Coffee heat rising

Budgeting

What’s “groceries,” anyway?

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How do you account for your spending at emporiums that sell household and personal care items as well as food? In the past, I’ve let Quicken record any charge that occurred at, say, a Safeway or an Albertson’s as “groceries.” But the truth is, a substantial part of what you buy there isn’t groceries at all—it’s household gear, personal care products, or even yard-care items.

When I bought a freezer and started the great Food Hoarding Project a few weeks ago, I decided to break these things out, so that I could see what portion of my spending is really going to food and what to household and other items. It occurred to me that this might explain how some punkin’s can report spending $200 a month (or even more spectacularly parsimonious figures) on groceries for a family of four: maybe what they’re classifying as “groceries” is food and food alone.

Yesterday I made another run on Sprouts, Costco, Target, and Safeway, pretty well making my goal of storing about three months’ worth of food and household supplies. Except for a few perishable items, I now have enough meat, vegetables, cheese, beans, rice, sugar, flour, cornmeal, pasta (& cetera) to last for a good three months, stored up against the specter of catastrophic inflation or, more realistically, of a layoff. From here on in, it shouldn’t take much to keep this store up to date, and I believe I can do that in no more than one or two trips to the markets each month.

The total amount I’ve spent on groceries (bear in mind that I was almost out of everything when I started) is $519.36. That prorates out to $173.12 a month: an all-time record low for me. Especially when you realize I don’t break out pet food, what with Cassie the Corgi dining on human food.

But maybe not so record-breaking, because cleaning products, shampoo, contact lens stuff, Bandaids, and the like previously counted as “groceries.”

Since the start of the Hoarding Project, total spending on household and personal care goods has been $151.80, which would work out to $50.60 for each of the next three months. That’s not bad either, in my universe: a total of $223.72 ($173.12 + $50.60) is still significantly less than I ordinarily have spent per month in that lumped-together “groceries” category.

But…we have to bear in mind that while I was almost out of food when I started this scheme, I had plenty of household goods: lifetime supplies of Simple Green, paper towels, toilet paper, and the like. This month’s “household” category was inflated because my ancient Brita water filter gadget broke, because I dropped my indispensable little kitchen timer on the floor and broke that, and because I decided to buy a lifetime supply of Costco’s tinfoil at a very good per-unit price but a breathtaking out-of-pocket price. If I hadn’t purchased those items, the total for “household goods” would be much lower. But in either event, the total we have is unrealistic, because I avoided buying stuff I would normally need to stock up on and because I bought items that I would normally purchase once every few years, not once every few weeks or months.

IMHO, it’s a little more enlightening to be able to see how much is actually spent on food, as opposed to everything that’s spent at a particular type of merchant. I’m not sure it’s worth the trouble, though.

So, out of curiosity: how does your accounting system register “groceries”? Do you break out supermarket and big-box purchases into categories such as “food,” “household items,” “personal care items,” and the like? Or do you lump everything that appears on a supermarket receipt into one category?

The Grocery Pool: So far, so good

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Mwa ha hah! It’s working! It lives! The scheme to stockpile groceries and shop as though I dwelt in a remote small town where a trip to the corner store would entail a 120-mile round trip is going well. As we enter the third week of maneuvers, I’m $91.98 in the black—and that includes purchases of everything, not just groceries. Last weekend I avoided going to the grocery store altogether (!!!!!). Yesterday I bought a couple pounds of tomatoes at a farmer’s market.

febmarbudget

Having cleaned the house, edited copy, and passed the time of day with one of my best friends, today all I really must do is continue working on the Festival of Frugality (don’t forget to send in your submissions, please!). So in theory I could make a grocery run. But…do I have to?

My cumulative shopping list says “no.” The only things I need urgently are smoke alarms and mascara; to get the smoke alarms installed, I’m gunna need to get a handyman in here, and that will entail finding someone and then persuading him to show up. Neither of those are grocery items, anyway. And though it would be good to get those smoke alarms in sooner rather than later, neither item needs to be bought right now.

If I were living in Yarnell, the desert rat’s answer to Shangri-La, would I drive 120 miles to buy these things? Probably not.

Budgeting for “extraordinary” costs

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So pleased am I with the scheme to hoard “pool” groceries (can you believe it? No trip to any food purveyor needed this weekend!) that I’m beginning to contemplate the possibility of engineering other kinds of “pooling” budget strategies.

Is there, for example, a way to “budget” or “pool” repair and maintenance bills that fall outside the bounds of ordinary monthly bills? You know, those annoying costs that don’t quite break the bank but may keep you from hitting a savings or loan paydown goal in any given month.

It strikes me that some of these sorts of expenses can be put off and some can’t. Obviously, if your car breaks down or your tooth starts to hurt, you’ve gotta get it fixed. But other things…maybe no.

For example: I know that the pool filter needs to be cleaned out, the air conditioner will soon need its summer-season service, the chimney should be professionally cleaned, and I need to get the Dog Chariot’s oil changed.

However:

• The pool will run for a long time without a cleanout. It’s the first of March. That could be put off until the first of May.
• The air conditioning service could be done this month or next; putting it off until April wouldn’t do much harm.
• The car would be much happier if its oil were changed one of these days.
• The chimney? Are you kidding? We won’t see chestnut-roasting weather for another nine or ten months! On the other hand, the local chimney sweeps will be feeling mighty hungry along about July or August and probably will offer some midsummer deals.

Suppose you listed the pricey projects that need to be done, from the most to the least urgent. You might work things so that you could schedule and budget for them on the order of one a month. You also could plan to do them near the end of a billing or income cycle. If an emergency expense comes up before then, you use the budgeted money to cover (or help cover) that and put that month’s near-routine maintenance bill off for a while. For example, I could run the air-conditioner into May before having it serviced, without doing much harm. If I had the AC service scheduled for March 30 and my car crapped out on March 15, I could simply put off the air-conditioner company for another month.

Some months, you’re lucky enough to have no major maintenance or repair bills. During those miraculous periods, you could put aside whatever you’ve budgeted for mind-bending little exigencies, building…oh, yes!…a “pool” of funds to cover out-of-the-ordinary expenses! If several months went by without any surprise bills (as happened to me this winter), you could end up with plenty of cash to cover a run of emergency bills…and as we know, it never rains but it pours.

The strategy would look something like this:

1. List the upcoming maintenance and repair bills you can reasonably foresee.
2. Order them from most to least urgent.
3. Schedule them, over the next few weeks or months, near the end of your budget or pay cycle.
4. If an emergency surprise comes up during a given budget or pay cycle, put off the scheduled project until the next cycle.
5. If no untoward expenses arise, get the things done on time. If something more urgent comes up that makes the scheduled project unaffordable, put off the latter for a month or more.
6. And if nothing needs to be done, take the average amount you figure these things cost (in my part of the country, around $80 to per episode) and put it in savings, building yourself a pool for not-quite-ordinary expenses. Over time, this will provide you a fund so that you don’t have to pay for these things out of cash flow—and maybe you won’t have to put off semi-optional projects in favor of surprises…maybe you can afford them both.

Okay! First project that needs to be done: oil change, tire rotation, and general car check! Let’s put up Chuck’s Auto Service to doing that on March 30, and see if we make it till then without any other expenses.

AMEX kickback comes through, and surprises

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Nice timing for the annual AMEX credit-card kickback. This year it’s $210, which will almost make up for this month’s furlough gouges. One of our clients owes us $1,100, which hasn’t been forthcoming, but if and when that ever shows up, my half of the net plus the American Express rebate should carry me through the first three periods of reduced pay.

So far, I haven’t gotten any static from American Express, despite reports of questionable practices from those quarters. I did use the card at a Walmart before I’d heard of AMEX’s data mining schemes, but so far they have not cut my credit line. Possibly that’s because it’s a Costco card. It’s unlikely that AMEX would risk alienating a major client by slashing its customers’ credit.

Hm. I’ve spent an incredible amount of money with this thing over the past year: $18,717. Of that, $1,187 went to gasoline, $448 to eating out (really??), and $14.75 to “traveling” (huh? I haven’t “traveled” in years). “Everywhere Else” racked up a total of $15,742.

Oh, this gets better: a Quicken category report suggests I spent $578 eating out! The $14.75 was for lunch in Prescott, when I drove an out-of-state friend up there, not exactly “traveling,” IMHO. Lordie! Who would think I’ve spent that much in restaurants? I try to stay out of them, and generally restrict eating out to twice a month, max—and for lunch, never for dinner.

Eating lunch out is pretty much out of the question during the week, because the on-campus chow lines sell nothing but junk food, which I don’t eat. There are only a couple of decent places to eat within walking distance of the campus, and one of them is very expensive. So, I usually go hungry over the lunch hour, since we have no refrigerator and no place except the public toilet to rinse out dirty dishes.

Surprising. I’ll have to get a grip on that!

The grocery pool

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The pooling scheme I came up with for budgeting has worked exceptionally well. In short, all inflowing cash goes into a single checking account at the credit union. From there, the amount needed to cover recurring monthly expenditures, such as utility and insurance bills, goes into an account from which EFTs are drawn, automatically paying my various creditors. Another amount, currently budgeted at $1,200, goes to a money market checking account, where it is held to pay the monthly American Express bill; I charge all expenditures other than regular bills on this card and pay it off at the end of each billing cycle. Three hundred dollars goes from the “pool” into an escrow account each month, to pay annual property tax, car insurance, and homeowner’s insurance. And finally, $400 a month (soon to drop to around $100, thanks to the furloughs) is transferred to savings.

The upshot of this is that there is always enough to pay the bills. And then some: because the de facto pay cut created by the switch to bimonthly pay forced me to live on $220 a month less than I used to have, the two so-called “extra” checks this system presses on us go unspent. Over the course of a year, the equivalent of two net paychecks has ended up in savings.

Here’s where I’m going with this: Why couldn’t you do something similar with grocery and household supplies?

Suppose you took a chunk of savings, as I did when I originally bankrolled the “pool” account, and used it to buy a full month’s worth of groceries and cleaning supplies. Wouldn’t that have the same effect as “pooling” your income? Over time, it would create a fair amount of savings. Here’s how:
1. Given that the original month’s grocery stash would include a lot of staples (things like flour, salt, sugar), you probably wouldn’t use it all during a month. So, if you repeated your first stash run at the beginning of the second month, by the start of the third month you would always be way ahead of yourself. In other words, after the first two months, instead of buying a whole month’s worth of goods at a time, all you’d be doing is restocking, and you would never drop below a month of supplies in your stash. Over time, you likely would find yourself having to restock less and less.
2. Because you rarely would be in any hurry to restock—this assumes you keep an eye on what you have and become aware that you will need x or y before you run out—you could wait to make purchases until you found the items on sale or until you had time to drive across the city to retailers with better prices than those available at closer-in stores.
3. Three weeks of every four, you would stay out of grocery stores! We’ve already seen that simply not going into stores saves a surprising amount of cash.
4. It would force you to plan and to write lists; once you arrived at a store, you would be very focused on acquiring only the things you needed, and so you would be less tempted to make impulse buys. As commenter Anne reported, research by the supermarket industry has shown that a list is one of your most powerful money-saving tools at the grocery store.
5. Think of the amount of time it would save! I dunno about you, but I spend half of Saturday or Sunday driving around to grocery stores, searching for products, and standing in line at check-out counters. That doesn’t count the time spent stopping by a store on the way home to pick up things I’ve run low on or forgotten during the weekend expeditions. Shopping is far from my favorite pastime. Imagine having your entire weekend free to do what you want to do!

I’m going to try it.

Here’s my plan:

First, use some of the savings I’ve stashed over the past few months to buy a freezer ($200 at Costco).

Next, clean off some shelves in the storage room and in the garage to make space for dry goods, cleaning supplies, and personal items (such as shampoo, contact lens solutions, soap).

Third, compile a well thought out list of all the stuff I need over the course of a month.

Fourth, buy some airtight containers for grain products, such as flour, cornmeal, and oatmeal (or make room in the freezer for them).

Fifth, buy some wire baskets to organize goods in the freezer.

Sixth, reallocate the AMEX budget, which currently is divided into four equal “chunks” allowing about $300 a week for food, gasoline, household and yard goods, pool supplies, pet costs, and incidental expenses. Front-load the budget to allow about $500 in the first week (this will cover gasoline and a few other items in addition to a month’s worth of groceries), and cut the amount available in the other three weeks.

Seventh, download or clip coupons to assist in getting better buys.

Eighth, on February 21, which is the first day of the billing cycle (the food & incidental budget runs on the AMEX billing cycle, not from the first to the last of each month), spend the entire darned day running around buying enough to stock the first one-month stash. Package and store things so they will keep and can be accessed from the oldest stuff to the newest.

Ninth, keep a running list of items that need to be replenished. Try to refrain from buying these things until the next shopping expedition.

Tenth, on March 21, make a second run on the stores. In addition to replenishing things that have run low, purchase a second full month’s worth of stash goods. This will enlarge the stash so that at any given time it should contain well over a month of food and household goods.

Freaking brilliant, isn’t it? Sometimes I amaze me.

It has several golden advantages.

1. Over the long run, it should save a lot of money on groceries.

2. It forms a kind of “emergency fund,” in kind instead of in cash. Should I lose my job (a prospect that looks less unlikely as the days pass), I’ll have enough food in the house to last for several weeks. During that time, I should be able to earn enough to get a grip on making ends meet. Not having to buy groceries for a month will make that challenge a lot easier.

3. It saves a phenomenal amount of time and, three weeks out of each month, relieves me of a tedious chore.

4.Over time, the stash may accrue, just as money in the “pool” checking account accrues. In a year or so (assuming I keep my job and so can continue the monthly purchasing), this strategy could result in my having a lot of food, household supplies, and personal goods stored in the house. Effectively, it will grubstake retirement. When I do retire and see my income drop drastically, I will not have to worry about where my next meal will come from.

Teapot’s tempest loses steam

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Hmmm… This furlough thing may not be the disaster initially envisioned. Instead of requiring people to take a day a week, as was our first impression, HR (always a fount of accuracy…) is saying they expect employees to take one unpaid day per paycheck.

  • For faculty working and paid on a 12-month appointment,this furlough program will beginJan. 30, 2009(pay period 1.26.09