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.