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Archive for the ‘Frugality’Category

The Financial Benefits of Food Storage

For my wife and I, and many others, food storage has become a little bit of an addiction. It combines two of our favorite themes, preparedness and saving money, in one neat little package. While many in the preparedness community stress having a good food storage plan as a foundational principle, I do it now more for the financial benefits. As a procurement professional I have noticed that having a food storage program allows us to leverage the quantity of our purchases, when we buy things, and the price benefit of both.

What are the main financial benefits of a robust storage program?

1) You only need to buy when you see something on sale. As I mentioned several posts back, typically the only things we don’t buy on sale now are perishables and milk. And the perishables no longer even include bread, as we have begun baking our own with a brand new breadmaker we found on Craigslist for $40. The benefits to our checking account has been immense. As I learned while perusing the Coupon Mom website, most items go on sale on a certain cycle, usually ever 6-12 weeks. Now, instead of picking up a box of Special K whenever we run out, we buy 10 boxes when it is on sale. And the last time it was on sale it was actually Buy One Get One Free, and we picked up almost as many boxes as a cart would hold. Savings: $2.50 per box times 10, or $25.

2) Buying in bulk saves money. Almost everyone knows this, but many either don’t think about it often or worry about where they are going to store something they have bought. We simply reserved one room of the house to be our food storage/shipping and eBay room, and filled it with racks where we could store things. I felt almost a little sheephish when my wife was at Costco and found the same Special K with a regular price the same as what I found at the BOGO sale, except packaged larger (37 oz boxes instead of 12 oz boxes) – 1 large box cost $7.50 vs. 3 small boxes costing $7.50 (though originally $15).  Because of Costco, now I can buy the lowest priced option at any time for half its regular price. If you have access to a Costco, Sam’s Club or BJ’s, you should definitely take advantage of their everyday savings in comparison to the grocery store! (Plus, they are a good place to pick up large quantities of staples like, (guess what!), rice and beans)

3) Try the off brand. Not every experience I’ve had with private label brands has been great, but there are a good many items where I can’t tell the difference between it and the Name Brand.  For example, my local HG Hills (not a great store, but its the closest grocery to my house) has around 20′ of shelf space right upon entering the store where they have many of their private label items. One day on a whim I picked up a couple boxes of $.35 macaroni and cheese, and $.43 cans of corn and green beans.  The equivalent prices of the name brands is $1.39 for Kraft Macaroni and Cheese and around $1 for Green Giant corn and green beans. I thought the mac and cheese was great (with a little Truffle Salt my wife picked up) and the corn, while not quite as perfect as Publix’s private label, was still quite good.  The AdviceWife thought the green beans were fine as well.

The next time I went to HG Hills they probably thought I must have lost my job or someting as I picked up around 10 boxes of mac and cheese and 2 cases of their vegetables.  I also bought some other items to test (chili fixins mainly) and I’ll let y’all know how they perform as well once I get to making some.  Total savings over 12 months vs. name brand on just 3 items: $125 or more, assuming we eat each once a week.

Now, the above examples are just for 4 food items, and we do the same for every regular item we eat.  At $50 a year savings on average for each item, that’s $200.  On the 30-40 items we regular keep and eat, it’s more like $2,000 a year saved, not through sacrificing our tastes, but simply through better buying.  On occasion my wife clips coupons and we add a little bit more to the total.

So don’t just take a look at what you’re buying, examine how you are buying it and you’ll likely find a significant amount of dollars you can save.

09

06 2010

Financial Preparedness Friday 401(k) edition

Financial Preparedness Friday’s will be articles that combine a ‘What Can I Do Today?’ with a more detailed look at a financial topic or question. 

So today’s ‘What Can I Do Today’ is:  If you are currently working, and are employed at a company that has a 401(k) and you are not signed up, call the Benefits department today and get the paperwork to join.  If your company offers a dollar match in your 401(k) and you are not taking advantage of it, you are not participating in what could by the highest return percentage available to you. 

If you are in your companies 401(k) and you are not getting the maximum match, increase your contribution percentage until you are getting the maximum match.  And if you are already contibuting to get your maximum match, congratulations!  Now take it one step further and raise your percentage by 1%. 

If you say you can’t afford it, my response is that you can’t afford not to do it.  Take a look at the above image.  It shows that Social Security is currently in the red, many years before almost anyone predicted.  That means that Social Security, today, is now spending more money than it takes in.  If you are relying on Social Security to assist you in your old age, don’t.  Being prepared means being financially prepared to take care of yourself without depending on anyone. 

I absolutely understand it is challenging to put money away in a very difficult economy, but I implore you to make saving at least a little bit the first thing you spend your money on (the 2nd if you tithe), not the last.  For those working hourly jobs without access to a 401(k), I’ll let you know a little method that literally changed my life, with little effort.  I’ll warn you though, you will need some willpower.

In 1999, my life, financially and otherwise, was a train wreck.  I was unemployed, I smoked 3 packs of cigarettes a day when I could afford it, drank too much beer, and otherwise was on a self-destructive path.  I had $43,000 in credit card debt and another $3,000 in student loan debt. 

When I say I know how bad it can get, I do.  In late 1999 I filed bankruptcy.  While I believe in paying my debts, at that point in my life I just had no idea how that was possible.  I was making $8 an hour, and I couldn’t even afford minimum payments on my debt, let alone extra to pay down principal.  However, it was after the bankruptcy when the most difficult choice appeared.

Within 2 years of my bankruptcy, credit card companies were offering me credit again.  I actually opened 2 credit lines, and very quickly found myself staring at $2500 in credit card debt.  One day I looked at myself in the mirror and couldn’t stand what I saw.  What I saw was a complete and utter lack of control over my own life.  And it was that day I took a stand.  I called and cancelled one card, and hid the other one and swore I would use it in emergencies only.  And while I can hardly believe it now, I stuck with it.  I paid off the credit cards by 2004, paid off my student loan about the same time, and started on my sometimes-rocky financial recovery.

So how did I manage it?  From my first day of work, even when I didn’t know why, I always paid myself first.  When I first got the job for the company I am still working for and was only making $8/hour, I put $10 a week into an envelope.  It was the first thing I did with every paycheck.  It wasn’t a lot of money, and I couldn’t really imagine that I would ever save any real money that way.  But what it did was more psychological than financial.  It gave me peace of mind.  When a water pump blew on my car, I usually somehow had just enough in my evelope to cover it.  When I had to have insurance or risk driving without, the envelope usually helped me with the last $50 or $60.  When I wanted to take a pretty girl out on a date, I thought that was an emergency too and usually raided $40.  Before I knew who Dave Ramsey was, I had created my own emergency fund. 

When I got a raise at work, I increased the amount I put in the envelope from $10 to $20 per week.  If I did an odd job or sold something on eBay (something I did more and more as time went on), I put a portion into the envelope.  There were some weeks when I would have $800 or more in the envelope, and others where it was near empty, but I never skipped a week or made excuses why I couldn’t put some amount of money in it.  Eventually I even used a good chunk of ‘envelope money’ to pay off my credit cards and start a debt-free lifestyle. 

Today I challenge you, no matter what your current financial status, to stretch and take one small extra step.  As I have said, I will be doing anything I ask you to do.  After I post this article, I will be increasing my 401(k) contribution from 5 to 6%.  (my match is 5%)  I hope y’all will do the same.    So whether it is putting $5 in an envelope or saving some of your birthday money instead of spending it, I guarantee there will come a time in your life when you will be glad you did.

14

05 2010