Step 3 is all about analyzing our spending and finding out realistic ways to save money. Inflation has been ugly this year in 2022 across the world. We are feeling it at home. However, after analyzing our finances, we should not be letting inflation hurt us as much as it has.
As I said in my previous post in the Time Series Challenge, our family decided to do a categorical approach with savings. We feel this is the best way to make lasting changes that impact the rest of our lives. The first category we are focusing on is food. We spend roughly $1,400 on food a month for just a family of three. This does not just include groceries, it also includes random coffee purchases, going out to eat, etc.
This number was alarming to both myself and my wife, so I decided to break it down into subcategories and deal with each in turn.
First food category: Necessary groceries. Our current grocery store of choice is Kroger. It is just a few minutes from home and work. On average, we have spent $700 on groceries a month. So getting a better handle on unnecessary grocery purchases should really jumpstart our savings.
Our current goal going forward will be to keep necessary grocery costs to $75 a week or $300 a month. If we buy in bulk, which I suggest doing during times of higher inflation, then we will divide the cost of an item over multiple weeks. Meaning, if we buy a bag of rice that costs $3 and that bag of rice should last us 2 weeks, we will consider the actual cost of that item as $1.50 for that week. This is going to take extra work on our end but buying in bulk is a good way to save money.
Second food category: Daily subconscious purchases. The first one that comes to mind is coffee or coffee drinks. We have an amazing locally owned coffee shop right next to our office, and my wife and I go there regularly. Personally, I go there 4 to 5 days a week. Each day, after tip, I spend $2.59 at this coffee shop. This brings my weekly spending for coffee to $12.95 and my monthly total to $51.80. My wife does not go to this coffee shop as often as I do because she works about 10 miles away, but her monthly total is approximately the same as mine due to not liking plain black coffee. So, together, we spend $103.60 a month at our local coffee shop.
After much thought, we are not going to purposefully change this habit because it does bring us a lot of joy. And we also like to support local stores. However, consciously spending this money may have beneficial unintended consequences, such as purchasing less coffee. Time will tell!
The second subconscious purchase we make too regularly is unplanned delivery, takeout, or easy lunches. Of our current monthly food spending, we spend roughly $50 a week in this category. This comes out to $200 a month. This category should be our easiest to cut out completely IF we plan correctly. In other words, if we have every meal planned out and we already purchased our groceries for these meals, it will be far less likely we take the easy way out. At least for the foreseeable future, I want this number to be $0.
Third food category: Eating out. This is a category my wife and I love. We really enjoy going to dinner as a family. It can be a hassle with a 2-year-old, but we still enjoy it. We spend on average $100 a week in this category. That comes out to $400 a month. It will be a challenge, but we want to lower this to only going out to eat once a week to make it more special and aim to spend just $40 a week (or $160 a month).
Terrible Transition (Dad joke for writers)
Well, there you have it. I do not think any of these changes are too extreme. You are probably thinking how in the world are we spending this much on food per month?? This was my first thought when I did a deep dive into the numbers. But in my goal of transparency, I wanted to share this with you and now use this knowledge and accountability to our advantage.
A lot of people may give us push back on not cutting out the frivolous coffee spending and that is fine. I feel we made a big step with this spending subcategory due to making the subtle change from “subconscious” purchase to now a “conscious” purchase.
Here are the numbers in a more concise format:
Monthly Food Savings
Current Monthly Food Spending: $1,400.00
New Monthly Food Budget: $563.60
Rough Savings: +$836.40
Overall Monthly Saving Numbers
Current Monthly Spending: $7,747
New Monthly Spending With Added Food Budget: $6,894.60
Overall Exact Monthly Savings: +$852.40
This was a very tough post to publish. To put it bluntly, it is embarrassing.
In my full-time job, I always tell our clients not to be scared of more information. I try to do my best to practice what I preach. So, although doing this deep dive was scary, I am going to embrace this knowledge and use it to better our lives moving forward. We also plan to attack other categories in the future once we become a Master Food Saver!
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