Search Results for: budget

Spend a Fixed Amount at the Grocery Store Every Week or Stock Up During Sales?

May 12, 2014 By MelissaB 8 Comments

A few months ago, I went grocery shopping in the morning on the first of the month, and I couldn’t believe how crowded it was. After all, it wasn’t a Saturday morning when the usual grocery shopping rush occurs, but a Wednesday morning.

I waited in line to pay for over 20 minutes. When I asked the cashier what was going on, she said that it was the first of the month, so many people’s SNAP benefits had just replenished. These people were stocking up after possibly having had very little to eat at the end of the month when they were out of funds.

This phenomenon is not unusual. Many people who are living on a tight budget (with or without receiving SNAP), after scrimping and doing without for the last 10 to 14 days of the month, are happy to go shopping and stock up. The problem is that this stock up can consume most of their food budget, and the cycle starts all over again.

I mentioned in my last post that my family is experiencing a period of low income and a tight budget. Luckily, I don’t foresee this situation remaining stagnant for years. Within another year or two, my husband will be eligible to apply for a much better job, and as my kids grow up and become more self-sufficient, I should have more time to grow my freelance business.

However, for now, we sometimes run into this feast or famine pattern. In our high cost of living area, we budget $700 a month for groceries for our family of 5. (We have food intolerances including beans, gluten, dairy, and eggs, so we have to eat a special diet.) The last week of the month, we’re eating an odd mix of foods, and we don’t have as many fruits and vegetables as we’d like.

Spend the Same Amount Every Day to Avoid Feast and Famine

I’ve been researching different strategies to help with our grocery budget. One that I found is rather basic–determine how much you can spend per day on groceries. For instance, in February, we can spend $25 a day on groceries ($700 divided by 28 days), while in May, we can only spend $22.58 per day.

If I’ve not been to the grocery store for 6 days, I’ll theoretically have $135.48 to spend on that trip, based on a 31 day month.

Using this pattern, I can avoid the feast or famine food cycle by making sure I have enough grocery money, even at the end of the month.

Drawbacks to Spending the Same Amount Every Day

The biggest drawback I see to spending the same amount every day is that there is not much flexibility to take advantage of sales. For instance, if I normally buy ground turkey for $2.95 a pound, but it’s on sale for $2.45 a pound, I should stock up. Maybe I’d buy 25 pounds at this discounted rate. That right there would cost me $61.25, or almost half of my weekly budget.

However, it would save me $12.50 on ground turkey, and the stock would last us a few months.

While spending the same amount every day helps even out the feast or famine cycle, it may not be the best way to stretch your grocery dollars. Instead, I prefer to buy on sale in bulk so I pay less and get more food, even if it means at the end of the month, each meal with meat has ground turkey in it.

How do you handle your grocery budget? Do you set a fixed amount to spend each week, or do you set a fixed amount for the month so you can take advantage of sales?

How a Drop in Income Turned Out to Be a Good Thing

April 22, 2014 By MelissaB 5 Comments

Over the last few months, my husband and I have lost some income. Not a little drop in income. About 20 to 25% of our monthly income. And let me tell you, we weren’t earning more than the median income for a family of five to begin with.

Our budget was already tight, so when the drop in income happened a few months ago, I’ll admit, I panicked a bit. I felt a little bit desperate. I’m sure those of you who’ve been in a similar situation know the feeling.

And then I took a deep breath, and told myself we’d be alright. And we are alright. We’re actually better than alright.

Taking Stock of the Positive

The first thing I did, after I calmed down a bit, was to look at the positive side. We had already paid off half of our debt, so we don’t have several debts to pay monthly. We’re only left with one student loan payment every month, so that is a relief. (When we started our debt repayment over two years ago, we had five monthly debt repayments that totaled almost $1,000 a month. Now, we only need to pay $315 a month.)

Secondly, we’re used to living on a tight budget because we’ve been doing so as we try to pay down debt. Our income drop, though not slight, was not going to throw us into a completely different style of living that we weren’t accustomed to. I’m used to buying my clothes second hand. I’m used to cooking all of our meals from scratch and not going out to eat. The only adjustment we had to make was buckling down even more.

Why Our Income Drop Turned Out to Be a Good Thing

While our budget is lean, we still had some fat there. We subscribe to Netflix for both streaming movies and DVD home delivery. After the income drop, I decided the home delivery at $11.99 a month could go. I had been thinking this for awhile, but I was afraid we’d miss the service. Guess what? We don’t. I can borrow most of the movies for free from the library.

In addition, I think much more carefully about purchases now. Buying something on a whim is no longer a possibility. I have to think carefully before making a purchase, which has made me realize I don’t need many of the things I’ve been thinking of buying.

I also took other frugal steps that I’d been to lazy to take previously. I had always read that making your own laundry detergent can be a big money saver. A year ago, I bought all the supplies that I needed, but I never got around to making it. Well, I finally did a few weeks ago, and it works great. Sometimes it takes circumstances to prod me into changes I should have made a long time ago.

Of course, we don’t want to live with such a tight budget indefinitely. But now I know that there are many cost cutting measures I’ve implemented that aren’t difficult. When we make more money, that just means I’ll have room for greater savings and paying off that last student loan.

Have you ever experienced a tight budget? If so, did you find it to be a good thing as I have?

Keeping Up With the Smiths

April 15, 2014 By Shane Ede 10 Comments

Keeping up with the Joneses is bad. We know that. From a financial perspective, we spend a great deal of our time overcoming the green monster called envy in order to keep our lives in some semblance of financial order. We know the Joneses down the street with their big, fancy new SUV. We see them going on long family vacations. And we know the guy that mows their lawn. But, we also know that there’s a pretty high probability that they still owe a ton of money on that SUV. That that family vacation likely was financed through a credit card. Their entire financial life depends on them keeping their well-paying jobs.

Forget the Joneses

I’d like to talk about another family. The Smiths. You don’t know them. We don’t talk about them like we do the Joneses. Why don’t we? Because, outwardly, their lives are nothing to be envious of. They don’t own a big house on a double lot. They don’t drive a brand new Escalade. Their family vacations consist of weekend trips to state parks or trips to visit family a couple of counties over. Outwardly, they may even seem a bit downtrodden. They may seem (GASP!) a bit poor.

Sometimes they are. Sometimes, they are truly victims of their circumstance, or their poor financial choices along the way. But, for every one of those families, there’s at least two that aren’t poor. They have well paying jobs. They have money in the bank. And they occasionally barbeque a steak on the cheap grill they have on their back deck. It’s those Smiths I’d like to talk about.

It’s the Quiet Ones You Have to Watch Out For

Why don’t we know the Smiths? Because we live in a society that is enamored of our celebrity. We hang on every word that that famous athlete, or famous actress says. We try and model our lives after theirs. They live a glamorous life, full of flashing photography, red carpets, and any number of endorsement deals.

Who wouldn’t want to be like that? Short of being famous, we decide that we’ll see how close we can get. The bank doesn’t turn us down for that big house, big car, or vacation to the same beach that the celebrities hang out on. Maybe we’ll even get to see one of them!

But, it’s the Smiths we should know. We should know people who live their lives responsibly within their means. We should know people who live for more than having our fellow neighbors think about how rich we are, and how rich our lives must be. We should be the Smiths. We should be the people who drive the reliable older car without the flashy rims and booming sound system. We should be the people who live in the smaller house that we try and repair ourselves.

Society may push us towards that Joneses sort of lifestyle. After all, what would become of some of the companies if we stopped trying to keep up with the Joneses and stopped buying all their luxury goods? What would the news and tabloids cover if we weren’t constantly buying their rags in order to find out what sort of clothes the princes and princesses of some foreign country were wearing this spring?

Shiny Facades, Crumbling Foundations

All around us, there are Smiths. We don’t notice them, and we rarely get to know them. We’re surrounded by the Joneses, and the shiny facades of businesses and economies that are driven by their reckless spending. But, under those shiny facades is a crumbling foundation. The economy of the world is on shaky ground. We saw just how shaky it really was in 2008. When the housing market crashed, it very nearly brought the entire world economy with it. Luckily, the economy was strong enough at the time to take a beating. It wasn’t strong enough to bounce right back. It’s been a long slog back to where we were. We aren’t even back there yet. There are still parts of the world that are hurting economically.

Imagine, for a moment, if we rebuilt that economy, not on the sands of bailouts and extended unemployment benefits, and instead built it on the bedrock of hard work and frugality that got us where we were in the first place. Imagine if we had seen the folly of our loose spending ways and tightened our belts, stuck to our budgets, and started building an economy that doesn’t shake and quiver at the smallest rise in unemployment, or the slightest miss in an earnings report?

What if, instead of running around willy-nilly chasing the lifestyle of the Joneses, we were calmly working ourselves into the stable economy of the Smiths? What if we all didn’t have wait for our next paycheck to buy gas because our last paycheck went to our mortgage and car payments? What if we were able to fill a tank of gas from the cash in our bank account and know that we still had our emergency funds to help us along should a real emergency come along?

We can. We can bring our spending in line with our earning. We can sell the fancy car that we don’t need. We can downsize our house to something that we can afford. Sure, the dependable used car you buy might not have as much chrome as the fancy one. It might not have the same heated seats. And the house you downsize to might not have a walk-in closet, or a jacuzzi bath tub. I’ll let you in on a little secret. You don’t need them. They’re luxuries. You only think that it’s normal to have those things because the Joneses told you it was.

We should be keeping up with the Smiths.