Sunday, April 25, 2010

Making a Food Budget 101...A Month of Homework in May will Reap Rewards in June

I am posting this a few days before the new month begins so everyone can give this Budgeting Idea a try.  You will need to start doing this really EASY Homework from the 1st of May until the 31st. At that point, you need to bookmark this post and come back to finish this assignment.
-sluggy
One area where every household in the World spends a big chunk of money on is FOOD.  If you aren't controlling this piece of your money, then this money is controlling you!  Get a handle on your food spending today by making a Household Food Budget.

 The best 1st step to go about making a food budget is to simply do this......

Save all your receipts you get from buying food for 1 month in an envelope.  I don't care if you use coupons or only buy on sale, Everyone should try this for at least 1 month.  I am sure it would open many people's eyes up to how they actually spend their food money!

If you buy some food and don't get a receipt, write down the amount you spent & what it was for on a sheet of paper and put that with your receipts.
Personally, I have a loose leaf notebook...
Whenever I buy food/toiletries I throw the receipt into this notebook.  At the end of the month I write down all my receipts(date/store name/amount spent/amount saved)and add up what I have spent and saved.
This way I can instantly see if I stayed within my budget, where the money went and how much I saved using sales and coupons.  It helps me plan next month's shopping better.

Bookmark this Post and when the month of saving your receipts is over, come back here, take all those receipts out and add them up.  This is the basis for your 1st working Food Budget.  Whatever you spent last month on food, use this as the baseline for this month's food budget.

Now, go on over HERE and see where your food spending lines up compared to the Federal governments guidelines for what you 'should' be spending.  The USDA keeps a current list of 4 food spending plans--from thrifty, to low to moderate to liberal.  
So where did your monthly spending put you?

What are your thoughts when you see your monthly food totals?
Are you happy?
Does it make you nervous to see how much cash left your wallet last month?

Compared to your total monthly income, what percentage of your spending was on food?
The USDA says the average family spends just under 10% of it's income on food.

Now looking at your food spending for the month....are you comfortable with that figure?
Did you spent more or less than 10% of your income last month on food?
Are you comfortable with how much you spent?
Or do you want to spend less?
If you are like most people these days, you want to or even NEED to spend less!

If you want or need to spend less on food you will need to make different/better choices on what you bought last month.
In order to figure out where/how you can cut the spending, get those last month's food receipts out and a new sheet of paper.
Make 3 columns labeled....BASIC, CONVENIENCE & EXPRESS.
Take each item you purchased on each receipt one at a time, and write it down in one of those columns.

A BASIC Food is something like milk, eggs, butter, salt, dried beans, rice, pasta, meat, fresh fruits or produce, oatmeal, frozen fruits or produce, cheese, canned tomatoes, flour, coffee, tea, bacon, sugar, spices, oils, bread, etc.  A food that is used to make something you eat or a basic form of a food.

A CONVENIENCE Food would be something that comes in a box or a mix or a frozen meal or food that's either already prepared that you just heat up or partially prepared.  Examples are Hamburger Helper, Kraft Mac & Cheese, sugared cold cereals, Beefaroni, Biscuit dough in a tube, pancake mix, cake or brownie or muffin mix, instant oatmeal, frozen tv dinners,  canned or boxed soups or soup mixes, frozen meatballs or burritos, breaded chicken strips, battered anything, pre-made hamburger patties, hot dogs, canned beans, fresh pasta, spaghetti sauce, yogurt, veggies in cheese sauce, pastries or pies, chips, cookies, soda, etc.

An EXPRESS Food is anything that's ready to eat like take-out Chinese, Sushi, McMuffin's, Burgers and Fries, Pizza, Roasted Chickens or the Salad Bar at the Deli Counter, Prepared Cups of Coffee, Donuts, etc.

Now add up the numbers in each of these columns.
Where are you spending most of your food budget?

I bet you are shocked at either how much or where you are spending your money, huh?

Where you want the bulk of your food budget to be is in Column 1, BASIC.
This is the healthiest overall category to spend on.  This category will give you more 'bang for your budget spending buck'.

Some of your spending can be in the CONVENIENCE Category.  Some people lack the cooking skills or don't have the facilities or time to make some things so if you have a decent food budget amount you can spend a bit more overall by buying the premade biscuits in the can rather than making them from scratch or canned beans instead of dried beans if you don't have time to soak and boil them.  Just remember that most convenience foods will cost you more of your budget than the basic form or the basic ingredients that make that food and most convenience foods will have added ingredients that you might not want in your food.

Look at the EXPRESS Category and tell me how many meals out of the 90 to 93 breakfasts/lunches/dinners you ate each month did this category's spending supply?
And then figure how high a percentage of the overall food spending was used on items in this Column.
Can you see how this Category of food spending can supply you with so little in terms of number of meals compared to how much of your budget it gobbles up?

What you want to shoot for...
The bulk of your food spending should be on BASIC type foods with some CONVENIENCE type foods mixed in.
Think of the EXPRESS type foods as the 'condiment' of your food budget....if you have some wiggle room in the budget then include some special 'treats' now and again like homemade calzones from the local mom & pop Italian joint or fish tacos from the local mexican restaurant.
But spend your food dollars sparingly in this Column.
If you do, you'll find that you will overall eat healthier(as you have more control over what goes into your food) and your food dollars will stretch further.

Once you have an amount set for your 1st Food Budget it's time to go spend that money.

But before you set foot in the grocery store, you have some homework to do.

Get a copy of the current sales flyer from wherever you plan to shop, or get flyers from  two or more different stores if you wish to comparison shop.
Get a copy of a coupon insert &/or find an online coupon site where you can print coupons.

Now grab a sheet of paper and write down the foods that are on sale that your family will eat.  Remember to try to choose Basic foods first over Convenience ones.

After you have a list of sale priced items, now you need to come up with meals using those items that you can prepare.  Check your food pantry at home for any ingredients you already have too and then add onto your shopping list any items not necessarily on sale that you also need to fix these meals.

Now check if there are any coupons available for any of the items on sale or not, that you wish to buy and take those coupons with you to the store with your shopping list.
Do a quick preliminary calculation on approximately how much your list of groceries will cost you so you can make sure you take enough cash to the store.  Nothing will ruin a trip to the grocery store if you are short on money at the register after all your hard work shopping.

Now shop for your items and KEEP TO YOUR LIST!
Yes, I know those cookies in the bakery look yummy....but they aren't on your list.  I do give you permission IF you have some spare money in the food budget, to pick up unadvertised specials or deals like discounted produce, canned goods or meats that you know you will use.  Remember, it's NOT a deal if you end up throwing it away!

Bring your groceries home, put them away and save that receipt in an envelope so that next month you can add up your food spending for this month and see how you did.  If you go over your budget this month, you either need to adjust how much you budget for food or reduce your costs in some area(s) by choosing less expensive alternatives or more basic foods.

So get an envelope now and get into a habit of saving your grocery receipts.  This is the 1st step to getting a handle on your Food spending!

Sluggy

6 comments:

  1. I am so doing this. I am ashamed of how much we spend on groceries. I am learning so much from your blog--thanks for all the help.

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  2. This is a fabulous post especially for people just starting on a frugal food plan. I will be following this wonderful series.

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  3. Well, according to the chart you posted the link to, we are in the Thrifty Plan. But I think I will do this anyway. It never hurts to know exactly what we are spending.

    Excellent post!

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  4. This is a great post!
    I added up and on the thrifty plan we should get $147 a week. So according to the US government we are doing great at $120 a week. But I'm not going to put much stock in their numbers!LOL

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  5. Fabulous post Sluggy! I love that you have given clear-cut instructions, step 1, step 2, etc. Some of us (me) need that much guidance.

    I think I may get busy with my notebook and an envelope!

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  6. that gov't chart is really fascinating. Technically, I'm doing fine in the Thrifty column, although they apparently aren't factoring in two cats - LOL! Thanks for such great information on budgeting!!!

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