My Budget and the Grocery Paradox

 

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I've always been a fan of math, numbers, and organization, but I know that isn't the case for everyone. My super basic budgeting method should be easily adaptable to anyone who may be interested in a similar venture (or is just curious about where exactly their money is going).

I enroll in paperless statements from my bank, but for budget's sake I went online and printed out the last three months. I also referred to credit card statements for the same time frame. I don't typically carry or spend a lot of cash, so those who work for tips or do other cash-based work would have to incorporate an additional method of tracking cash flow. I also have the same monthly income, though I know other jobs tend to fluctuate and would need to be averaged for this approach.

First, I went through and highlighted every mortgage payment. That was easy; it's only once a month and it's the same number each time. Next, I highlighted each energy bill. These were also monthly but slightly differed in amount, so I did some basic addition and division to find the mean (average) cost. I did the same for internet bills, water/sewer utilities, medical expenses, my Netflix subscription, and car insurance.

I found all transactions in that quarterly period used to purchase fuel for my car, added them together, and divided them by three to find the average amount of spending on gas per month. I followed the same method for groceries, household items, dining expenses, drinks, gifts, clothing, entertainment, and miscellaneous shopping.

Finally, I totaled up the average spending in each category (remember, this is just simple math, people!), and didn't like what I saw. The final tally was way too high. I was spending enough to break even, or sometimes more. Where could I cut back? Certain expenses are far more necessary than others. I decided to put the mandatory expenses like in my budget as is. Certain categories, like dining expenses, could be eliminated entirely. I did not include those in my budget. Then there were tricky items, like groceries and gas. Yes, I need them, but at one point am I spending much more than I really need to? For these categories, I did the super scientific thing and guessed.

I can easily spend upwards of $200 per month on groceries. As a single lady. Yep. I love to cook and experiment with a variety of ingredients. I'm certainly not at a loss when I open my freezer and cabinets. Though I could have gone easy on myself and allowed for a reasonable amount towards food, I instead decided to present this as what it should be: a challenge.

I love fresh produce, and usually have to pick up fruits and vegetables and salad greens on a weekly basis. Granted, one could live for a month off of boxed macaroni and cheese and oatmeal and require very little in the grocery budget, but where is the balanced diet in all of that? That lifestyle worked when I was a college student, but I had no energy eating that way (and I also put on twenty pounds). How can I eat as fresh and wholesome as possible without breaking my spending fast?

The key for me will be my freezer. I have plenty of bags of frozen fruits and veggies stuffed in there. It won't be the same as a handful of fresh blueberries in the morning or a bright green salad for lunch, but my $20 allotment should help stretch that. By the end of the month I will likely have an empty freezer but should have been able to stick to a balanced meal plan. There are also added benefits to forcing myself to creatively use every ingredient in my house, such as saving money due to waste reduction, but that's for another post.

Do you keep a budget? How do you track your spending? How effective do you think it is? Any suggestions for keeping a budget?

Up next: The Spending Fast begins.

The Guidelines

 
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The following is a list of what I will and will not be spending money on during the month of March. I could certainly be more frugal, but the goal here is not to be completely extreme; it is to challenge myself to spend less than I normally would.

I will spend money on:

• Mortgage
• Utilities
• Internet
• Cell phone
• Car insurance
• Car fuel (minimally)
• Perishable groceries (minimally)
• Medical bills
• Credit card payments
• Emergency items, as needed
• A haircut (I haven't had one since September!)
• Netflix subscription (far cheaper than most forms of entertainment!)
• Monthly donation to missionary friends abroad (I've been doing this for over a year)

I will NOT spend money on:

• Dining out
• Entertainment
• Drinking alcohol
• Snacks and lattes
• Most groceries (I want to see what I can use up in my house)
• Clothing
• Make-up
• Gifts
• Other non-emergency shopping

I have created a spending budget based on average expenses for utilities, insurance, etc. I am allowing $35 in my budget for fuel (enough for about one full tank at current gas prices!) and $20 for perishable groceries.

Up next: How I formulated my personal budget.

Why A Spending Fast?

 
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Who doesn't like to have money? Most of us want some of it; a few of us want a lot of it. And yet, none of us seem to have enough of it. Whose fault is that? The government? Corporations? Banks? El Niño?

My opinion is: yes and no.

Sure, the economy sucks. And this is the first time ever that this has happened! We've never as a civilization been in a recession, or a depression, or a society that existed before monetary exchanges! Right? Oh, wait... Never mind.

It's always easy to blame someone or something else. Some of the impact can come from decisions made by elected officials, or the price of oil, or neighborhood residence, or whatever. Those of us fortunate enough to have jobs usually receive paychecks with automatic deductions for taxes and insurance and benefits before it even arrives in our hands. But here's the bottom line: regardless of your political affiliation, religious preference, sexual orientation, cultural background, gender, age, or socioeconomic status...

You are ultimately responsible for how you spend your own money.

Whether a person makes $20,000 or $200,000 annually, it is up to the individual to decide to live within their means. This is not always easy. I can't speak for anyone else, so I will offer insight into my personal situation:

Last year, I went through a divorce. The marriage was short-lived, and that was very much for the best. During that time, however, we bought a house. I ended up with the house and am now responsible for paying the full mortgage and utilities. This change alone literally doubled my expenses. On top of that, due to funding restrictions, I had to endure an 11% pay cut at my job. Suddenly, I had less money but had to pay for more things.

In the spring of 2011, my car was totaled on the freeway by a driver texting in his Jeep. I suffered severe whiplash and had to go to physical therapy for several months. I was also stuck driving a rental car until my vehicle was repaired. Insurance covered part of this, but not all of it. Thankfully, the ligaments in my neck are now back to normal. Those are harder to replace than lost income.

As the months wore on, I began to see my checking account dwindle. I was spending more than I was making. Surely, this was due to my added expenses, and not my fault. I decided to do the responsible adult thing and get a second job, a part time retail gig at a bookstore.

One week into 2012, my knee gave out and I fell on it, resulting in a severe sprain. I had to go to the Emergency Room, get an x-ray, a leg brace, and crutches. Later, I began physical therapy but made no progress. MRI results showed that I had cartilage fragments floating around in my knee. Now I'm facing the likelihood of an operation to remove the cartilage and correct the injury. Though I have health insurance and feel very blessed to be able to use it, I have a much higher deductible this year as a result of budget cuts. This means I am responsible for the first $1000 (at least) of medical expenses pertaining to this accident. I also lost my bookstore job because of my inability to stand for long periods of time.

As my financial safety net continued to shrink, I was convinced there was not much more I could do about it. Again, I tried the responsible thing and drew up a budget after using my bank statements to calculate my average spending in various categories. I found that I was still managing to eat at restaurants, go out for the occasional cocktail, grab a chai latte on the go, pick up a quick snack, buy new items of clothing, attend concerts, go to the movies, purchase household decor, and so forth. Not a single one of those things was a necessary purchase.

Yes, I admit it: those expenses are my own damn fault.

While I am very fortunate to be currently debt-free, I'd like to keep it that way. This led me to ask myself: How much money could I save in just one month by spending exactly zero dollars outside of my necessary expenses? How quickly could I pay off my medical bills? How much more of a nest-egg can I build? How much closer could I get to saving up for that new camera I want so badly? Granted, I won't likely reach all of these goals as the result of a mere 31-day financial experiment... but it certainly can't hurt my bank account. Besides, I can commit to one month of change. Thus, the Spending Fast will commence in four days.

Up next: my personal guidelines for the March 2012 Spending Fast.

To Spend or Not To Spend?

 
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Beginning March 1st, I will embark on a month-long spending fast.

So, what the hell is a spending fast? Why am I doing this? How will I enforce it? What are my motives? Are there exceptions to my guidelines? What about bills? How will I eat? Am I going to become a total mooch? Will my social life crash and burn? Will I fail miserably?

Ah, the schadenfreude of spectatorship as I become the guinea pig in my own experiment. Be entertained, be enlightened, be inspired.

"Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don't need." - Chuck Palahnuik