Benjamin Franklin said, "A fat kitchen makes a lean will," and he was right. I was behind someone at the grocery store who was shopping with her son. They had two grocery carts jammed full of all kinds of prepared food, junk food, comfort food and a few of the necessary staples.

While I'm usually not that interested in what people are buying, I was shocked when their food bill rang in at more than $450! It didn't look like they were preparing for a party, either. This seemed to be what they were buying on a regular basis.

Grocery expenses
Many people now spend more money every month on food than they do on their car! That makes buying groceries the second-highest monthly expense after paying your mortgage or rent. Many people don't think to include food in their financial planning because it's a necessity and we need it to survive; however, this is one area where people lose control every week and overspend.

Saving just $20 a week on your grocery bill can save you more than $1,000 a year. Saving $60 a week could help you save more than $3,000 a year.

I first met Kimberly Clancy when we did a story on Canada AM about trying to save money on your grocery bill. Clancy runs her own website, www.frugalshopper.ca. The site is a wealth of frugal knowledge, where Canadians can go to find out about sales from coast to coast, free shopping advice, coupon tips and ideas on how to shave money off their grocery bill. I went shopping with Clancy and the two of us had the exact same shopping list. The money she saved was amazing.

Power of coupons
Without using coupons, I spent $133.89. Using coupons, Clancy spent $23.45. That's a savings of $110.44.

Imagine saving $110 on your grocery bill! On this visit Clancy did use some freebie coupons she was saving up for our demonstration, but she says she routinely saves about 25 per cent or more on her grocery bill every week using coupons, flyers and watching for sales.

Clancy says, "I think many people spend way too much money on groceries, especially when you go to the premium grocery stores. These high-end chains will have beautiful layouts, fancy displays and better lighting, but most premium outlets also own a budget grocery chain that has prices that can be 30 per cent cheaper and the food comes from the same warehouse."

Page 1 of 2 -- Find helpful grocery shopping dos and don'ts on page 2

Excerpted from The Smart Canadian's Guide to Building Wealth by Pat Foran. Copyright 2006 by Pat Foran. Excerpted with permission by John Wiley & Sons Canada, Ltd. All rights reserved. No part of this excerpt may be reproduced without permission in writing from the publisher.

Go with generic brands
One way to save on your grocery bill is to buy store or generic brands instead of national brands. They are usually much cheaper and just as good. (National brands have to hike their prices up to pay off those expensive TV commercials and magazine ads.) Beans that are canned for more expensive national brands are the same beans that go into the cans sold under the store's name brand.

I'll never forget touring a bottled water factory and seeing water going into different bottles with different labels. It was the exact same water being bottled, but the prices ranged from $0.89 a bottle to $1.59 for the same H2O!

Often, no-name camera film, batteries and blank CDs are also manufactured by the same companies that produce the more expensive national brand. It just makes sense to try the cheaper brand, and if it works or tastes fine then stick with it.

Familiarize yourself with prices
One of the best ways to save money on your grocery list is to make sure you know the prices of the products you use often. "You won't know what a good deal is if you don't know what the prices are. Just because it's on sale doesn't mean it's a bargain. When you use coupons and other promotional offers you'll get even more savings," says Clancy. The best sale items will be on the front and back of the flyer and when there is something on sale you use regularly, stock up!

Warehouse shopping and buying in bulk are also good ideas, but you can easily walk into a warehouse store with the best intentions to save money and walk out with only eight items that cost you $150, so care must be taken here as well.

Grocery shopping dos
• Do plan ahead
• Do use meal plans
• Do get organized
• Do avoid impulse shopping

Grocery shopping don'ts
• Don't shop on credit
• Don't buy name brands
• Don't buy junk food
• Don't buy food you're not sure you'll eat
• Don't shop when you're hungry

Admittedly, I'm not someone who would spend much time clipping coupons and many of us would find it hard to make the effort or find the energy to bother. While manufacturers issue about 2.6 billion coupons a year, only 97 million coupons are redeemed. Many people who do clip coupons are stay-at-home parents, retirees and students, but Clancy says everyone can benefit.

"Everyone has to eat and anyone who wants to save money can. Food is something we have to buy anyway and you should try to find savings, especially if you are spending hundreds of dollars a week on groceries." With all her coupon clipping, Clancy says she spends only about $50 a week to feed her family. "If you cut back a little you can save a little, and if you cut back a lot you can really save a lot. It's that simple."

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Excerpted from The Smart Canadian's Guide to Building Wealth by Pat Foran. Copyright 2006 by Pat Foran. Excerpted with permission by John Wiley & Sons Canada, Ltd. All rights reserved. No part of this excerpt may be reproduced without permission in writing from the publisher.