I see people every week who make a good, even great living, but still feel like they are barely surviving. They feel a sense of suffocation about their finances and anxiety sets in. Generally, as I said in a previous post, this is due to lack of liquidity. Lack of liquidity is due to spending more than you earn each month after taxes and benefits are taken out of your check.
Strangely, it’s always the same 2 spending categories that really stun people when they see how much they spend. Not only is it surprising, but this category doesn’t even give people much to show for their spending. So where do people seem to spend more than they need to and not notice it?
I like to split “feeding yourself” into 3 categories, because each represents something different psychologically:
1) groceries (anything you buy at the supermarket including inedible things like detergent);
2) take-out/snacks (any place or thing you eat that is not served by a waitress or purchased in a grocery store); and
3) eating out (eating outside your home and being served by a waitress).
When you feel out of control or stressed out you’re not going out on date night, you’re probably getting take out and bringing the kids to the grocery store and getting a lot of extra stuff you don’t need because you don’t have a minute to think.
Surprisingly, ‘eating out’ is rarely a problem for most people. Numbers 1 (Groceries) & 2 (Take Out/Snacks) are generally the first and second biggest money pits in a family’s household budget. Let’s take each one at a time.
1. Groceries – The average family should spend $200-$300/person/month so if you have 4 people in your household, your grocery bill each month should be about $800-$1,200.
You’d be surprised how much people overspend on groceries by NOT doing the following:
- COOKING!! Cooking is the best thing for your body and your wallet. Plan your meals and eat less prepared food. It’s cheaper and better for you. Win/win. Cook big on the weekends and eat leftovers during the week. Hire a sitter and go to the store ALONE and come home and cook. The sitter is cheaper than overspending on food and not cooking. I promise!
- GOING TO THE STORE ON THE SAME DAY EACH WEEK – going to the store several times per week or even once per day and getting “just a few things” is the quickest way to overspend. Set a day and only go on that day. If you can’t make it once/week, set two days per week and only go then. If you run out of something, you will survive until your shopping day.
- GOING TO THE STORE WITH A LIST – going to the store with a list of what you need, and not shopping by sight are critical money savers (and it’s good for your nutrition too). Make a list. I’m not saying you can’t deviate from your list, but the most important part of making a list is that you look through your kitchen before going to the store. You are far less likely to have several bags of tortillas or open jars of peanut butter. Less waste more cash!
2. Take-out/snacks – You should only get take out, at most 4 times/month for dinner (once/week) Cups of coffee, sandwiches, burrito bowls, Chinese food, cake lollies, the buffet at your favorite expensive grocery store or whatever. If you ate it and it wasn’t delivered by a waitress or a grocery store, it’s in this category.
This is where planning matters. Yes, I know everyone is so bone-crushingly busy these days, but one thing will decrease your take-out spending (and probably your waistline) – COOKING!!!!!!! I can’t stress this enough. If you just prepare meals at home you will save money and be healthier. Stop relying on stopping by the fast food place or grabbing a salad at a posh salad store (sort of healthy right?). Pack snacks and lunches.
De-busy your life enough to cook most of your meals at home including eating leftovers and simple pasta meals. I don’t personally buy into all the “busy” chatter out there. When I ask “busy” people what they are doing that makes them so busy, they don’t seem to know. It’s your responsibility to feed yourself and your family properly and make sure you’re spending less than you earn each month. You can do it by cooking and enjoying better food from your own kitchen.