Food prices rise and families try to cope

It's the middle of the afternoon at Cooper's SuperValu on West 7th St. in St. Paul. It's not very busy. Two women are sitting on a bench, waiting for the van that will bring them back home with their groceries.

One of the women, Donna, says her groceries are more expensive today.

"I can see that my total bill has gone up, so you can tell. Prices have gone up," Donna says. "I bet $10, $15 per week."

Her friend Ruth chimes in.

"I have never seen prices go up this fast. I'm alone and I don't use that much. But I think it must be terrible to buy groceries for a family." says Ruth.

Food prices are rising, along with the cost of fuel. In the case of corn, it looks like there's a close connection between the two, as the demand for ethanol rises.

Across the river at the Mercado Central on E. Lake St. in Minneapolis, Miguel Payano says his tortilla company has to charge more.

"Tortillas are made of corn. When the corn prices go up it kind of forces us to raise our prices," says Payano, "or else there'd be no profit in the business. We'd just be at a standstill."

Payano says that he sees a change in his customers.

"People right now -- they're really being cautious with their money. Because sales have gone down a lot," he says.

Farther south, at Isabel's Coffee Shop on Cedar Ave. and 42nd St. in Minneapolis, the barista, Brad Hackle, says he's watching what he buys.

"I like to cook, so I like to buy better meats and stuff. But when everything's so expensive and everything, I can't be splurging," says Hackle. "So you gotta go for the sales and go that route, rather than the things you really want."

Looking for sales is one option. What else can families do when they're faced with a sudden increase in the price of something they can't do without -- food?

Ruth Hayden, a financial consultant and educator, specializes in helping couples manage their money. She believes that families have to respond to high prices by keeping spending down.

"What's important here is that they consciously spend. They will have to change some of their habits, because what they don't want to do is to go into debt for consumables," says Hayden. "They don't want to start putting this on credit cards and rack up a bunch of debt during this time."

Hayden says that one thing she suggests is to pay for groceries and other everyday purchases with cash. She says she pays cash herself, because when you pay with cash you are absolutely aware of the money leaving your hand.

"And you know how far it will go, and you make the decisions in the store," says Hayden. "And when you walk out, the transaction is done."

Hayden helps families manage their money better, and she helps them deal with the stress that arises when money is tight. She suggests that families sit down and talk about financial stress they're under, so they don't blame themselves -- or blame each other.

"This is a change in the economy. It's not that we're doing something wrong," says Hayden. "Otherwise, for couples, they start to argue with themselves. The stress comes into the family."

Hayden thinks this big price increase is serious. She says it's going to last a while. She wants families to get organized, to budget and to save.

"We are a country that obsesses about money, but we don't obsess about money management," Hayden says. "And I would wish that consumers would say, 'All right. Let's do this very well and take very good care of ourselves, so that at the end of this we're not in more trouble than we need to be."

While Congress kicks around an economic stimulus package, hoping to give us incentives to get out and spend more, Hayden suggests that individual families would benefit much more from learning to save on their food bill, and banking those savings.

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