No one denies that we are in an economy that is in some difficulty. The degree of difficulty you are encountering depends on where you live in the United States. Here in North Carolina, I figure we are right now in the middle of the pack… not too bad but not the best either. Of course, this situation could change very quickly.

So what would it take for the economy to rebound. The usual solution is that people will get laid off, the government lowers interest rates, companies lower prices and then people start spending again. Yet, that recipe for success is unlikely to work again any time soon. First of all the government through the Federal Reserve has lower the cost of borrowing as low as it can. The effective rate is 0% when you factor in inflation and the key point there is inflation.

Usually, when corrective factors are applied to an economy in recession, it is because inflation as a factor is usually minimal and for the past two decades or so, inflation has been historically low for a long stretch. Not now, though.

Everyone knows that the price of gas is at all-time high times. But slightly less talked about is the price increases at the grocery store. If the cart seems to be getting less for the money, then that is probably true. High fuel prices are responsible for a large part of that, for the transportation costs factoring in along with fertilizers made from petroleum and even the bio fuels which are consuming large amount of corn which would have gone to feedstock for cattle and poultry which means higher costs for meat.

What all of this means is that people in such inflationary times are going to have less to spent on other consumer good which means that the big engine of the US economy, the consumer can not be relied on to get the economy out of the rut.

But getting back to the grocery store.

I do most of the grocery shopping for the family which came out the fact that I used to do most of the cooking for the family. Since Andrea has been home for the past few months, she has done most of the cooking but I still do the grocery shopping.

I have been quite aware that in one way that manufacturers are trying to hold the line on their food prices is making their products smaller. I think the more well known of grocery shrinkage is the ice cream container which has shrunk by 10% for many brands. But not all items lend themselves to shrinkage and that means prices go up.

Beef is nearly impossible to buy now with prices at $8-12/pound for basic cuts. Forgot about steaks unless they are on a sale. Bread costs more. Milk costs more; I recall a 2qt container was about 2.69, now it is 3.19. Produce is out of sight; corn, salad greens and the list goes on.

There is not a lot I can do about the prices. Not much I can do about the grocery items I need every week if I want to keep my family healthy. But I can change the way I shop.

First of all, I have to avoid impulse buying. It is a bad habit of mine that when I am at the store to pick up things that look interesting to try out but ended up in the cupboard or freezer unused for quite awhile. If we actually set down a menu for the week and buy groceries to the menu, I think that would remove unnecessary items. Of course, the downside is that you lose some flexibility in doing something different from what you have planned. Related to this is buying things for a recipe that you would not ever use anytime soon again. Spices are the real offender here. A bottle from the shelf goes for $3-4. That is a luxury that I can not afford anymore considering that like most people, only a dozen or so spices are regularly used. Perhaps, it is time to grow my herb wheel.

It would not hurt if we scale back on the junk food snacks. I think my cart sometimes is half filled with too much snacks and not enough real food. It still come down to setting down a menu and then translating that menu into a proper list.

Another problem we have is that I am a heavy coupon user. Sad to say, coupons have not been useful now as they were in the past. If there is any time for coupons, it is in this sort of economy. Anyways, one problem with coupons is that sometime they like to introduce new things which I sometimes buy. This is called buying to the coupon rather than to the need. I need to stop doing that and I focus on what is on the list.

We are pretty heavy user also of private label brands. Quality is never as good as the most popular manufacturers but the price just can not be beat. Even with coupons, popular brands still are much more expensive than the private labels. There are some things I will not compromise on like laundry degerent but the greater limitation is that there are for the most part, no private label alternatives to many of the things we buy.

A good thing to do so to remain on track is leave all the cards and checkbooks behind and just take cash to the grocery store. You can not spend what you do not have on hand. Far too long, I toss something into the cart with the point it is only $1.25. Thing is ten of those sort of items end up adding $15-20 to the overall cost of the cart. Staying focus on what you can afford requires effort and being constrained by the amount of money you have on hand does help.

One option for us use a warehouse store like Costco or Sam’s Club. For items like paper products, we have found it useful but the problem I have with those stores is typically, I overbuy and get things like puff pastry appetizers that we really do not need and things like 2000ct of vitamins that would take months to go through. If we are going to shop there, we have shop smarter.

All of this will help us in dealing with the grocery bill but in the end, we will have to simply downscale our eating habits. More pasta, less meat. Smaller meals, no more feasts. Less snack and an emphasis on eating healthier. Waste less especially on expensive produce. We probably will not realise a lot of savings or none at all if grocery prices keep rising but at the very least we can keep them under control.