to other parts of our budget with similar results.
If you have any suggestions for making more changes to reach our goal of $3 per person, per meal, please leave them in the comments below.
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