Saturday, March 26, 2011

Weekly groceries March 26 2011

I did a quick mini-inventory of storage pantry food and regular food this week, and we filled in a few things as well as taking advantage of some sales. We spent $15.54 on canola oil, which brought us back up to enough for at least a couple of months (use of this varies a lot from week to week). In the meantime, I can watch for a good sale as this is an item that seems to have gone up recently quite a bit. And 2 four-pound-bags of sugar for $1.94 each and 3 pounds of corn meal for $2, not great prices, but we were getting low on these.

Very little produce was on sale this week, and we only picked up some mushrooms for a low fat/cal supper soup and 3 apples, plus milk, bread, enchilada sauce,  and soy sauce. Almost everything else took advantage of sales to build up the pantry and storage foods. We picked up almost $20 of boneless skinless chicken on sale, 9 twelve-ounce-packages of a good brand of pasta for $.50 each, a couple of cans of diced tomatoes at $.50 each, a canister of oatmeal for $2.59, 2 one-pound-jars of natural-style peanut butter for $1.25 each, one pound of pearled barley for $.65, cocoa, salad dressing at $1.25, 2 pounds of brown rice at $1.29, and frozen diced onions for $.88.  I also picked up two packages of taco seasonings on sale for $.32 each to test for flavor, though we're more likely to use these to work out adjustments to our own seasoning recipes.

My total was $83.59, of which almost half went for chicken and canola oil. Not our best week, and we let a couple of things slip past at the register that didn't ring up at the correct sales price (cost me about $.90). But we picked up over 20 pounds of dry staple foods as well, plus some canned items that are going into the pantry. I could probably have gotten the milk and just enough of daily items and things we actually need immediately for about $20, or less.

Oh, a word about dry foods like flour. Insects often love these, which could ruin your storage strategy. I recommend storing in sealed containers on upper shelves. And we use bay leaves around flour, sugar, dry beans, and instant mashed potatoes as a natural repellant. If you doubt the efficiency of herbs, you may be able to find some kind of commercial repellent. Or, if you have the freezer space, some of these freeze well. I'd suggest freezing in small packages so you only take out enough for one or two weeks at a time.

One month!

And today makes one month of daily posts, yeah!!

Friday, March 25, 2011

What do you get out of it?

This is a topic that most Americans never think about. Not only where your money is going, but what kind of things you spend on. At the simple level, durable items are things that you have for the long term, like furniture. Consumables are things like food, movie tickets, and gasoline. Generally, durable items are a better choice for concentrating your money, but that isn't the only consideration. And some things like clothes may fall between those categories, depending on the exact item you purchase.

The other considerations are: Is it a productive purchase? And is the level of the purchase utility or luxury?

To give some examples. A bed is pretty much a necessity, even if it's nothing more than a couple of blankets on the floor. A couple of blankets on the floor are utilitarian in the extreme, and most of us would pay a higher medical cost from sleeping on a hard floor than we saved by not buying a futon or mattress. A simple frame with a mattress, sheets and blankets are generally accepted in the US as a minimum bed. This is a good, durable purchase for utility. However, a $4000 brand new sleigh bed with a custom mattress that practically helps you out of bed in the morning with a custom made quilted bedspread and silk sheets may be a durable purchase, but definitely is also a luxury purchase. It may have resale value, but it may not either.

Food is a consumable, obviously, but also a necessity and productive (it is, after all, "fuel" for the engine of our bodies.) My bean soup or sporngj are definitely utility-they're cheap and nutritious and easy to make, especially if you buy the ingredients on sale. However, if you made the bean soup from organic handpicked beans grown by the signs of the moon on a farm in the center of a city and each bean was individually picked and inspected only by PhDs, you're probably paying a luxury price for that same pot of bean soup. BTW, I ate a lot of organic produce when I could afford it---or grow it myself, but I've seen some of it with prices that I could only account for by this kind of exaggerated method.

That explains durable/consumable and utility/luxury. How about productive? OK, I get $250 that was a gift with the requirement that I spend it on "something fun". I could spend it on new TV or on a sewing machine and fabric for quilting. Both can be fun (lots of people spend a lot more money quilting than the finished value of the products in a strictly practical sense) and both are "entertainment". But the sewing machine has the potential to be a productive purchase while the TV is not. You can use the sewing machine to make quilts which can become cherished gifts or even a minor micro-business. You can also use that same sewing machine to repair clothes (saving money) and make other things like children's costumes that you then do not have to buy. So, it CAN be productive. I said potential because if you buy it, make half a quilt and store it in the closet for years untouched, you might have been better off with the TV.

And then there are the items that fall squarely in the middle of all of these. Clothes, for instance. Say you have $100 to spend this month on clothes. Person A goes out and buys a name brand dress to wear to a party, wears it two or three more times, then it's too dated and sits in the back of her closet. Person B buys 3 or 4 pairs of pants and half a dozen cheap shirts at bargain store XYZ, and those that don't fall apart in the laundry are also dated within 6 months. Person C buys 3 pairs of really heavy jeans and 5 well-made "classic" sweaters from a thrift shop, clothes that she wears for 4 or 5 years  and has a little money left over to boot. Person D has a friend who does beautiful sewing, and pays her to make 2 simple A-line skirts for her that she wears to work for 10 years.

Person A made a luxury purchase, and while the dress may physically last, it really was a consumable since it was worn so few times. Person B made a utility purchase, but it was also consumable. Person C made a moderately durable utility purchase. Person D made a durable purchase, and paying for custom work might be luxury. But it is also productive since the skirts become part of her work wardrobe and look better since they are actually made to fit HER, so in this case, luxury probably depends on whether or not her appearance matters for work purposes. She also probably saves money over the life of her purchase as well as putting money in the pocket of a friend.

A lot depends on your particular circumstances. What's a luxury for one person is well within the budget of another and may serve practical reasons (an interior designer who entertains at home may feel that her $4000 bed is a "business" purchase). In general, durable practical goods are a better investment of your money than a consumable luxury item. Be realistic and honest when evaluating things (and evaluate everything this way).

Thursday, March 24, 2011

Budget dieting

OK, so these are two things that are hard to get to go together. And something people don't understand is that it's very easy to end up overweight when you're poor. That's because, just trying to get enough to feel reasonably full, you're usually eating a LOT of cheap starches. And telling people they should have the discipline to go hungry all the time is just plain sadistic. The history of dieting shows that while most people can go hungry for a few weeks, very few can go beyond that. When you're poor, you can't substitute high nutritional quality low-fat-and-calorie foods either, and after a while, your body starts desperately craving things because it NEEDS more protein or whatever.

With that said, dieting is one of those areas where watching the small things can make a bigger difference than you think. I realized this when I began checking different brands of 100% whole wheat sandwich bread. A single slice can range from 50 to 120 calories, with the protein content varying from 3 to 5 grams (something you should particularly watch while dieting, you NEED protein). Unfortunately for me, the 50 calorie bread is almost always $2.50 or more a loaf. However, there's another brand that's 60 calories a slice and almost always under $2, and I get it. The cheapest 100% whole wheat bread would save me about $.25 a loaf, but runs about 80 calories a slice, so I consider the trade off worth it. Since I eat about 4 slices of bread most days, I cut out 80 calories a day.

Mayonnaise. I actually use very little of this at a time, but I did compare brands. Normal mayo runs about 110 calories for a tablespoon. I use about a teaspoon or less at a time, but that's still almost 40 calories. I found an olive oil-based mayo that's 40 calories a tablespoon and costs exactly the same as the regular mayo (mayo's one of those things I feel more comfortable buying a "brand" anyway).

Hot dogs. My favorite brand (kosher hot dogs, which I like not only for the taste but because I feel confident in the quality of ingredients) comes in different "fat" contents. The regular hot dogs run about 120 calories each, I think. The reduced fat ones are 90 calories. The fat-free are 40 calories. When these go on sale, I buy up the fat free hot dogs and freeze them for my lunches. I can have two hot dogs on two slices of whole wheat bread with a little mayo for about 225 calories. The regular items would run about 500 calories.

So, paying attention to these little things in my lunch can make 275 calorie a day difference. It take 3500 calories, I think, to lose or gain a pound. This one change ONLY in selecting the item for calories would theoretically take off about a pound in 2 weeks with no other change  (assuming you're currently in an equilibrium.) My cheap bean-and-rice lunch soup, with just a little meat added and served over that 60 calorie bread, is, I estimate, about 250 calories per lunch. Cheese in particular is worth watching. I've found mozzarella is usually the lowest calorie inexpensive cheese.

One problem I have to work around is I have IBS and some foods I can't eat. I'll never give you a recipe (that I've personally tested anyway) using banana or any member of the cabbage family (cabbage, broccoli, cauliflower, brussel sprouts, etc.) But something I've found that helps with both budget and diet is making a list of my favorite produce and the calories for them. I can watch for those things to go on sale and stock up. For instance, asparagus is 18 calories for 6 spears (before adding any fats or cheese). Half a cup of mushrooms is 12 calories.  Avocados, however, are more like 150-200, possibly higher depending on the size. Sugar is 25 calories a tablespoon, but keep in mind you probably get a lot of hidden sugar in a day if you're eating convenience foods. Added sugar is a good area to eliminate some calories, btw. I've used a measuring teaspoon for my coffee sugar to help me remember.

I also have proteins on my list so I can make a well-thought choice on them. Two large eggs, boiled, are about 150 calories. Scrambled, about 220. Broiled chicken is about 185 calories for 3 ounces, but about 245 for fried. The ground turkey I use is about 175 calories for 3 ounces, but you can get lower fat types, for a higher price. Beef and pork are generally higher calorie but you can make a difference in how you cook it. Fish is probably lower calorie, but isn't in my budget (and I'm not a big fish fan) so I haven't tracked it. I can get a quart of plain yogurt for less than $2, and I use it in place of sour cream. It takes a little getting used to, but it's really good on a baked potato, lower calorie and fat, and cheaper than sour cream. It's also helpful with digestion if you have problems like I do. Fat free milk is a good protein source, but make sure you drink it with a meal with some fat in it to get the most benefit from the nutrition.

Wednesday, March 23, 2011

Dealing with bonanzas

OK, I'm using bonanza to mean any extra financial "bonus" you get beyond your regular income. The most common one for people in the US is probably a tax refund, bonus at work, or an inheritance. The problem with these is people often think of this as "fun money." Even worse, I know a lot of people who spend twice as much as they're expecting---before they even get it---then wonder why they're so short after they get it.

Instead of thinking of this money as a freebie to spend on frivolous "rewards," this is exactly the money that should go to either paying off consumer debt or toward your financial cushion. Where normally you try to save between 5 and 25% of your income, think of this money in the opposite. Take 5 to 25% of this money for "fun" and the rest should pay down debt or go into savings. If you have little debt and a healthy emergency fund, take 25% to play with. Be honest about your finances though (honesty is absolutely the first necessary step to getting money under control). If you have debts that are pinching you month to month or little savings, only take about 5% of this for fun. If you're truly on the edge, you may want to consider not touching any of it. Even if you have a well-funded emergency fund, a truly stable job, and no debt, putting at least half of this away (maybe into retirement) keeps a good habit in place.

It can come in other forms too, of course. If you aren't salaried, it can come as pay for extra hours, even overtime, or you might sell something (you just discovered a rare and valuable thingummy in the attic), or you might get a bit of extra work (your second cousin paid you $200 to keep their kids for the weekend). Again, DON'T spend this money before you get it, and definitely don't spend more than you're getting. Pay your emergency fund or debts first, and keep a responsible amount for fun money.

For instance, I got some extra hours this past week. I'd known I'd have some, but I was only expecting about $40 worth and was not planning to touch any of it. Instead, I worked about $120 (after tax) extra. Now, my income is pretty low because I'm a full-time student and during terms, I can only work part time. But I have an emergency fund and no consumer debt. So 5% of $120 is $6. I thought about it and decided that for ME, the most bang for that money in pure pleasure was buying really good gourmet coffee several mornings before work. It may not sound like much, but I really do love good coffee, and I got a lot of pleasure out of doing something I normally can't, more than most people get out of a fine meal at an expensive restaurant. Sometimes, luxury is a matter of perspective.

Tuesday, March 22, 2011

It's all in how you look at it

One of the main themes I've been trying to get across here is the idea of attitude. Whether being thrifty is satisfying or drudgery is all in how you approach it. Me, I take a lot of pride in solving problems and coming up with better, cheaper ways to do things. Most of those things make me feel good, not deprived, every bargain or make-do makes me want to tell someone about it. I also have a lot of drive to be creative, and this is one of the forms it takes for me. But there are things that I don't do, and I've never been in circumstances that forced me to them. Some of them, I could bring myself to look on with pride, but others WOULD feel like drudgery.

I have very diverse friends, from some who grew up very poor and others who grew up very well off, and the full range in between. Some of those who grew up poor are clearly embarassed by how they lived and try very hard to put distance between them and that way of life. My mother was one. But I know others that you'd hardly guess they were poor as children from the way they talk about their childhoods. This isn't to say that the poverty didn't have effects on them, this is to say that their family found ways to be happy in spite of those challenges. My children grew up pretty poor, but I think I managed to make it happy, and after the divorce, secure and stable because I made sure that they knew that I was planning for things and how much I was saving---not in a guilt trip, but showing them as something to be proud of.

But there's another group that honestly baffles me. There are people who grew up very well off, yet seem to feel that they were not, or even bordered on poor. I don't say that they're pretending. I'm saying that they weren't as well off as people around them, and they completely lack the experience to compare their lives to the truly poor of the US (much less the poor of other countries) as well as a confusion between needs and wants. And in some cases, this may also be the result of a parent or parents who was completely unable to budget. It doesn't matter if your parent makes a salary in the top 20% of the country; if that parent or parents spend 120% of their income every month, you grow up in a family where everyone's always stressing about paying the bills, and even running out of grocery money by the end of the month.

So, attitude really makes the difference, I think. And that brings me to the second concept: enough. It's one that has almost been forgotten in our consumer culture where more is always believed to be better. I think more is just overwhelming and numbing. People with too much don't appreciate much of anything, and worse, it's the thrill of the new thing, not the thing itself, that drives them. I've tried to work on the concept of "enough", and I find it helps a lot in my attitude. Enough means not owning things that I don't actually want, enjoy or need. Among the "everyone has" things that I don't buy or own: sodas, cable TV, and, um, well, a TV. Yes, I got rid of my last TV a couple of years ago and don't miss it at all. And a bonus is that I have much less pressure to acquire junk without the TV advertising and not-so-subtle messages in shows. I could cheerfully give up telephones as well, but family and friends would object.

On the other hand, I own three computers, all of which I use, want, and enjoy. Need, probably not.

Monday, March 21, 2011

The cheap wardrobe

There are a lot of ways to approach this. To be honest, many of my ideas will probably appeal more to men than women, and in some ways I'm a minimalist. And I'll be upfront, I'm just not into clothes. I think mostly this has to do with the fact that even when I was skinny, it was impossible to get nice clothes that fit right (in fact it was more of a problem then). Blue jeans and t-shirts worked, though.

First, most people have a lot more clothes than they need. And a lot of clothes dry rot while sitting in the back of the closet, unworn, for years. So, start with an honest evaluation of your needs, and I do mean needs. For most people, this is a week's worth of clothes suitable for work, three pairs of jeans or sturdy casual pants, a couple of sweaters or sweat shirts, two or three casual shirts or t-shirts, two to three pairs of shorts or skirts, a light rainproof jacket, a winter coat, and a swim suit. I base that list on the idea that many people have to go a week between washing laundry. If your work clothes are relatively casual, possibly something nice for weddings, etc. Also, you'll need enough underwear and socks or hose for a week. If you're willing to wash by hand, you can get by with as little as three pairs. You can get by with one pair of shoes for work and one pair of sneakers, but most people want at least one pair of sandals or boots too. But stick to neutral colors so you can wear them with anything.

To get the most out of this core wardrobe, choose things for maximum versatility. I recommend picking a single color of pants (or skirt if you insist) and jackets, if needed, for your work wardrobe, preferably a neutral. I tend to go with black, you can wear almost any color shirt with it. Then pick shirts that you can wear with that color. If your pants are navy blue, pick shirts in reds, yellows, rusts, creams, whites, or coordinating shades of blue or purple. Extend this color choice to your casual clothes (that way you can demote work clothes to casual clothes). Being able to mix and match clothes means you don't spend a lot of time on your clothes, and no shirt is tied to just one pants or skirt. In general, avoid really extreme cuts in your clothes or wild colors or prints. Those look too dated too fast (which is the reason designers use them). Save the personality for accessories.

Take the color scheme further. When I find black socks that I like and think will hold up, I buy four to six pairs of identical ones. If a single sock gets lost or holed, the extra can be worn with any of the others. Eventually a second one gets lost or holed, and you're back to an even number. If you bought 4 pair, you have to lose or hole 7 before you don't have a pair anymore. A bonus to this is I don't have to match socks at 5:30 AM before I've had coffee.

While many of you are probably thinking this is extreme, honestly you could take this further. A person who is able to wear casual clothes for work could get by with American standards of cleanliness with as little as three sets of clothes. Boring, but doable. But for most of you, work out this basic "gotta have" core of clothes. Then sort through the rest. If you haven't worn something in 6 months or no longer have anything you can wear it with, seriously consider donating it to charity (or if too worn to wear even for cleaning the garage, turn it into cleaning rags or craft material.) Even if you have worn something recently, if you have more than three to four weeks of clothes, seriously think about which you really want. Or if you have something you absolutely love but nothing to wear it with, make finding the matching item a project.

Some of you have major considerations of seasonal weather. Think items that layer, and have items for your summer wardrobe that can be worn as part of a layer in the winter. Even with that consideration, do you really need more than 2 weeks worth of heavy sweaters? Oh, and seriously consider clothes that can be washed over dry clean (unless you HAVE to wear nice suits for work). Dry cleaning is a major budget sink. If you do have to wear suits, buy washable shirts and pants that coordinate. The jacket can be worn for several days between cleanings, and since your pants and shirts are all based around the same colors, you mix and match.

Spring is a good time to do an honest evaluation of clothes, and either consign or donate things that are going to waste. You'll find this makes your life much easier. Having a "scheme" for your clothing will make shopping for clothes much easier, and save a lot of money when you avoid buying things you'll never wear.

Make your wardrobe fit you and your needs and preferences. If you really sincerely get huge amounts of pleasure from clothes, can afford them and don't mind devoting the time to take care of them and store them, then go for the large wardrobe. But even then, a basic scheme can make life easier and avoid expensive "I don't have anything to wear!" with closets that are bulging. And for those who want to save money on clothes, here's a strategy to do it.

Sunday, March 20, 2011

Sodas or Saturns

There is a lot of advice on how to budget and save and where to put your priorities, some of it conflicting. One that I came across online years ago and seemed to be a popular "theory" was, in a nutshell, don't sweat the small things, do all your savings on the big things.

This idea, promoted by several writers, all men for some reason,  basically centered around the idea that saving a dollar or two here or there wouldn't make any difference and tracking exact expenses was a waste of time; you should go for saving on big purchases like cars, then don't put your money into safe savings, invest!

I can only think these ideas are written by men who have no involvement with their families' daily budgets and make considerably more in a stable industry than most of us. Yes, shopping carefully on the big purchases is important. If you can spend 20 or 30 hours shopping for a car, and save $1500 on the price, that's at least $35 an hour return on the time.

But little things DO add up over time, especially if your income is much more limited. First you need to know where your money is going, THEN you can look at the areas you can save in. Lots of people spend $5-$10 a day on odds and ends like vending machines and magazines, amounts that quickly add up to $1000-$2500 a year.

For instance, an example I've used before, you buy 2 sodas a day at $1 each from a vending machine at work. That's $2 a day (2x$1), $10 a week (5x$2), and $500 over a 50 week work year (50x$10---most people get at least 10 holidays and sick days a year). If you buy a couple of two liter bottles at $1.50 of the same soda at the grocery store to drink at work, $3 a week instead of $10, you save $7 a week (for no work), and over that same 50 week year, $350 over that year (50x$7).

Another example, even more dramatic, that I touched on in my very first post was lunch. If your average lunch out at work runs $6 (and that doesn't include the gas and any other expenses), you spend $30 a week on lunch (5x$6), and $1500 over the course of that 50 week year (50x$30). If, instead, you bring some of that cheap bean-and-rice soup at $.50 a lunch (this is the fancy version including meat, etc.) on two days (2x$.50=$1), a nice sandwich and fruit for $1 on another day, leftover that you would have thrown out (free) on a fourth day, and then go out to eat with the gang and have an $8 lunch on the fifth day, you'd spend about $10 a week ($.50+$.50+$1+$0+$8=$10), saving $20. Over a year, that would add up to $1000 (50x$20). Cut that $8 lunch to once a month and have leftovers instead, and you'd save about $300 more ($8x3x12=$288).

Switch brands on just four items on your weekly shopping bill that save you $2 total, only buy meats on sale, saving about $5, buy grains and pasta and flour in bulk or on sale to save another $2 a week, and eliminate even two convenience foods to save another $3 a week gets you a total of $12 a week ($2+$5+$2+$3=$12), or $624 over a 52 week year (52x$12=$624---groceries don't get sick days).

Do all of these things, virtually no extra work, and put the savings away safely, and you'll have $2262 ($350+$1000+$288+$624=$2262). If that's "pin money," then I'm thrilled for you. Your best bet is to put 25% of your takehome into pension and savings before you spend a penny, and you'll be set. But you aren't my main target here. For 90% of the US population, $2200 is huge. Enough to be a down payment on a modest new car, or buy a clunker in cash or pay for a major car repair without using a credit card. Or about 6 classes worth of tuition, fees, and books at our local community college, an investment that could get you a new job skill and a higher salary in the future...

And as to the question of sodas or Saturns, obviously you can save up as much over a year on the little things with virtually no effort, so why not do both? You'd have $3762 plus interest at the end of a year ($1500+$2262=$3762). Keep saving the "small" money and keep driving that car for 5 years, and you'll have $12810 plus interest, enough with  your trade in to possibly buy a replacement car in cash ($2262*5=$11,310; $11,310+$1500=$12810). If you had a four year loan on the car and saved up the payment for that fifth year before trade in, you'd definitely have enough for a modest new car in cash. So, DO sweat the small stuff as well as the big stuff.