Behind housing and transportation, food is an American’s third largest expense at 12 percent of overall spending. In other words, a person who makes about $50,000 per year will spend approximately $6,000 on food. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free This number will vary based on the amount of people you are supporting. But for the average, single American, let’s assume $6,000 per year, or $500 per month. This article is going to show you a way to slash that in half. Yes, $3,000 per year, $250 per month, $8 per day, or $2.67 per meal—all while eating healthy! Although this article has been crafted with the 20-something-year-old American in mind, I believe that anyone in pursuit of financial independence, regardless of their familial status, can benefit from a few of the tips in this post. Eating In vs. Eating Out The single most important thing you can do to reduce your food bill is to reduce the amount of times you go out to eat. Studies show that 72 percent of Americans visit a quick-service restaurant for lunch. We need to drastically reduce this number, not only for financial but also for health reasons. First, let’s tackle the health reasons. Because without your health, you have nothing. Health A study by WebMD shows that people who eat home-cooked meals are less likely to be overweight since home-cooked meals tend to consist of less fried food, processed sugars, soda, and trans fats. When you go out to eat, you often do not know what is in the food that is prepared for you. The probability is high that a part of that meal is killing you slowly—the salt and sugar in that special sauce, the carb-heavy bread, the cheese drowning in fat, the questionably cooked meat, etc. Not only is the food consumed not as healthy for you, but you also end up eating more of it. Studies show that eating out has led to at least a 50 percent increase in calorie, sodium, and total fat intake. Think back to your personal experience. How often do you finish your entire plate when going to a restaurant to get your money’s worth? Whereas at home, you might throw any leftover food into a container to save for later. At a restaurant, taking things to go can be a bit of an inconvenience. You may not want to use an environmentally-unfriendly styrofoam to-go box and carry the food around with you until you return home. That is—if you remember to take the food from the restaurant table. Related: The Foolproof Monthly Budget: How to Save Up Money to Buy Investment Properties Financial Benefits Now let’s get into the financial benefits. The rule of thumb in the restaurant industry is that the price of the meal will be three times the cost of the food. Right there, you are already spending at least three times as much as if you were to eat at home. Oftentimes, it’s much more. I recently went out to eat with a friend. We ordered a salad, with the ingredients being lettuce, carrots, chicken, avocado, cucumbers, tomatoes, and a few other vegetables. The total cost? Seventeen dollars after tax and tip! Let’s compare this against the price* it would cost me to make this exact salad at home without the 20 percent-plus tip and tax premium. A quarter of a pound of chicken at $3.18 per pound – $0.80 Half an avocado at $1.25 each – $0.75 A quarter of a cucumber at $1 each – $0.25 Half a tomato at $1 each – $0.50 A handful of shredded carrots – $0.40 A quarter of a head of lettuce at $1 – $0.25 Balsamic vinaigrette dressing – $0.10 *Prices are based on U.S. averages When you add all of these ingredients up, you get about $3.05 to make the salad. In this scenario, I need to pay over 5x the price to get the same exact meal. Is the restaurant’s salad 5x better than mine? Certainly not. In this instance, eating that same exact meal at home would give me a 500 percent after-tax return through savings. Not bad, huh? Just to be clear, I am not telling you to never go out to eat. Eating out occasionally is fine. Live your life. Be social. I just want you to be mindful of the impact restaurants have on both your health and your wealth, such that going out to eat is a secondary choice. Now that we know the superior way to eat is by cooking yourself, let’s take it a step further. How to Save on Groceries Erin Chase from $5 Dinners is the expert on grocery savings. Check out her site or BiggerPockets Money Podcast Episode #3 to learn a whole lot more. I can give you the premise, though. There are three opportunities for you to save: before you go shopping, while you are in the store, and after you get out. Let’s tackle these together. Before You Go in the Store Think of grocery shopping like a football game. You’ve got to prepare in order to win the game. As Benjamin Franklin once said, “By failing to prepare, you are preparing to fail.” So, how do you prepare? It takes about 10 minutes. Download your grocery store mobile app and see what is for sale this week. Yes, it changes every week. Once you know what foods are at the best price, cater your weekly meal plan around these ingredients. For example, if chicken is for sale this week, purchase ingredients to make three or four different chicken-based meals. Or if you are OK with eating the same thing all week, then just buy the least expensive ingredients to make your meals. In the Store You are well-prepared, you know what you need, and now it’s game time. Since this is where you actually spend your money, this is where you are the most vulnerable. The grocery stores don’t help. Ever notice how they make you walk past almost every single non-essential item before getting to the milk and eggs in the back corner of the store? The grocery store has a potent offense, but you’ve got an impenetrable defense. To combat the grocery store’s high-powered offense, one of my favorite Mr. Money Mustache articles, “Shopping With Your Middle Finger,” should help. (But keep the gestures to yourself or you may get kicked out.) In your head, as you walk toward the milk, flip off and secretly say “F&*^ you, [insert grocery product here].” This is oddly satisfying. Give it a try. Related: 5 Frugality Myths Americans Believe That Would Make Ben Franklin Cry After You Are Out of the Store Game over! After a hard-fought battle, I hope that you have come out victorious by successfully completing steps one and two, developing a grocery shopping plan and sticking to it by only grabbing what you need from the store. After exiting the grocery store, there are a few apps that allow you to take pictures of your receipts and give you cash back based on the items you purchased. My favorites are Checkout 51 or Ibotta. Pro tip: You can look at these apps as part of the preparation step and try to purchase either things on sale or things that you will get cash back for on whichever app you choose to use. This is where you get rewarded for sticking to the game plan. By only purchasing the items on your list, you can take the one to two minutes to save an extra few bucks on your overall grocery bill. I know this may seem like it is not worth your time, but let’s do the quick math. If it takes you one minute to save one dollar, that task you just performed is a $60-per-hour task, which translates to $125,000 per year. Obviously, doing this for every minute throughout the year is not sustainable, but if you can make $125,000 per year for one minute, why not do it? One Step Further The previous recommendations require little overall lifestyle change. If you are the type that likes to challenge yourself and continually push outside of your comfort zone, here’s one substantial thing you can do. Cut Out Meat Meat likely comprises 25 percent to 30 percent of your overall grocery bill. What if you completely cut meat out? I’ve taken on this challenge a couple times—although I usually don’t cut it out entirely. I just don’t buy meat at the grocery store. When I go out (which is rare), I usually reward myself with a meat dish. For me, this saves $10 to $20 per week off my grocery bill, and I enjoy the challenge. Conclusion If you truly want to make an impact on your food expense, your first order of business should be to limit the amount of times you eat out at restaurants, bars, fast food joints, etc. If you do go out, make sure it is for the social aspect and try to just order an appetizer and water. Keep alcohol to a minimum. That’s where restaurants make most of their money at your expense. Once you have reduced the frequency that you go out, I’d then recommend tackling grocery shopping like you would prepare for a football game. Create your game plan, stick to the game plan, and reap the rewards. By doing these two things, you will significantly decrease your food bill. If you want to go to the next level, try challenging yourself by eating a plant-based diet. In the end, your belly will stay skinny, your wallet will grow fat, and I hope that you will thank me. Bon appétit! How do you keep your food bill down (and eat well)? Comment below!