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My fiancée came back from a new car wash facility today and for the sake of budget tracking told me that she would need to spend much more per car wash since the initial cost of turning on the machine is $1.75. As we know from my last article on where we usually go, we spend a total of $0.75.

This example confirms that the cost of doing the same thing can have a big difference depending on where we go. This also implies that many of the advices personal finance sites like ours give are inadequate. Sure, we suggest everyone to prepare our own food instead of eating out as I did here. This certainly saves us money but we could still be spending way too much money on preparing food if we aren’t a smart grocery shopper. For example, I could be eating out for $5 a meal, but I might easily spend more than $5 per meal if I eat at home.

Therefore, it is not enough to be satisfied merely on the basis that we make our coffee at home or prepare our own meals. We also have to look at whether or not we are doing so efficiently. Angus beef can cost between $5 to $35 per pound in grocery stores around my area, so it is not sufficient to say that we are being frugal if we spend $70 dollars per person just on steak per meal.

It is important that we do not train ourselves to think that we are being frugal when we really are not. One fun and effective way to do this is to limit ourselves to a certain grocery budget per month. That way, we can challenge ourselves to save more money per month by cutting down on the budget moderately. In the end, the most effective way of spending less is having less to waste at the beginning.

Another way is to compare your grocery budget with people who live around us. I would ask everyone to share their monthly bills but this actually works best when we compare it with our neighbors because prices in different areas can vary greatly. Every family has their own preferences so we do not necessary need to itemize and compare everything, but a warning signal should flash if we are spending much more than our neighbors.