With four kids, we buy a lot of groceries. We’ve switched to the cash envelope system for groceries (we fill up the envelope with cash at the start of the month, and when the envelope is empty we’re done buying for the month - it’s been a great system for us). We buy from four places:

• Costco (at the start of each month for staples like meat, peanut butter, fruits, cereal, bread, cleaning supplies, diapers & wipes, etc.)
• Wal-Mart (at the start of each month to get what we didn’t get at Costco and again mid-month to re-stock)
• Harris Teeter (to pick up a few things when convenience matters, because this is the closest to our house, and to take advantage of their great sale prices)
• ALDI (random trips to stock up on chips, flour & sugar, frozen packaged foods, and whatever else is in stock at the time)

Costco is great. We typically spend about $200 in our monthly trip to Costco. Much of it is spent on their house brand, Kirkland Signature (we weren’t thrilled with the Kirkland diapers or dishwashing detergent but have been happy with everything else). Their gasoline is cheap too, and I recently bought new tires for my Suburban at Costco ($400 for the set after applying a $60 coupon, and the same tires were more than $500 at all the tire shops I called around here). Costco is great for flowers, too - 2 dozen roses for $14.99, and mixed bouquets for the same price or less.

Wal-Mart is our go-to place for groceries during the rest of the month, and we probably spend more at Wal-Mart than anywhere else. Some things are cheaper here than Costco, especially if it’s the Wal-Mart house brand. We buy baby formula here (Parents’ Choice), drinks (Costco’s drink prices are fairly high), cereal (I’m a little bit of a cereal snob, and Malt-o-Meal is every bit as good as Kellog’s or Post or any other brand but much less expensive), some meats and most of our cold cuts (Costco’s large quantities tend to go bad since we sometimes don’t eat it quickly enough), over-the-counter medicine (especially the generic), paper products, and much more. Wal-Mart also matches all competitors’ advertised prices, though we don’t take advantage of this as much as we probably could. I’d love to hear from someone who does this and how well it works.

Harris Teeter has been high on our list the past couple months because they sent us a bunch of $20-off-a-$50-purchase coupons. So we skipped our Costco trip this month and instead did more of our shopping at HT. Between the $20 coupon and shopping their best sales (like most higher-end grocers, their regular prices are higher but their discounts are steeper too, so if you shop smart there are great deals to be had). We’ve made three Harris Teeter trips recently: first we got $129 worth of groceries for $71, then $143 for $68, then $71 for $40. All told that’s $343 worth of groceries for $179, a savings of almost half. This month we’ve gone to Harris Teeter to stock up on sale items then get the rest of what we need at Wal-Mart since their regular prices are so much better than HT’s regular prices.

ALDI is hit-or-miss for a lot of people. I’ve heard that some ALDI stores are dirty, though that’s not the case with ours here. It’s a clean store with prices that can’t be beat. The products are all generic with the exception of a few special-buy items in stock at any given time, but it’s typically pretty decent quality. We shop more selectively here as a lot of their cheeses are oil-based rather than milk-based and I don’t like their breads. Our staple items at ALDI are fruit juice, fruit bars, and frozen foods like pizzas, french fries, etc.

Groceries are a category where we do a pretty good job (Gretchen gets most of the credit because she does an amazing job with this, as with most other things), but I know there are others out there who do it better. Leave your grocery-buying tips in the comments.

ACTION ITEM #5: Figure what you spent on groceries and household goods last month (for us it’s about $600, or $100 per person). Plan how to reduce your spending this month by changing where you shop, buying more generic brands, or other money-saving strategies. And share your tips (or your questions for others) in the comments.