I am about to share a word many people do not like to hear when we’re talking about money!

(photo by 2bgr8STOCK)

BUDGET.

It conjures up ideas of deprivation and lack of fun for many people — it’s kind of like the word DIET!!  However, a budget can actually be very freeing!  A budget will allow you to know where the money is going!

Without a budget, you’re probably overspending.  In fact, without a budget, I’m not convinced your coupon savings will be making a big difference in your actual grocery bill!

Do you have a grocery budget?  Do you have any idea how much you spend on groceries?  Weekly?  Monthly?

This is (in my opinion) one of the first items you need to look at when you are trying to cut your grocery bill.  You MUST know how much you are spending!  Here are three quick steps for setting a budget:

1)  Track your spending.

Ugh (yes, I can hear your thoughts!! 🙂 )!  It’s sort of like tracking the food you eat when you’re on a diet, isn’t it?  But research has shown people lose the most weight when they are tracking their calories.  I think the same holds true for money.  You must know where it is going!  You must know how much you are spending!

Start this month by tracking all your grocery expenses.  Write them down.  Use whatever is easiest for you — a computer, a notebook, or even your phone!  If you have receipts from previous months, go through them and add them up!  The idea here is just to get an approximate picture of how much you’re spending per month.

2)  Once you’ve examined your expenses, decide how much you think you can cut back.

Crystal, in this video from Money Saving Mom, recommends experimenting with a $20 per person per week grocery budget.  I realize that may seem pretty low for some of you, but the point is to pick a budget that is going to stretch you a little!  Our budget is currently $300 a month (but take into account that we already have a freezer full of beef)!  For some of you that may seem low, for others of you that may seem high!  Keep in mind, I’m just sharing this with you as an example! Each family has their own goals and needs, so you have to make a workable budget for YOU!

Also, make sure that you do not try to cut back too rapidly — if it is causing frustration or despair — step back.  Reevaluate the budget you’ve set and change it!  Budgets are not set in stone.  They are changing and workable guides!

3)  Stick to your budget!

The quickest and easiest way to make sure you’re sticking to your budget is to pull your grocery money for the month out of the bank and put it in an envelope!  Use this money for your groceries — and when it’s gone, it’s gone!!  I think you’ll be amazed at how much more aware of overspending you become!  You’ll also see more savings in a shorter amount of time.  Check out this article for a little more information about the envelope system.

I’m going to be honest with you, I currently use a debit card for most of my groceries.  Because of my money personality, this has worked well for me.  I realize research shows *most* people cannot stick with their budget when using a credit or even debit card, so if you’re new to all of this or find yourself over budget regularly, I recommend using cash. 

If you use a debit card, there is a fabulous software program called Budget available (I first heard about it from over at Blogging with Amy)!  I absolutely love it!  It is an envelope-system on the computer!  I record my debits, and I can see how much I have in the envelopes at all times.

I’m definitely not saying that setting a budget is easy.  But much like anything, if you want to achieve success, you need to see where you are…and make a plan to get where you want to go!

Next week, I’ll be sharing my second step to cutting your grocery bill in half!!