Tuesday, March 4, 2014

Question: Are You A Household Financial Detective? Part 9

Topical Tuesday KNOWSY Readers, did you miss your daily dose of KNOWSY News? How many of you saw the Oscars Sunday night? Sadly, I missed it, of course the year that has been most watched in a couple of decades was the one I did not get to watch, so I missed J Law's trip on the red carpet (will this become a yearly event?), the Selfie, and especially the Pizza delivery, that should have been hilarious. Aah, as the saying goes...there's always next year!
Now onto our topic of the day, for you regular readers you already now about this ongoing (10 week) series about ways to cut spending on your Household Budget to Save Money. We are now in the home stretch, so without further ado, here from one of my most recommended sites DailyFinance.com is the article written by Brian O'Connor.

The $1,000 Challenge, Part 9: Nibbling Away at the Family Food Bills

Young woman with shopping cart in the supermarket when shopping
As part of my attempt to save $1,000 a month by cutting $100 from the top 10 categories of the family budget, I found that the "living expenses" category came to 10 percent of our spending -- and more than two-thirds of that was groceries. But after a few weeks of trying to trim those costs, I found that saving on food comes in nibbles, not big bites.

So far in The $1,000 Challenge, I've shown you how I cut nearly $800 from eight of my family's Top 10 spending categories. If you missed any of the previous columns on DailyFinance.com,

Take our free
online course on:

Behavioral FinanceStart Now »View all Courses
check out the whole series. For details, get my book, "The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese."

We'd already been cutting back on food and other supermarket sundries, buying paper goods in bulk at a warehouse club, splurging on premium steaks only when they were on a big sale, and switching mostly to store brands and generics for canned goods and staples.

Finding any further savings was going to mean clipping coupons, which takes a lot of time and produces little savings. For help I turned to Teri Gault, founder of the Grocery Game, a guide for combining coupons and store sales. Gault's company surveys 10,000 items at major grocery chains each week and matches them with coupons. Her strategy relies on the fact that most items in the supermarket go on sale at some point every 12 weeks.

When she took me shopping, we scored two gallons of free milk by purchasing several boxes of cereal with a coupon. I could likely halve my trim household grocery tab of $532, she said, by planning meals around the items already on sale instead of making a weekly menu and shopping to fill it in.

Average Family of Four Saves $512 a Month, Grocery Came Claims

Doing the latter "puts people in a vicious cycle of paying full price for 70 percent to 80 percent of what they buy," Gault says. Surveys of Grocery Game users, who pay $5 for the weekly guide, find the savings for a family of four averages $512 a month, she adds. That's partly because she includes the savings that come when strategic grocery shopping replaces any meals eaten out simply because there's nothing in the house or no dinner has been planned.

The technique is pretty easy to pick up. Start keeping an eye out for specials and sales. For example, that trip, I recognized bottom round roast was a good deal. Sure enough, it was on the weekly Grocery Game list marked in blue, Gault's code for "invest," indicating something you should stock up on -- if you'll eat it. This tends to fit in with my own philosophy of building systematic savings into the things and services you buy most frequently.

On her list, I saw red and yellow bell peppers for $1 apiece. These are staples in our house, either for grilling with other vegetables in the summer, or, in winter, sauteed with onions, turkey meatballs and the mouthwatering tomato sauce my wife, Mrs. Funny Money, cans with our friend Cynthia. I had purchased frozen ground turkey at Costco (COST) a few months before and converted the first few pounds into meatballs, which we split into two-serving batches in freezer bags.

Peppers that cost $2 -- prepared with onions, garlic, meatballs and half a jar of sauce from the larder -- make for a really good, really cheap main dish. I could add pasta (Gault listed Mueller's Whole Grain at $1.17 that week, not a rock-bottom price, but good), but I usually just grab a manager's special on a bagged salad mix and skip the carbs.

Leftovers and Planned-Overs Stretch the Budget

The really big savings in this scheme come from using leftovers. Think about your total family food costs, including lunch, carry-out food, and meals you grab at a restaurant when you haven't planned anything to cook, don't feel like stopping at the store, and are just too tired. That adds up to a lot of needless spending, often when you could cook something cheaper, better and more tasty at home if you planned just a bit.

For the Funny Money family, real savings comes from cooking stuff once and using it for several meals. At Thanksgiving, I stocked up on turkey breast at less than $1 a pound, and last week I pulled one out of the freezer. First it got roasted for a nice Saturday family sit-down dinner. (Yes, we had two working parents and their child sitting down at the same table, and, most amazing, eating the same thing. I have alerted The Guinness Book of World Records.)

Much of the remaining turkey went into sandwiches, a reheated leftover dinner, and a last sandwich or two with canned soup when I worked late. The carcass got stuffed into a slow cooker along with a bouquet of spices, onions, and whatever was getting ready to turn in the vegetable bin. Mrs. Funny Money left that bubbling down for a day or so, and we had a big batch of lovely homemade turkey soup to eat and freeze. That turkey cost less than $10 and yielded at least six meals. Ben Franklin wasn't kidding when he called it a noble bird.

The same trick works with two pounds of flank steak on sale for $3.99 a pound. Two 12-ounce steaks get marinated and grilled for London broil, with one for dinner and the other saved to top a Caesar salad later. The remaining meat was cut up for beef stir-fry over brown rice. The fresh green beans on sale get used as a side dish for the first dinner, with some saved for the stir-fry, too.

Substitute. Skip. Save.

Substituting or skipping ingredients is another option. That flank steak in the grilled Caesar stands in for a rib-eye. A fish recipe with ginger, chiles, soy sauce and sherry can call for red snapper all it wants, like some piscatorial Stanley Kowalski crying out for "Stella! Stella!" but I've made it with tilapia, it works great with catfish and, if you're in the right mood, the cheap, farm-raised salmon from Costco. A 99-cent package of manager's special hamburger buns can stand in for toast and sandwich bread this week.

Put it all together and, when it comes to grocery shopping, this is the low-hanging fruit (ha!) that can save you a lot of money without a lot of effort.

I found the Grocery Game easy to use. It took about a half-hour of planning, as well as some legwork to find the sale items. But the savings after the first four weeks weren't dramatic -- $37.23 for the month, though we have added a lot to the freezer and pantry.

"It doesn't surprise me that you're not saving a lot yet, because you were already a good saver," Gault said. "What you're doing is amassing things you'll use beyond the next 12 weeks. After that, your needs are basically just your produce and milk and replenishing your investments."

I talked to one metro Detroiter who did slash her supermarket spending by 50 percent with the Grocery Game. That kind of savings would not only put me over the $100 I wanted to cut out of this category, but it would also catapult my savings for the entire project to more than $1,000.

But at that moment, my attempt at cutting the food budget had left a bitter taste. It also left $167.98 in savings I had to find in my final category: housing. Forget the turkey breast -- I was just hoping I didn't end up eating crow.

Here's the running total for the series so far:
  • Week 1 - Miscellaneous Spending: $132.89
  • Week 2 - Utilities and Phones: $139.39
  • Week 3 - Transportation Costs: $41.61
  • Week 4 - Kid Costs: $114.50
  • Week 5 - Work Costs: $90
  • Week 6 - Personal Spending: $104
  • Week 7 - Entertainment: $108
  • Week 8 - Insurance: $64.40
  • Week 9 - Groceries: $37.23
Total Monthly Savings: $832.02

Read them in any order you want -- just get in there and start saving! Check out the series introduction to get the big picture on finding big savings in your family budget. You can check here on DailyFinance.com, follow me on Twitter, or go like The $1,000 Challenge Facebook page to get a heads up whenever a new installment comes online. Or better still -- don't buy the book. WIN it free. DailyFinance is giving away 10 copies, and all you need to do to toss your name in the virtual hat is follow @daily_finance on Twitter and re-tweet one of our $1,000 Challenge Giveaway Tweets. To find our tweets easily, search for #dailyfinancegiveaways.

Now then my KNOWSY Detectives, can you sense how close you are to solving this case? The Mystery of The Household Budget has been one that has baffled more than one sleuth, but KNOWSY Sleuths are another breed all together ;) . With that in mind, take heart, as well as your trusty magnifying glass and finish what you started nine weeks ago, unravelling this mystery!

No comments: