Food for thought to rein in your spending

Opinion: It’s not just smashed avocado on toast you need to take a look at if your weekly food spend is getting out of hand, says Hannah McQueen.

Avocado gets a bad rap for undermining your savings potential, but in my experience food in general – which is much wider than just groceries – tends to be the biggest culprit for consistently blowing the family budget.

Since the 1970s, Otago University has tracked what basic healthy food costs to feed a family of four, including a teenage boy and a 10-year-old child. Its latest read suggests it costs $257 a week in Auckland, $260 in Wellington, and $244 in Christchurch.

Most of the clients I see would be spending up to 100 per cent more than that, especially once you incorporate all of what’s spent over the week – including at cafes, restaurants, on work lunches, takeaways, at the corner dairy and the school tuck shop.

One of the first methods we employ to get this back in check is to encourage people to use cash, for a few months at least, to regain consciousness of what they’re spending. Typically, this results in savings of at least 30 per cent.

If you’ve got teenagers in your house, here’s another idea for you. I’m working with a group of teens to improve their financial literacy, and we’re running a competition in which they take over the family food budget for a four-week period.

Using what their parents have been spending on food as a benchmark, we’ve challenged them to plan meals, do the shopping, manage the budget – and spend less.

They get to keep half of what they manage to save over the month, which has made them incredibly frugal when it comes to dishing money out to Mum and Dad for coffee and lunch.

Not all money frittered on food is about how much you spend, but how well you plan. Research by Love Food Hate Waste New Zealand suggests New Zealanders buy and then simply throw away $872 million of food each year. They put the average amount wasted per family at $563 a year, or just under $11 a week. That seems too low to me – I’d put it at closer to $20-$30 a week based on discussions with my clients (and my fridge).

If that seems like small fry to you, remember every dollar you put on your mortgage ultimately saves $2 in interest.

Meal kit delivery services have become increasingly popular and do seem to have helped rein in the food budgets of some of my clients. A Consumer New Zealand investigation found you pay a premium versus buying the same ingredients in the supermarket, with many at least 10 per cent more expensive. However, for some that would be a fair cost for the convenience and I’d argue it must be cheaper than shopping without a list and resorting to takeaways by Wednesday.

While it takes many factors to make a household budget work, the most common areas of fritter are the small, regular costs you’ve understated. It’s worth focusing on because it does add up and, if you lose track of it, things quickly get out of control.