Beating Broke

Personal Finance from the Broke Perspective

The Financial Toll of Special Diets

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wheatSpecial diets (unlike regular old diets like Nutrisystem, Weight Watchers, or even simpler ones like the Slow Carb Diet) are almost always a result of some sort of food intolerance or disease.  Lactose intolerance requires that the afflicted person refrain from milk and dairy product that contain lactose.  Of course, there are milk and dairy replacements.  You can buy soy milk or almond milk, for instance, to replace the commonly used cows milk.  The difference is cost.

Another special diet is the gluten free diet.  Gluten is one of the building block proteins in grass grains like wheat, rye, and barley (and others).  Stop for a second and think about that.  Do a mental assessment of your pantry.  How much of that stuff has one of those grains in it?  Now, add about 20% or so, because much of it that you wouldn’t think has those grains (or their by-products) in it, does.  Soy sauce?  Wheat.  Soup?  Wheat flour for thickening.  Seasoning mixes?  Wheat flour.  There are replacements for almost all of those things.  And, again, the main difference is cost.  (well, some flavor too, but that’s another topic for another day.)

It’s how much?!?

How much of a price difference are we talking?  Around here, a gallon of 1% fat cows milk costs about $3.50.  On Amazon, right now, you can buy an 18 pack of 8.25 ounce Silk Soy Milks for $20.  Let’s compare ounce for ounce.  The cows milk costs about $0.028 per ounce.  ($3.50/128 ounces)  The soy milk?  $0.135 per ounce.  ($20/148.5 ounces)  That’s a difference of over $0.10 an ounce.  There’s 128 ounces in a gallon.  How many gallons of milk do you and your family use in a given week or month?  If you want to talk about gluten replacements, the average price for a loaf of gluten free bread is about $6.  I bought wheat bread at the store the other day for $1.29! Pasta is just as bad.  A package of gluten free spaghetti is usually about $3-5.  The wheat stuff can be found, on sale, for about $0.25-$1.00 for an equivalent size package.

Budget Breaker

It doesn’t take an accountant to add that up and figure out how much of a difference in your finances a special diet can make.  Or, how much of a skewing factor it plays in a budget.  Suddenly, your budget for food has to be quite a bit higher than it used to be.  And, of course, the financial toll is that it sucks up funds that could easily be used for something else should the diet not be necessary.

Planning for the Extra Cost

If you have to eat a special diet, you probably know the added cost that it adds to your budget.  But, what about someone just venturing into a special diet?  How do you budget for the extra cost?  You can either do your research and get a really good idea of what it will cost, or you can just leave yourself a very nice cushion until you know for sure.  Researching is probably the more likely choice, I would think.  Take a look on Amazon and see what some of the replacement items will cost.  Compare to what you normally buy.  That should give you a rough guess as to how much your costs will increase for certain items.  Using your normal expenditure as a starting point, you can then make an educated guess as to how much you should budget for in the coming months as you begin your special diet.

Eat Fresh

Another way to offset some of the cost is to eat more fresh food.  Adding more fruit and vegetables into your diet won’t increase your cost any more than the new special diet food and will likely make you healthier for it.

Photo Credit: wheat by sky_mitch

Mortgage Refinance Underway

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A few weeks ago, I asked all of your advice on whether we should refinance our mortgage.  At the time, we had just begun thinking about it and were still working out the numbers.  As you can probably guess from the title of this article, we went ahead and did it.

So, here’s why.  Part of our hesitation was that we plan on being out of our house in less than two years and it would take about two and a half to earn the closing costs back with the saved interest.  I think Financial Samurai hit the nail on the head in the comments of that original post when he asked what % we were sure that we would be moving in the next two years.  And the truth of the matter is that we hadn’t planned on living in the house longer than 4 or 5 years and here we are going on 6 years.  So, yes we plan on moving, but there is a chance that we will end up not moving.  More importantly, I think we can earn back those closing costs a lot quicker by using the saved interest money to pay down other, higher interest, debt.  If we’re paying off debt at 14%, we’re saving quite a bit each month and that will add up fast.

We did a little bit better on the interest than I had thought.  Originally, I had estimated that we’d get about 4.375%, but we actually got in at 4.25%.  Every little bit helps.  Of course, the downside is that will end up paying a bit more than I had anticipated in closing costs.  Which isn’t great, but overall, the math is still very favorable to us.  We also reduced our monthly mortgage payment by about $130 or so.  That’s a pretty good chunk of change that can go towards our other, higher interest, debt.  We’ve got a few more pieces of paperwork to turn in and an official assessment to get before we can truly seal the deal, but all of that shouldn’t have any effect on the turnout.  I’m hoping that we can have it all finished up and we can be paying the lower mortgage payment sometime around October or November.

What about you guys?  Any of you taking advantage of the low rates to refinance your mortgages?

Balanced Billing: Budget Helper

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In our house, we have a gas fueled furnace for heat and an electric fueled central air unit.  So, as you can likely deduce, our gas bill is much higher in the winter months and our electric bill is much higher in the summer months.  But, our bill hardly ever fluctuates.  Why is that?  We’ve got both bills set up on a little budget helper called balanced billing. It’s a lifesaver when it comes to doing a budget, and it offsets those peak months like the Money Beagle just had.

How does it Work?  It’s pretty simple really.  The gas/electric company takes our bills for the last year and adds them all up and then divides by 12.  That’s our bill for the month.  With the gas company, it adjusts each month, so we’ll see a variation of up to $10 or so dollars each month.  And with the electric company, they adjust once a year so we usually end up with a little bit higher bill (about $20) for one month to make up for any difference and then it’s back to where it was.  I highly recommend it.

How is Balanced Billing a budget helper?

Here’s a little anecdotal story to cement the need for such a program.  When I was still in college, I lived with 4 other guys in this awesome old house.  It didn’t have air, so it was warm in the summer.  In the winter, it had a gas fueled boiler that fed those old registers in each room.  The first winter we lived there, our typical gas bill up to that point had been about $200.  Not bad when you split it 5 ways.  Then we had a particularly cold November.  Our bill in December was over $650!  Obviously, it was a bit of a shock to us when our heating bill was more than the rent each month!  Luckily, we were all pretty good friends and a couple of the guys floated the rest of us some money to help pay for the bill.  But, imagine what would have happened if that had happened to a family that was living paycheck to paycheck?  Even if you aren’t living paycheck to paycheck, imagine what that would do to your budget!

And that, my dear readers, is why balanced billing can be such a wonderful budget helper.  If you’re interested, it usually just takes a quick phone call to the utility company to get it set up.