It’s no secret that the cost of food has increased significantly in the past few years. And while purchasing food at the grocery store is still much, much (much!) less expensive than eating out, that doesn’t mean it hasn’t increased tremendously. There have always been techniques that help you save on your grocery bills and those are still very important and they still work. They include meal planning ahead of time, making a list (and sticking to it), buying generic brands when available (and the quality meets your expectations), taking advantage of sale prices to “stock up” on non-perishables, using your grocery store loyalty card to make sure you get the best prices, and using coupons (although now those coupons are typically digital). We’ve always done all of those (and still do), but we also take advantage of two additional techniques that many people are either unaware of or feel aren’t worth the hassle.
Using A Credit Card With Higher Cash Back On Groceries
I’ve written about this before, but as long as you are able to use credit cards responsibly, you really should be using a credit card at the grocery store that gets you more than 1% back on groceries. We use the American Express Blue Cash Preferred Card* (*referral link) which gives us 6% back on groceries at regular grocery stores (so not places like Walmart, Target, Costco, etc., that sell more than groceries). It currently caps out at $6,000 in yearly spend, so both my wife and I have one so that we can get 6% back on up to $12,000 a year in grocery store spend. And then we also have some Chase cards that give us 5% back on groceries one quarter of the year and that takes care of the rest once we hit the $12,000. Depending how we use those Chase points they are typically worth between 1.2x and 1.4x, so that 5x turns into at least 6%.
But that’s not all this card does for us. It gives us 6% back on streaming, 3% on transit, and 3% on gas. We have EVs so we don’t get to take advantage of the 3% on gas, but for many folks that can be a pretty significant savings as well. If you subscribe to Disney+, Hulu or ESPN, you can also get $120/year back for that, and there are occasional special offers you can get as well (we saved $75 on a car rental through Turo this year). You also get up to a $300 sign up bonus the first year and the annual fee is waived the first year, then is $95/year after that.
While some people might be concerned about the $95 annual fee after the first year, most people spend enough on groceries (and streaming, and gas) to come out way ahead each year (and if you subscribe to Disney+, Hulu or ESPN, that savings alone covers the annual fee).
Getting 5x Points By Shopping on Fridays
We use our grocery store (King Soopers, owned by Kroger) loyalty card to automatically get the best prices (as well as to automatically apply any digital coupons we’ve “clipped”). By default you get 1x (1%) points back on your purchase. It used to be that those points could only be used for fuel (gas/diesel) discounts at gas stations, but they’ve now added the ability to use it for cash back at the grocery store (which was great for us since we have EVs and could never use the “fuel points”.) We also recently signed up for a King Soopers Boost Membership (when it was on sale for $25/year). This automatically gives us 2x (2%) points on purchases, as well as free delivery, occasional selective Boost savings, and a free streaming choice. (We typically shop in person, but we came back from our latest trip with Covid so have actually used delivery the last two weeks and it worked great. It also makes it easier to make sure you are using any coupons that are available.) The 2x in points more than pays for the annual Boost Membership Fee (even at the full $99/year if we hadn’t gotten it on sale, not to mention the free delivery if you choose delivery.)
While there is no guarantee this will continue, for a while now they have also offered 4x points (5x for Boost members) if you shop on Fridays (in person, pickup, or delivery, although you do have to “clip” a digital coupon to get the savings). Because we are retired, we can easily shop on Fridays (and prefer it over the weekends as it’s less crowded). But even if we weren’t retired, we could choose to shop in person on Friday evenings, or do pickup or delivery on Fridays to take advantage of this. When you add the 5x (5%) to the 6% from our credit card, we are automatically saving 11% on our groceries each week (not including the loyalty card and coupon savings, which is likely another 5-10% most weeks).
Will using these two techniques make you independently wealthy? Nope. But many families are easily spending $1,000 to $1,500 (or more) a month on groceries. 11% of $1,500 is $165 a month, which isn’t bad for basically doing nothing different. And if you continue that for 30 years, investing the $165 each month (at the historical stock market return of ~10%), you will end up with $325,000. Small changes can have big impacts over time. Even if the additional points on Fridays goes away, we are still getting 8% back on groceries automatically (6% from the credit card, 2% from loyalty card/Boost membership).
So, if you aren’t currently using a credit card that gets you more than 1% back on groceries, that’s an easy place to start. Be sure to use your grocery store loyalty card to always get the best prices, and see if your grocery store has anything similar to King Soopers where you get 4x (or 5x with Boost) points back for shopping on a particular day of the week and see if you can make that work with your schedule.