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California Drought; Food Prices On the Rise

February 24, 2014 By Shane Ede 12 Comments

I’m not sure if you caught this or not.  I suppose if you live in California you might have heard quite a bit about it.  If you live far from California, like I do, you maybe haven’t heard much about it at all.  But, apparently, California is in the midst of one of the worst droughts on record.  The California drought is so bad that the governor of California has declared a drought emergency.  During what is traditionally California’s wet season…  Take a look at the U.S. Drought Monitor.

If you live in another state, you might ask yourself why the dryness of California should concern you.  Well, take a look at these numbers compiled from the 2007 Census of Agriculture.  California is the primary provider of a lot of the produce (fresh, frozen, and canned) that you buy.  They produce 99% of the Artichokes,  90% of the Avocados,  83% of Grapes,  79% of Lemons,  76% of Tomatoes, 73% of Lettuce, 65% of Nuts, 59% of Strawberries, and 59% of Spinach.  And that’s just a sampling from that list.  They also grow 100% of the Pomegranates.  With no water to irrigate all those crops, some farmers are resorting to bulldozing (literally) their crops and leaving fields fallow.

California DroughtWhat will happen if 10-50% of the production in California is lost?  All those produce items that they contribute so much to are going to get really expensive.  This article on CNBC is reporting that prices are expected to rise by 1.25-1.75% across the board.  And it’s not even clear if that increase takes into account the drought in California.  Even at an average of 1.5% increase, that’s a pretty significant hit to the wallet.  Imagine if it gets closer to 5%!  What if it gets worse?

The truth is, it’s not just the food cost that might be on the rise.  Power could be affected too.  Low water levels due to the drought could me a pretty significant drop in power generation at hydro-electric dams.  And those power generation shortages could mean power shortages, brownouts, and will most certainly mean an increase in the cost of electricity to users.

While the cost of power might stay somewhat localized, the cost of food is going to be universal across the country.  As the cost of produce increases, more and more people will buy less of it, and switch to eating more affordable food sources.  Except, there might not be any more affordable sources.  If cattle producers can’t water their pastures, there’s less grass for the cows to eat.  And if there’s less grass to eat, they might have to start supplementing with grains.  Which will increase the demand on grains, and raise the price of grain as well.  The price of meat and dairy is likely to rise significantly too.

We’ll see, of course, just how bad it gets as the summer season progresses.  Many of us will be desperately finding ways to stretch what produce we can buy, and create extra room in our budget for extra food costs.  It’s not going to collapse the economy, I don’t think.  At least not yet.  But it is very likely that it’s going to create a very tight summer in many budgets.

Shane Ede

I started this blog to share what I know and what I was learning about personal finance. Along the way I’ve met and found many blogging friends. Please feel free to connect with me on the Beating Broke accounts: Twitter and Facebook.

You can also connect with me personally at Novelnaut, Thatedeguy, Shane Ede, and my personal Twitter.

www.beatingbroke.com

Filed Under: Frugality, General Finance, ShareMe Tagged With: california drought, food prices

5 Quick Ways to Start Prepping. You’re Already Doing at Least Two of These.

February 14, 2014 By Shane Ede 11 Comments

In my recent post about the state of the American economy, I told you that you didn’t need to immediately go out and become a prepper.  And you don’t.  But, much like anything else, it helps to be prepared.  You don’t have to have a bunker under your backyard, a whole armory in the bedroom closet, or enough food to feed your whole neighborhood for years.  You can, however, start making sure that you and your family have a good start in preparing for any disaster.  Here’s 5 quick ways to start prepping.  And you’re already doing at least two of these!

Stockpiling

You don’t have to have enough stockpiled to keep your family fed for months or years.  But, if there’s anything that this winter has taught much of the U.S., it’s that it’s very possible that you could find yourself stuck in one place for several days.

What should you stockpile?  Well, food is a good start.  Canned and dry goods mostly.  Beans, rice, canned vegetables (straight from the garden if you DIY), flours, grains, vacuum packed foods, and canned meats all are good staples that can go straight into your pantry and provide backup food sources should you be unable to reach a grocery store.  (also, if grocery stores cease to exist… but let’s not go all extreme just yet.)

Stockpile other goods too.  Toilet paper, pet food, matches, fire starters, medical supplies, and even ammunition if you have that armory in your closet.  Any essential that you use regularly that won’t spoil is fair game for stockpiling in case of emergency.

5 Quick ways to start prepping

Reducing Debt

If the economy crashes, do you know what the worst thing to still have is going to be?  Well, if you haven’t guessed it, that thing is debt.  If you think your hands are tied by debt now, just wait until the economy is in the dumps, you lose your job, and inflation kills your buying power.  Debt is your enemy, no matter the state of the economy.  Start with a detailed spending log where you list what you spend every day.  Knowing what you spend, and when you usually spend it, create a simple budget.  Stick to the budget, and pay down debt by whatever means necessary.  Get rid of it.  Even if the economy booms, you’ll still be better off.

Become More Sustainable

Sustainability isn’t just for hippies.  Being eco-friendly maybe attributed to the earth loving, free love, woodstock-ing people of previous generations, but today, it’s an excellent way to be healthier, and save money on costs.  There are lots of things you can do to become more sustainable.

The easiest way to start making a difference in your bottom line is to replace high energy consuming items with low energy consuming items.  LED or Incandescent light bulbs are a relatively cheap start, and last for years.  High efficiency appliances like on-demand hot water heaters are more expensive, but can save a lot on energy over the long run.  Try air drying your clothes too.  It takes a little longer, but make it a habit, and your energy savings will grow a lot.

Growing your own vegetables, installing rain barrels, and composting are also great ways to decrease your footprint, while saving yourself money.  You can replace that produce at the grocery store with home-grown veggies, use the water in your rain-barrel instead of the electrically pumped water from a well, or the municipal water, and you can save on what you put into the dump while providing nutrient rich compost for your garden.

Learn New DIY Skills

If the economy completely fails, there’s a good chance that your access to many of the services and products that you have access to now will be severely limited, or severely cost prohibitive.  Not only will learning new DIY skills (like growing vegetables, canning food, repairing items, building items (like a deck), and the list goes on) save you money by allowing you to not pay for someone else to do it, but you’ll also gain a barter-able service that you can trade for services you can’t do.

There are plenty of ways to learn new skills too.  You can just try it and see what happens, although, in my experience, doing so increases the chances that the project you’re working on will take longer or fail entirely.  If you look, you can probably find a local class that can teach you some of the skills.  Videos on YouTube and instructions on the internet (easily found through a search) are also great ways to learn something new.

Make Your Plans

We all know that we should have a plan so that everyone knows what to do should they wake up in the middle of the night to a house that’s on fire.  We give our children a plan should they get separated from us in a crowded place.  We create budgets to plan how we will spend our money, and pay down our debt.  Having a plan for an economic collapse and the conditions that could arise should it crash doesn’t cost us anything.  A little time, and some thought.  That’s it.  Do you have family that you’d “bug out” to?  Are there people in town that you’d want to help?  Are there people in town that would help you?  How will you get wherever you’re going?  Even if that’s just home?

Having a plan, and executing it if you have to is very likely to be the difference between uninterrupted life, and something far more unpleasant.

How many of these things are you already doing?  Which are you going to try out?

Original image credit:Robert Benner Sr., on Flickr.

Shane Ede

I started this blog to share what I know and what I was learning about personal finance. Along the way I’ve met and found many blogging friends. Please feel free to connect with me on the Beating Broke accounts: Twitter and Facebook.

You can also connect with me personally at Novelnaut, Thatedeguy, Shane Ede, and my personal Twitter.

www.beatingbroke.com

Filed Under: economy, General Finance, Green, ShareMe Tagged With: budget, canning, prepping, sustainable

How Your Confidence Affects Your Finances, Part Two

January 27, 2014 By MelissaB 14 Comments

For part one of this series, go here.

In our earlier post, we talked about how debt can seem insurmountable to some, as documented in the movie, Maxed Out. Unfortunately, some people feel their debt is so overwhelming that they take their own lives. That includes a college student who owed $12,000. While $12,000 is not a small sum, it’s not worth taking your life.

Debt and Your Self Worth

Our culture recognizes that many people identify their worth by their jobs. When we meet someone new and tell them what we do for a living, we say, “I am a teacher” or “I am an engineer.” We literally take on the identity of the job that we do.

What is not discussed is that we often measure our worth by our debt, also. If you’re in debt and struggling to make your monthly payments, it’s easy to feel worthless and hopeless. When my husband and I finally faced our nearly $57,000 in credit card and student loan debt, I felt embarrassed and stupid. After all, how did I let myself get in this position?

Your Thoughts Can Determine How Quickly You Can Get Out of Debt

Keep Calm Payoff Debt 2You may begin your debt pay off journey as I did–chiding myself and feeling like it was hopeless. How would I pay off this debt that was greater than our annual income? The whole process felt hopeless, and I wanted to give up before I even started.

But through our two year long journey thus far, I learned some things that make paying off debt easier.

  1. Be confident. When I stopped chiding myself and instead decided to encourage myself, the weight caused by debt was lifted. Instead of thinking, “I’m so stupid for being in this much debt,” I thought, “We’ve made mistakes financially, but now we’re on the right path. We’re making strides in our debt repayment plan, and eventually we’ll be out of debt.” This encouraging self-talk increased my confidence and reduced my anxiety. I felt empowered.
  2. Look at the little picture. Sometimes looking at the big picture–the total debt that you owe–can be overwhelming. Instead, focus on the smallest debt. If you put your extra money on the smallest debt, you’ll see progress more quickly. If you owe $60,000 but your smallest debt is $5,000, focus only on that one. Don’t look at your total debt load. You’ll feel elated as you watch your progress paying down the smallest debt.
  3. Celebrate small victories. Encourage yourself every step of the way. Praise yourself when you’re able to pay more off in a month than you typically can pay. Celebrate when you pay off one debt. Shout in your house that the debt is gone. Share it with your friends if they know of your debt struggle.

If you’re in debt, you can either hurt yourself mentally and physically by berating yourself and wallowing in self-pity. Or, you can heal yourself mentally and physically by praising and encouraging yourself through the long journey of paying down debt. Which would you rather do?

How do you encourage yourself when paying down debt?

MelissaB
MelissaB

Melissa is a writer and virtual assistant. She earned her Master’s from Southern Illinois University, and her Bachelor’s in English from the University of Michigan. When she’s not working, you can find her homeschooling her kids, reading a good book, or cooking. She resides in New York, where she loves the natural beauty of the area.

www.momsplans.com/

Filed Under: Debt Reduction, General Finance, Personal Finance Education, Saving, ShareMe Tagged With: confidence, Finance, Personal Finance

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