Budgeting for the completely financially illiterate
Taking an honest look at your finances and spending habits is a tricky business. But we realized it must be done. You see, it’s completely incomprehensible to me how the two of us, who earn decent livings, live in a modest house (Our neighborhood, White City, is affectionately referred to by many as “White Trash City”), and drive modest cars (that are both completely paid for), could possibly be as broke as we seem to be all of the time. Where is all that cash going?
Apparently, we’ve been eating it. A quick download of our bank statements over the last 3 months into an Excel spreadsheet revealed that we’ve spent (over that 3 month period):
- $939.48 on eating out for an average of $313.16/mo
- $1559.89 on groceries for an average of $519.96/mo
Now, I don’t know if you realize this or not, but there are only TWO of us living in the house. And I’ve never really been too concerned with budgeting food because it’s a necessary item. Whenever we’ve tried to cinch the budget, we look at downgrading cable… cutting back on our cell phone plans, etc. But I think I can safely assume that the two of us could SURVIVE if we spent less than $833.12 every month on food.
I’ve found several websites on reducing grocery bills and such. I’ll report on anything that seems to have an impact. One suggestion I found was to try to incorporate at least 1-2 vegetarian meals each week. That sounds simple enough, but I’m not about to scarf down any tofu or anything. So if any of you have any recipes or ideas for good vegetarian meals that are balanced (still have protein) but not all new-agey (tofu), please let me know.
And if you invite us out to dinner and we invite you over instead for some Raman noodle surprise, please just throw some pennies to distract us and run away.
One vegetarian style dish I like to make is to miz together a can of black beans (drained and rinsed), some pico de gallo and reduced fat mozzarella – its very versatile and you can do a lot of things with it depending upon how you cook it.
1 – Mix the three ingredients together, heat in the microwave then wrap up in a tortilla for a burrito.
2 – Mix the 3 ingredients together, fold in a tortilla and heat on stovetop for an awesome quesadilla type thing.
3 – Mix the beans and pico de gallo together in a small casserole pan & warm in the oven, then top with the cheese & put it under the broiler for a bit to melt & brown the cheese and have it that way as either a main dish or serve with tortilla chips as an appetizer.
One of these days I want to try these 3 ingredients over rice.
This isn’t vegetarian but in college when I was super poor I would save money by buying whole chickens and could usually get at least 3 meals out of it.
Dinner 1 – Roasted in the oven
Dinner 2 – cut off most of the remaining meat and fix a stir fry type meal or some kind of pasta dish
while eating Dinner 2 I would start the process of Dinner 3, cooking down the carcass in a big pot to make chicken stock
Dinner 3 – Chicken soup – after making the stock and sifting out any bones, add in some frozen veggies and some rice.
occaisionally I would still have enough of the soup left for Dinner 4 which would just be to cook some bisquick dumplings on top of the soup.
Jaime and I have created a budget in Excel of our expenses and we too were surprised by the food expenses. You don’t realize how much you spend until you write it down. Amazing.
What really sucks is that, thanks to farm subsidies, junk food is significantly cheaper than wholesome food. About 1200 calories in junk food has the same cost as 250 calories in carrots! While we can definitely trim down a lot, we have to be careful to do so without sacrificing a lot of nutritional quality in the process.
It’s amazing isn’t it. Our food budget and eating out budget dropped a bit when I started to work from home. The sad thing is that you are correct, if we are in a tight spot with money the first thing to go is healthy food.
I almost fainted when I read how much you spend on eating out. Fainted!!! (Almost.)
I’ve told you about our Treat Days, right? That’s the one day a month we go out for dinner and do something fun together. It’s at the end of the month, and we go to any restaurant we want, and then go mini-golfing or something. The whole rest of the month we just look forward to the next Treat Day, and it makes it so special. If you want to steal my Treat Day idea, you may.
If it isn’t writen down it isn’t a budget. All expenses must be in there. some feel that things like depreciation on your car because of time & use should not be included. It costs you so much to drive a car each month even if the car is paid for. Insurance if $1200 for 6 months then $200 needs to be budgeted. Make sure the $200 per month is set aside for that purpose & none other If you write it all down including mad money that will be allowed and stick to it you’ll be much happier later. Plan to live off 90% of your net income. 2 bits of wisdom: 1 if you spend more than you earn today then you will not be able to spend what you earn tomorrow Interest is a killer and you’re either earning it or paying it. That brings up #2 You need to get to the point where you earn money while you sleep. Last year 1/3 of my income came from my real job and it took a lot of years of budgeting and saving / investing to get there.
Our car insurance is actually insanely low. We pay about $80/mo for full comprehensive on both vehicles. Now that mine’s paid for, we might even get further discounts. I’ll have to check on that.
And I’ve written down a budget plenty of times. The trouble is we don’t ever use it. We obviously need to make some changes, but it can’t happen all at once or I’ll go into shock or something. So for now, I’m going to focus on the 2 biggest trouble areas: eating out and groceries. Once we get that under control and we’re actually STICKING to a budget (in those areas), then we’ll take another look at spending and cinch it in a little further.
The first thing we’ve done to implement our new changes is that we’re not allowed to use the debit card for either of these things anymore. I’ve taken cash out of the bank for groceries and when we run out, we run out. Then I’ve transferred a certain amount of money into each of our personal checking accounts for dining out/entertainment (what my dad would call “mad money”). If we want to go do something fun like dinner or a movie or something, one of us will have to treat the other with what we’ve got in our personal checking accounts.
Last night I planned what we would eat for dinner for the rest of the month. I factored in items that we already had and then tried to plan meals using leftovers for dinner (One of our favorites is that if we have a pot roast for dinner on Sunday, a couple days later we have beef stroganoff… that kind of thing)
My wife suffers through our budget. I was an accountant in a previous career, and those practices have stuck. We started keeping a budget two months after we got married. 20 years later, we still do. We can easily see where we spend our money. Five kids and a single income keeps things tight, but discipline is possible if you focus.
I have counseled about finances with many couples over the years. I have found that two elements are necessary: 1) A financial system that both partners can live with, and 2) that has fewer outflows than inflows. Get those two things right, and the rest just comes along naturally.
Omelettes make for really good vegetarian meals.
This reminds me…I want to have you guys over for dinner sometime.
debit cards have got to be the death of any budget. I take $200 out of the bank twice a month for my mad money when its gone I don't spend. All business stuff gets put on a credit Card which gets paid off every month. I leave the spending up to my wife who spends it on grand kids and kids!!!!
Ho-leee guacamo-leeeee! As they say 'round these parts, I 'bout fell out when I read how much you guys spend on food. I spend maybe $150/month total on food. Of course, I'm poor and extremely sedentary, but still… and I only eat whole foods, no processed (well, except for my "anything I want Fridays" of course! 😀 ) I'll see if I can't write up some kind of Aunt Jean's How to Eat Healthy, Cheaply.