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Living on a Tight Budget: Should Groceries Be the First Place You Cut?

January 8, 2019 By MelissaB Leave a Comment

If you’re like me, the last few years, you may have felt that you’re simply treading water when it comes to income and expenses.  It seems every time our income goes up, our expenses go up, and I’m not talking about lifestyle inflation but rather insurance premiums and deductibles, etc.

Like many people, I try to cut corners to make our money stretch as far as I can.  I’ve certainly had times a few years ago when I bought the cheapest groceries that I could find by using coupons and sales, even though the food was processed and not that good for my body.

I rationalized that I was being frugal, and, I’ll admit it, I was proud of myself.  Never mind that we were eating casseroles that we didn’t really like made with processed foods or that the leftovers often went to waste because we didn’t want to eat the meal again.  Never mind that both my husband and I had cholesterol well over 200 even though we were in our thirties.

Change in Eating Habits

However, over the last few years, my opinions on grocery shopping, the foods we eat, and how to save money have changed. I still like to save money (and I still need to in order to make our budget stretch), but now I do it differently, and I feed my family differently.  A few years ago, I went Paleo.  I dropped a lot of weight, and my cholesterol level settled around 155, even though I was a few years older. True, our grocery budget went up, but not by as much as I expected.  I learned ways to buy healthy food at a reasonable price.

Where Else Can You Cut Besides Groceries?

Should you Cut groceries first?
Where would you cut first?

Sometimes, especially when money is tight, groceries seem like an easy place to cut.  Convenience foods bought with coupons can be had for a steal.  Take a look around Pinterest, and you’ll find many posts of bloggers touting how little they spend for groceries.

But is this a good thing?  I know groceries are typically one of the largest monthly expenses for a family, but should this automatically be the place we look first to reduce our budget?  After all, there is great truth in the adage, “Pay your farmer now, or pay the doctor later.  In fact, “Americans spend nearly 20% of their income on healthcare costs, while on average spending 10% of their income on food. . .Considering the age-old adage, ‘an ounce of prevention is worth a pound of cure’ may be the first step to attempt to reduce healthcare spending—and the key place to start is food consumption.  If you start to consider your diet a form of preventative health care, you might start rethinking your daily meals” (University of New Hampshire).

Take a look at your budget.  If you don’t automatically slash your grocery budget, where else can you cut expenses?

If you don’t short change your body healthy foods, you’ll save thousands on health care later on.  Meanwhile, why not consider dropping your smartphone and getting a “dumb” phone?  (Yes, I still have a flip phone for emergencies that we bought 10 years ago.)  Can you drive your current vehicle a little longer so you don’t need to have a new car loan?  Can you drop cable?  Do you have subscriptions you’re paying for but you don’t use?  Likely, there are several lifestyle choices you can make to cut your expenses without compromising the quality of food you can buy and eat.

Do you cut other expenses so you can continue to buy quality foods, or do you prefer to slash your grocery budget?

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: budget, Frugality, Saving Tagged With: budget, budgeting, frugal grocery, frugaler, groceries, grocery, grocery budget, tight budget

Personal Finance Reassessment

October 16, 2012 By Shane Ede 6 Comments

Occasionally, there comes a time when you have to take a look at your personal finances and do a little personal finance reassessment.  While the need may arise to do a complete overhaul once in a while, a simple reassessment can usually suffice.  All it takes is a little attention, and some dedicated time to making sure that your finances are in order.

Recently, my wife and I were, more or less, forced to do a little personal finance reassessment.  That’s such a nice, delicate way of saying it isn’t it?  Truth be told, our finances were (are) in a mess. The ripples from when I quit my job last November are still plenty big, and the new job that I have seems to have come just in time to keep us from completely going under.  Combine the drastic decrease in income that event brought about with a couple of people who remained stubborn in their budget, and it was a recipe for disaster.

financial peace jrLuckily, we’re usually pretty good at talking about money with each other.  Don’t get me wrong.  There’s plenty of room for improvement.  But, we’re good about not getting into any heated arguments with each other, and being able to figure out where we’ve gone wrong and correcting it.

So, we sat down and caught up our dreadfully behind budget.  And, let me stop here to say something.  What kind of idiot doesn’t keep doing the budget when he quits his job and is making a fraction of what he used to?  This guy.  Dumb.  So, yeah, we caught up the budget.  About 6 months worth of financial data entry.  Some by hand because our bank doesn’t keep history online over 90 days.  So, one by one, directly from the statements I printed off.  Did I mention how dumb that was?

In case you’re curious, catching up on about 6 months of budgeting takes about 6 hours.  6 HOURS!  It’s done though.

One of the things that we discovered, after having done all of that, is that the reason that we were in the pickle that we were in wasn’t because of the loss of income, although that played a part, but more because of how badly we had slipped in the last few months with our spending.  July and August in particular were well above what June was.  In our defense, those are usually higher spend months because they’re usually the only real summer months we get up here in North Dakota, but it was still way off.  And it cost us.  The last several weeks have been pretty hairy, financially.

The scary part of all of that is that we haven’t had a bad financial situation like that for over 5 years.  And, maybe, in that 5 years, we’ve become a little bit lax in our budgeting, and in our finances in general.  No more.  We’re taking the control back, and keeping our finances in order.  Not doing so could mean disaster.  It surely means stress, and that’s something we just don’t need.

During our little reassessment, there were several things that we picked up on.  Like the fact that we didn’t have any life insurance on me.  In my previous job, my employer kept a policy on me that would have been more than sufficient.  For some reason, they decided to cancel that policy when I quit.  😉  So, we’re now budgeting for life insurance policies. Or, the fact that our spending on eating out and groceries had gone way up.  A simple attitude adjustment helps with the eating out, and we’re going to start trying to use menu plans to keep our grocery bill down and to spread it out over the month. Another thing that seems to be part of the issue is the timing of some of our bills.  Before, I made enough that it wasn’t an issue when the bills came due, we always had at least enough to make it to the next payday.  Now, with my lower salary, it’s getting a bit tight right before the 15th (when my wife gets paid), and a few of the bills that come in right before the 15th are adding a little extra stress.  I need to call a few of them and try to get them moved to a slightly later due date.

In the end, our personal finance reassessment came just in time.  We kept a close enough watch on our finances to see the need arising, and were able to meet the need and keep things from getting any worse.  Chalk it up to a lesson learned.  The (almost) hard way.

When was the last time you had a personal finance reassessment?

img credit: Matt Mcgee, 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: budget, Financial Mistakes, Insurance, Married Money, Personal Finance Education, Saving, ShareMe Tagged With: budget, budgeting, personal finance reassessment, Saving, spending

Killing Debt? Have a Realistic Budget

September 24, 2012 By MelissaB 9 Comments

Do you have debt?  Does it drive you crazy?  Do you stay awake at night wondering how to pay it all off?  Does it feel like you will never pay it off?  Do you argue with your spouse about your bills?

While debt can at times be a useful tool (student loans, for example), when it comes time to pay it back, debt can be a heavy burden no matter if it is good debt or bad debt.  Debt can cause marriage problems and even affect your health.

If you have decided enough is enough, and you want to be free of debt once and for all, you might be tempted to slash your spending and put all of your extra money on your debt.  Be careful, though, because this type of plan can lead to a quick crash and burn much like a person on a crash diet will only follow the plan for a few weeks before giving up.

Before you even begin to put extra money on your debt, you must first create a realistic budget.

What Is a Realistic Budget?

A realistic budget is one in which ALL of your expenses are taken into account.  Perhaps you pay your car insurance every 6 months, and it is $400.  If you want to create a barebones budget so you can pay off debt, perhaps you don’t consider this payment, which can be a mistake.  When the car insurance payment is due, where is the money to pay it?

We have been paying down our debt aggressively, and we made the mistake of not having a realistic budget.  We did have a $1,000 emergency fund, but because so much of our extra money was going toward debt repayment, we continually hit months where we had expenses such as the semi-annual car insurance payment and no cash to pay for it.  We would rob the emergency fund to pay it, and then we would have to stop our extra debt repayment for awhile to build up the emergency fund.  This cycle creates its own stress.

A Realistic Budget May Mean Hard Sacrifices

When you add up all of the payments you have to make in a year that don’t come in regular monthly intervals, you may be surprised.  There is car insurance, house insurance, license plate tabs, vet bills if you have animals, car repairs and maintenance, children’s athletics, and clothing for the family to name a few.  Add up how much you spend on these, and you probably easily have a total in the thousands.

That is thousands of dollars that are unaccounted for in your budget.

Almost a year into our debt repayment, we finally made a realistic budget.  We were shocked to see that when we set aside money each month for a portion of our annual or semi-annual payments (like $67 for our semi-annual car insurance payment), we didn’t have enough income to cover our realistic expenses.  As a result, we had to make some hard sacrifices such as cutting cable completely and pulling our daughter out of her expensive preschool.  These sacrifices weren’t easy, but making them did relieve some stress.  Now we no longer have ups and downs in our money flow.  We set the money aside, and when the bill is due, the money is there to pay it.

We may not be able to put as much on our debt every month, but we have a set amount for repayment above the minimum payment, and any extra money that comes in also gets put on debt.

Creating a realistic budget can help you avoid the stress of not having enough money certain months to pay all of your bills when semi-annual and annual payments are due.  However, you will feel more in control of your money, which can create a positive cycle.  The more in control of your money you are, usually the more money you find to pay on your debt.

What irregular expenses give you financial difficulties?

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: budget, Debt Reduction, ShareMe Tagged With: budget, budgeting, debt, Debt Reduction

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