Beating Broke

Personal Finance from the Broke Perspective

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

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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

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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.)

drop in income a good thingSecondly, 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?

5 Quick Ways to Start Prepping. You’re Already Doing at Least Two of These.

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In my recent post about the state of the American economy, I told you that you didn’t need to immediately go out and become a prepper.  And you don’t.  But, much like anything else, it helps to be prepared.  You don’t have to have a bunker under your backyard, a whole armory in the bedroom closet, or enough food to feed your whole neighborhood for years.  You can, however, start making sure that you and your family have a good start in preparing for any disaster.  Here’s 5 quick ways to start prepping.  And you’re already doing at least two of these!

Stockpiling

You don’t have to have enough stockpiled to keep your family fed for months or years.  But, if there’s anything that this winter has taught much of the U.S., it’s that it’s very possible that you could find yourself stuck in one place for several days.

What should you stockpile?  Well, food is a good start.  Canned and dry goods mostly.  Beans, rice, canned vegetables (straight from the garden if you DIY), flours, grains, vacuum packed foods, and canned meats all are good staples that can go straight into your pantry and provide backup food sources should you be unable to reach a grocery store.  (also, if grocery stores cease to exist… but let’s not go all extreme just yet.)

Stockpile other goods too.  Toilet paper, pet food, matches, fire starters, medical supplies, and even ammunition if you have that armory in your closet.  Any essential that you use regularly that won’t spoil is fair game for stockpiling in case of emergency.

5 Quick ways to start prepping

Reducing Debt

If the economy crashes, do you know what the worst thing to still have is going to be?  Well, if you haven’t guessed it, that thing is debt.  If you think your hands are tied by debt now, just wait until the economy is in the dumps, you lose your job, and inflation kills your buying power.  Debt is your enemy, no matter the state of the economy.  Start with a detailed spending log where you list what you spend every day.  Knowing what you spend, and when you usually spend it, create a simple budget.  Stick to the budget, and pay down debt by whatever means necessary.  Get rid of it.  Even if the economy booms, you’ll still be better off.

Become More Sustainable

Sustainability isn’t just for hippies.  Being eco-friendly maybe attributed to the earth loving, free love, woodstock-ing people of previous generations, but today, it’s an excellent way to be healthier, and save money on costs.  There are lots of things you can do to become more sustainable.

The easiest way to start making a difference in your bottom line is to replace high energy consuming items with low energy consuming items.  LED or Incandescent light bulbs are a relatively cheap start, and last for years.  High efficiency appliances like on-demand hot water heaters are more expensive, but can save a lot on energy over the long run.  Try air drying your clothes too.  It takes a little longer, but make it a habit, and your energy savings will grow a lot.

Growing your own vegetables, installing rain barrels, and composting are also great ways to decrease your footprint, while saving yourself money.  You can replace that produce at the grocery store with home-grown veggies, use the water in your rain-barrel instead of the electrically pumped water from a well, or the municipal water, and you can save on what you put into the dump while providing nutrient rich compost for your garden.

Learn New DIY Skills

If the economy completely fails, there’s a good chance that your access to many of the services and products that you have access to now will be severely limited, or severely cost prohibitive.  Not only will learning new DIY skills (like growing vegetables, canning food, repairing items, building items (like a deck), and the list goes on) save you money by allowing you to not pay for someone else to do it, but you’ll also gain a barter-able service that you can trade for services you can’t do.

There are plenty of ways to learn new skills too.  You can just try it and see what happens, although, in my experience, doing so increases the chances that the project you’re working on will take longer or fail entirely.  If you look, you can probably find a local class that can teach you some of the skills.  Videos on YouTube and instructions on the internet (easily found through a search) are also great ways to learn something new.

Make Your Plans

We all know that we should have a plan so that everyone knows what to do should they wake up in the middle of the night to a house that’s on fire.  We give our children a plan should they get separated from us in a crowded place.  We create budgets to plan how we will spend our money, and pay down our debt.  Having a plan for an economic collapse and the conditions that could arise should it crash doesn’t cost us anything.  A little time, and some thought.  That’s it.  Do you have family that you’d “bug out” to?  Are there people in town that you’d want to help?  Are there people in town that would help you?  How will you get wherever you’re going?  Even if that’s just home?

Having a plan, and executing it if you have to is very likely to be the difference between uninterrupted life, and something far more unpleasant.

How many of these things are you already doing?  Which are you going to try out?

Original image credit:Robert Benner Sr., on Flickr.