MICHEL MARTIN, host:
I'm Michel Martin, and this is Tell Me More from NPR News. Coming up, singer-songwriter Angie Stone on her latest gig, educating others about living with diabetes. But first, the U.S. is not exempt from the global food crisis. Many Americans are also having a harder time keeping food on the table. The Department of Agriculture is forecasting that all food prices will rise another five percent this year.
Today, in a special Money Coach segment we're going to talk about just what's causing the sharp rise in food prices here. And we hope to offer some practical ways to trim your family's grocery budget. Who else to guide us through this but our personal finance guru, Alvin Hall. And we're joined by Donna Maria Coles Johnson. She is the founder and CEO of the Indie Business Network. It's an organization that offers services mainly to home-based businesses. But she is also a world-class coupon clipper. Thank you both for being here.
Ms. DONNA MARIA COLES JOHNSON (Founder & CEO, Indie Business Network): Thank you.
Mr. ALVIN HALL (Money Coach): Thank you. Glad to be here.
MARTIN: Alvin, let's start with you. Food prices are expected to rise as much as five percent this year. There was a four percent rise last year. These are the highest increases in a decade. What's going on?
Mr. HALL: Yes. It's one word: fuel. The cost of fuel, whether it's gasoline, the fuel that's used to make fertilizer, natural gas, have all gone up. And a lot of those costs have been passed on to the consumer. Also, there's greater global demand for all of these products as India and China and other nations who want more food demand this. Everything is just going up because there is so much demand and so little product out there.
MARTIN: And as I understand it, another reason is corn.
Mr. HALL: Yes.
MARTIN: Which is both a bedrock of the American diet, but it's also implicated in the fuel increases. Exactly how does that work?
Mr. HALL: Well, what happened with corn, corn prices have doubled, and they've doubled largely because a lot of corn is now allocated to the new biofuels that a lot of industries in America are moving on to. And the country has set a deadline by which they want to have more ethanol and more of these bio-ethanol fuels available in the marketplace. So the amount of corn available which we would normally eat and use in bread and grains and other things like that have been taken up by this fuel craze, and therefore the amount in the market is shrinking.
MARTIN: Now people are already being squeezed by higher energy prices which we just discussed. They are also being squeezed by interest rate increases, which is having an effect on a lot of people's mortgages. How can people then cut corners on food? You have to eat.
Mr. HALL: You have to eat, and you have to learn how to use your money effectively when you go shopping. I'm a real, big fan of cutting the costs of food because I think it's actually where, given my experience, it's where most people waste the most money. By simply making some small changes in your budget you can actually save a lot of money on food costs. For example, if you shop with a list, if you look at what's on special periodically throughout the month, you get used to the patterns. And you can shift the family's budget appropriately.
Learn how to buy one basic dish, like a roast chicken or something like that, and then alter it throughout the week or freeze it and then begin the same dish next week. So I think it takes a lot more creativity and a lot more pre-thought. You can't just walk into a supermarket and buy whatever you want. You have to think about it more.
MARTIN: Now, Donna Maria Coles Johnson, you take this to a whole other level. And you came to us, in part, because as you know, we have our weekly visit with the Mocha Moms. You are a Mocha Mom. You are a very aggressive grocery shopper, and you've been doing this for years. Can you just briefly tell us how you got to be so hardcore about keeping your food costs in line?
Ms. COLES JOHNSON: Well, Michel, my husband was laid off his job in 2005, and a whole new world was opened up to us of having to struggle and cut corners a little bit more than we ever had before. We had two children under the age of three at the time. So, eventually, I met a neighbor who basically taught me a lot of couponing tricks and I've managed to cut our food budget by 50 percent.
MARTIN: Stop it! Fifty percent?
Ms. COLES JOHNSON: Yes. Yes.
MARTIN: How?
Ms. COLES JOHNSON: And your guest is right. It takes a little bit of preplanning. But I think the first thing for me was to absolutely commit to a budget. I spend a certain amount of money on groceries every week. On Sunday I go to the ATM and I take the cash out of the bank so I can feel that money going through my fingers. You'd be amazed at what an incentive that is to find a bargain. And I basically accepted that couponing takes a little bit of time, but the payoff is tremendous because we are able to save so much money. And it's something I highly advocate.
MARTIN: Here's the reason, I think, some people resist "couponing," as you put it. Number one, a lot of people feel that it encourages you to buy things you don't really need just to use the coupon, number one. And number two, it takes a lot of time. So how do you address both those issues?
Ms. COLES JOHNSON: Well, it can be addictive in the sense that you are like, ooh, I have a coupon for a dollar off something I don't need. Let me go buy this so I can save a dollar. Well, the logic, obviously, doesn't work. I suggest that people do try to carry cash because you will spend a lot less money when you feel it going through your fingers. And in terms of time, Michel, I got to tell you, with food prices going up, as your guest said, five percent. You know, who can't find a half hour a week or an hour a week to save some money so you can put it in your gas tank or buy whatever else you need.
MARTIN: Tell me how much you spent on groceries last week and how much you saved, and how did you do it?
Ms. COLES JOHNSON: I spent between 200 and 240 dollars on groceries last week. And the way I did it, Michel, was I went through the newspaper, I cut out the coupons for items that I needed. My mother sends me coupons and my aunt sends me coupons. So sometimes I'm able to go to the store and buy three or four things with three or four coupons, and that helps an awful lot.
The other thing I do, Michel, that's really significant, is I really don't have a lot of brand loyalty. If there's an item that my family absolutely needs, that they will not eat any other brand, I'll buy that brand whether I have the coupon or not. But otherwise, I will use a coupon.
MARTIN: And I should mention that you have your Donna Maria's top ten tips for saving money using coupons, which we will post on our website. But the other thing you talk about on your tips, which I never knew, is you could use the internet to get bargains. I never knew you could do that. You can go to the company's website and sometimes they'll have coupons?
Ms. COLES JOHNSON: Sure. I'll tell you a couple of easy examples. I was reading a magazine. I saw an ad for a brand I'd never heard of. They sold organic milk. I went on the internet. I googled them and found ten or twelve coupons for a dollar off a gallon of milk. The other thing is, last month, I needed a prescription filled for something that wasn't covered by insurance.
I came home, went on the internet and googled prescriptions at my local pharmacy. I used the name of the pharmacy and prescriptions. I actually found a coupon for a 25 dollar gift card if I bought my prescription, or if I had my prescription filled, at that store. So the prescription was 30 dollars which meant I ultimately paid five dollars for a 30 dollar prescription.
MARTIN: That's amazing. Alvin, I think Donna Maria might have you beat.
Mr. HALL: I think she's brilliant because she really exemplifies everything I've been saying for years. Go shopping with cash. That's really key. If you know you only have X amount to spend and you get to the cashier's, and you are about to run out, you'll make choices and you'll make the hard choices rather than saying, oh, put it on a credit card. Also, I think it's really important to look at coupons.
I refuse to pay full price for paper towels, for cleaning fluid. I just refuse because you know at some point during the month, or every other month, it's going to be on sale. She takes it to a completely different level. But over the past five years, my food bill per month and my household running expenses have only gone up five dollars each.
MARTIN: Amazing. Finally, Alvin, I wanted to ask you about food stamps. At what point are people able to consider food stamps? And I should mention that the number of Americans using food stamps this year is due to hit 28 million people, and apparently that's the highest level since the program was introduced in the 1960s. I wonder why you think that might be. Is that an indicator of issues in the economy? And at what point should people consider applying for them?
Mr. HALL: I think that the increase in food stamps is a direct result of people not having enough money to buy the basics. I think people are having to make some hard choices. Do I pay the rent and keep a roof over our head and keep the lights on or do I buy food? And when it gets to that point in your life, you should take advantage of every possible program you can: food stamps, free food at food kitchens around the U.S. in order to keep yourself healthy. Because you can only get work if you are healthy. And I think it's a sad state that the economy has gotten to this point where people have to make that horrible, horrible choice.
MARTIN: Alvin Hall is a financial expert, our money coach. He joined us from our bureau in New York. We were also joined by Donna Maria Coles Johnson. She is a consummate shopper. She is the founder and president of the Indie Business Network that provides support services to home-based businesses. She joined us from WFAE in Charlotte, North Carolina. I have the feeling we're going to return to this conversation. So I thank you both so much for joining us today.
Ms. COLES JOHNSON: Thanks for having me.
Mr. HALL: Glad to be here, Michel. Transcript provided by NPR, Copyright NPR.