I’ve Paid For This Twice Already…

Archive for the ‘budget’ Category

As prices of consumables increase, many are feeling a very real budget crunch as far as their discretionary spending categories.  I know we are.   The immediate answer is not to blindly raise your budget to meet rising costs, but there is a point where a budget adjustment may have to be made.  Today I’m looking at how to determine if your budget for an item needs adjusting, and how to figure out what needs to be changed without going overboard and breaking the bank.  Tomorrow, I’ll look at the other side of the issue – what if your budget isn’t working, but there’s no way you can increase it?

To illustrate my method, I am using a standard consumable budget item – the grocery budget.    For us, this has shown the most increase in spending over the past year.  We have had a few factors besides the economy in general contribute to that, including changing our eating habits for the better, and my children getting older and eating significantly more than they did last year.  But looking at your spending alone and then just increasing the budget to equal your spending isn’t the most frugal and thoughtful way to go about it.  Usually, the budget and the spending can come together and meet somewhere in the middle.  Here are the five steps that I went through to figure out if my grocery budget truly needed increasing, what factors I identified that contributed to our overspending our budget, and how I ultimately increased it.

1.  Analyze your receipts – and be honest with yourself.  Every week, I took each of our grocery receipts and marked every item on them as necessary, frivolous, impulse, or some combination of those.  This wasn’t to beat myself up, or completely eliminate anything from our grocery bill that wasn’t absolutely necessary. But knowing is half the battle.  Knowing what percentage of our bill I felt was necessary versus extra, it was easier to understand the divide between our budgeted amount and the actual amount we were spending, and how necessary that was (or wasn’t).

2.  Look over time and determine the real increase in prices of staple items. This may not be possible if you haven’t been keeping track of your spending or keeping your receipts.  But if you have, or save your receipts, look at those staple items you deemed necessary.  What was the price one month ago?  Three months ago?  Calculate the percentage increase over time, which will give you an idea of what percentage spending may be appropriate.

3.  Determine if you have other options you haven’t tried.  I looked at both coupons and playing the Drugstore Game to try and decrease our costs.  Both have had ups and downs.  At first I ended up spending more than I was, but as I refined my methods and worked at taking advantage of money-making deals, my costs on staple items did go down.  The key is to making a method work for you as opposed to against you.

4.  Determine a realistic goal to meet as far as an increase.  Once you are sure that you’re not just frittering your money away on unnecessary increases, look at what kind of an increase you need to make.  This is the percentage increase of those necessary items, plus a little wiggle room for an appropriate level of impulse buys.  only you know what “appropriate level” means.  For me the goal for my impulse and frivolous items is under 5% of my total spending per week.  If I try to make it zero, I get rebellious.  I frequently come in under that 5% mark, but having that small wiggle room makes it more manageable to work to stay within my budget.

5.  Look for places in the rest of your budget where you have wiggle room.  If you’re increasing your budget in one place, you may have to decrease it in another.  For us, we had some wiggle room I could take from as far as my spouse’s salary increase this year and my own increased income through taekwondo.

Ultimately, for us with a number of different factors contributing, I determined that if we were to keep the same food priorities we had already, we’d have to do some budgetary increasing to the tune of about 5% a week.  Luckily for us, it was possible to do that, albeit it a little painful for me to authorize increased spending.  But sometimes, there has to be another option, for the budget is set by more than desire, it is by necessity.  Tomorrow I’ll tackle ways to keep the grocery budget the same even when everything costs more.  It is more painful, but it can be done.

I have been trying to become a more savvy grocery shopper, and part of that has been better incorporating coupons into my grocery shopping.  I’d say into all my shopping but I don’t seem to shop for much more than groceries very often.  I’ve started to consistently get the Sunday paper and not only read all of the circulars and plan my grocery list from them, I’ve been clipping coupons.  I started out clipping too few coupons – only clipping what I absolutely knew I would use because I buy it, exactly, that brand, already.  But I realized that if I can combine a coupon with a sale, I may be able to buy something name brand for less money than I usually buy generic items, and although I have no name brand vs generic preference for these things, I’d like to get the least expensive option possible.

So I started clipping loads and loads of coupons.  basically anything that was for a type of something I’d buy, even if it wasn’t for the exact one I usually buy.  I started clipping coupons in earnest in August, and so now some of them are starting to expire.  And I realized that clipping coupons had a strange effect on me.  If I clipped something, as it grew close to its expiration, I started to feel like I should buy it.  Even if it wasn’t on sale.  Even if the coupon wasn’t a big enough discount to warrant buying that item over whatever else I usually buy.

I haven’t bought anything just because I had a coupon.  Yet.  But if I hadn’t realized that just having the coupon was giving me this feeling like I needed to buy it, I might have ended up buying some things that weren’t a bargain at all, just because I had a coupon.

Just because I clipped it doesn’t mean I have to use it.  Last night I stopped at Meijer (a grocery store) to do my weekly shopping trip there, and they had a new Dole bagged salad kit on sale for buy one get one free.  I didn’t know what the original price was, but I had a coupon for 55 cents for it (which they would double), so I decided to check it out.  It turns out that the regular price for it is $3.99, so with my coupon doubled, I would pay $2.89 for two bags, or ~$1.45 each bag.   I was thinking of getting some when I didn’t know what the price was, because a salad kit in a bag sounded fun.  But it ended up enough more expensive than buying salad ingredients, per ounce, then making my own salads, that I decided to forgo the fun of a nifty salad kit.  So I left the carefully clipped coupon on the shelf for someone else who might want it.

Once upon a time, I believed in treating myself.  But what I didn’t understand is why my treating myself was always accompanied by a small (or large) sense of guilt.  I’m a reasonably good person, and I deserved to have a little fun in life or a few treats now and then, right?  So why did doing so always make me feel so crummy?

The answer was obvious and yet surprised me at the same time.  My fun wasn’t fun because I didn’t plan for it, didn’t budget or save for it, and therefore worried the whole time that I was doing something “wrong” in regards to our financial stability.   Spending money was scary, because I really had no clear idea if we could afford it.

Enter the budget.  Not my half-hearted attempts at remembering to pay my bills on time by making lists of my bills each month, but a real and true budget that broke my income and spending up into all the different things we spend money on.  Not just bills, but groceries, gas, annual expenses, and other things I never really gave a lot of thought to.  And in doing that, I realized that hey, I could actually budget for things that weren’t necessities, and then I would know that we could afford them.  Not that everything in our budget should be non-essentials, but planning for fun as well as for need made fun become actually fun.

So no more do I feel guilty over our annual zoo membership, or if I decide that we need to do something fun as a family.  I plan for it, I budget for it, and then when we have the money, we do it.  Without that guilt or regret that accompanied my past blind spending.  it isn’t much, but it is enough, and it is all the better because it fits within our means without significantly altering our financial goals.  And we’re all a little saner in the process.

No, this is not another ode to why I want a laptop. 

Yesterday my computer monitor died.  Dead, kaput, won’t turn on,  ignores all pleading from me to work.  And, by the way, this is the second Dell monitor I have had that lasted less than 3 years.  The first they replaced because it was still under warranty (with this one that just died).  I am going to investigate if they’ll replace this one too, but I’m not hugely hopeful since it was a replacement of the last defective one (meaning, I didn’t buy this one, and I bought the last one longer ago than the original warranty).  We’ll see.  I’ve got n email in to customer service as we speak.

But anyway.  We have configured things in a temporary solution (I am using my spouse’s monitor to write this at the moment) but that won’t work for the long term.  We both need functioning computers, with monitors, in order to do our jobs.  In a perfect world, where we weren’t in debt and were more prepared for the day to day ups and downs of life, this would be the catalyst needed to go to the end-point solution of finding me a laptop computer so I can work more effectively.  But, we’re in debt, and I don’t want to buy a bargain basement laptop just to have a laptop, so instead, we fix the part that is broken, ie buy me another monitor.  A band-aid, but it makes more sense for us right now.  I’m not going to pull money out of our emergency fund to buy me a laptop when I have a desktop computer that functions just fine.

Ah well.  The monitor just couldn’t wait another year to self-destruct, I guess.  At least now I can get a flat panel. 

I need to buy more checks.  I don’t use checks very often, illustrated by the fact that the last time I bought two boxes, my bank was Bank One instead of Chase (Chase bought Bank One many years ago) and my address on them was two addresses ago.  But I am finally on the last set of the last box of those checks, and so it is time for me to buy more.  I don’t want to buy checks directly through my bank, because they are very expensive, so I’ve been collecting advertisements for check printing companies from the Sunday paper for the last month.  Many of them ended up being repeats but I found three different companies that print checks (I am sure there are more, but I digress).

And the amazing thing to me is not that the different companies charge different prices for boxes of checks.  Of course they do.  The thing that stopped me in my tracks is the different ways fees are hidden in the listings for each company so that they can lower the apparent price, yet make the most money in the end.   One of the advertisements has no mandatory hidden fees.  This company also charges the highest up-front price for the checks.  The one that charges the lowest initial price also has the highest hidden fees, making their final price the higher than the one with the highest initial cost.

And, I must admit, at first glance I was suckered into considering the one with the lowest initial price.  Which, of course, is why companies price things like that.  Look for the low price, and then jump in and buy that one.  But luckily I started digging into every line of each advertisement, and figured out which actually had the overall lowest cost once all the fees were taken into consideration.  I wanted to order 4 boxes of checks, because you get the lowest per box price if you order 4.  They broke down as follows for 4 boxes of duplicate checks:

• Checks in the Mail:  $17.97 initial cost.   $2.95 handling fee per box.  Total:  $29.77
• 4checks dot com:  $16.39 initial cost.  $1.95 handling fee per box.  Total: $24.19
• Designer Checks:  $19.50 initial cost.  No extra handling fee.  Total:  $19.50

So I’ll be ordering 4 boxes of checks from Designer Checks next week sometime, as long as I don’t find something better before that.    That should do me for, well…. the rest of my life maybe.  Or at least, as long as I have this bank account.  I just can’t cut the cord and have no checks at all.  Yet, at least.