Friday, March 1, 2013
Money Management - The No-Budget Approach
Last Friday I jumped right into talking about ways to save. While saving money is important, how one goes about having leftover money to save is also important.
In the past, we tried budgeting. On paper things looked great, but executing them was another story. We tried envelope methods, different accounts, cash only, even store gift cards so we wouldn't go over our limit. Every time we went off the budget I felt so discouraged. That would lead to an "I don't care anymore" attitude. Why not buy this, I'm already over my limit.
Moving to the middle of nowhere helps a lot, but what really made the difference was getting rid of the budget. Instead of setting a limit, I started making decisions about whether or not I really needed to buy something. Those bananas look great, but the price just isn't right so I'll pass. Those little decisions really do add up.
When I go grocery shopping I usually don't have a set amount I'm going to spend in mind. Most times I don't even go with a list. I know what I have in my pantry, what I need, and what we use a lot of. While I try to avoid some places like the plague (Walmart) I usually find myself there simply because they have the best prices.
What do I buy? Well that depends what's on sale. Sometimes I load up on bread, rice, dry beans, sunflower oil, blocks of cheese, etc. Because I have a well stocked pantry, vary rarely do I run out of something, so I can wait until I find a good price. This is especially true of cheese and other dairy products. So what if I already have 8 boxes of cream cheese in the fridge. This price it too good to pass up and I know that we will use it.
Everything that goes into the cart has to pass a need it/want it test. I ask myself, do I NEED it or just want it. Sometimes I'll throw something in and after 20 minutes decided that I really didn't need it after all and I'll but it back. My average monthly grocery bill is $200. How do I shop so cheap?
Here are things that we don't buy:
prepackaged/instant food (ex. hamburger helper, frozen pizza, microwave meals)
junk food/ snack food
canned items including cream of..., soups, broths, meats (excluding tuna)
mix items like cake mixes and baking mixes
anything from the frozen section (except for the occasional tub of vanilla ice cream)
That cheap food really adds up. It's much cheaper to buy bulk and make my own.
What about other items like eating out or clothing? Well, since we live in the middle of nowhere eating out is limited to take-out pizza or picking up a rotisserie chicken after the deli has closed and it's marked down. As for clothing, well, I just don't buy clothing unless I have a need for new clothing. Nothing new goes into my closet unless something old goes out. Since I stay at home most days, an old tee shirt and stained jeans are good enough for me.
To sum up my no-budget budget, I don't buy something unless I need it. I shop when I'm not in a hurry and I only go once a month. I don't use cash or a debit card. Writing a check makes me think about how much I'm spending. If I cringe when I write the check, then I probably bought something I didn't need.
Join me next Friday for Money Management - Get the most out of your money
Posted by Christina H.