The Stocking Up Principle, Part 1: How To Cut Your Grocery Budget in Half

One of the best ways to see some really significant savings in your grocery budget is to stock up on products that your family uses regularly, when these products reach your “buy it now” price.

What is a ‘buy it now’ price?

Hopefully you have started keeping your price book (in your head or on paper) and are getting a pretty good idea for the lowest price on your regularly purchased items. You may have even noticed that about once every 12 weeks these product will go on sale. That’s because most items are on a 12-week sale cycle, which is a marketing technique used by manufacturers.

The coolest thing about the 12-week sale cycle is that, very often, the manufacturer will also release a coupon — either printable or in the weekly paper — around the same time. Most often the coupon comes out a few weeks before the big sale.

Why do manufacturers release a coupon at the same time as a sale?

This seemed totally odd to me at first. Why would a manufacturer want me to be able to buy their product for pennies on the dollar? Why wouldn’t they just have the sale? Or just give me the coupon?

I did a little research into the methodology behind it all and here’s what I learned. First, coupons and sales are two great ways to draw attention to a product, but doing both of them is like a double whammy of attention.

Second, most people out there don’t shop like us couponers do! Yes, coupon use is up as a result of the recession, but even still, the vast majority of Americans never use coupons — and they certainly don’t combine them with a sale.

Third, if the sales and/or coupons get us to buy a product we previously hadn’t been using, manufacturers know there is a much better chance that we will buy it again in the future — even when it’s not on sale and we don’t have a coupon! (Fortunately we’ll outsmart them, though!)

So how does all this information help me know when & how to stock up?

Enough theory, let’s get down to brass tacks. Take one simple example: Cereal. If your family regularly eats cold cereal for breakfast, you might be paying as much as $4 or more per box. Our family can easily go through one box a week, and usually more.

But let’s say I buy just one box of cereal for $4 a week. That’s $208 a year on cereal.

Now let’s say I find a $.50 off coupon for my cereal, so I can buy it for $3.50 a box — a savings for about 12%. Not bad. Imagine if you could shave 12% off all your groceries? You’d be doing pretty good!

But you can still do better. Occasionally, a store will reduce the cost of that box of cereal to, say, $2.50 Now if you use that same $.50 off coupon, you’ll be paying just $2 a box. Woah! That’s a savings of 50%. You just saved yourself $104 a year on cereal alone. That’s starting to be “real money”.

But wait (do I sound like an infomercial yet?!), every 3 months or so, that same box will go on sale for really cheap. Maybe it will be on sale for $2. And maybe there will be additional incentives to buy more than one box – say a catalina for $5 off if you purchase $10 worth of cereal. So, now you get five boxes for $5, after catalina. And when you throw in your $.50 coupons, you will pay just $2.50 for all five boxes.

Suddenly you have gone from spending $4 for one box of cereal to $2.50 for 5 boxes of cereal! You are realizing a savings of 87.5% or $182 a year, just on breakfast cereal!

(For an actual example of how this applies in real life, check out my post from yesterday about spending just $.07 each on 6 boxes of cereal!)

So, how much cereal should I buy at a time?

When I first learned about stocking up, the math made sense to me right away. But storing 10 or 20 boxes of cereal at a time really went against my anti-cluttering grain.

In order to not be overwhelmed by my stockpiling I had to make sure to only buy what I knew we could reasonably consume. So, if Kashi cereal goes on sale at Target every 12 weeks or so, I knew I had to limit myself to no more than 10 or 12 boxes at a time.

I’d recommend that you aim to do the same. Stock up as much as you think your family will eat in a 3 month period. If you have some left over — or if you run out — by the time the next sale comes around, you can adjust your numbers.

As you begin to pay closer attention to the sales, you will be able to apply this stock up principle to more and more of your weekly food purchases. Sure, you will still have to pay $10.99 a pound for kosher brisket, but that hit won’t seem quite as painful when you’ve shaved hundreds of dollars off the rest of your grocery list!

Stay tuned later this week for parts 2 and 3 of this little series on the Stocking Up Principle, when I talk about hoarding vs. stocking up, and how stocking up allows you to be more generous. If you have questions about stocking up, please feel free to leave them in the comments section or shoot me an email at kosheronabudget AT gmail DOT com. I’ll do my best to answer you!

Have you started your own little stockpile of food? What food items does your family like to have stores of? Do you have any ingenious systems for storing and organizing your purchases?

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