Friday, November 9, 2007

Reducing the Grocery Budget - Part Three

This is the third post I have written in a series about how we reduced our grocery spending. If you haven’t already had a chance to read the first two, or would like to review them, you can find them here:

Reducing the Grocery Budget - Part One

Reducing the Grocery Budget - Part Two

So, we’re up to part 3 and we’ve yet to really touch on the big “B” word – the budget. How do you decide what a realistic budget is for your own unique situation?

Well you START with what you’re currently spending. That’s one of the reasons WHY it is so important that you KNOW what you’re currently spending. Because that is your starting point for your new grocery budget.

THEN you start to play the grocery budget limbo. Now, I’m pretty sure I read about this idea at Unfortunately I cannot find a place on her website that refers to this exactly. Nonetheless it’s a website that is well worth having a read when you get the time. She has lots of great ideas that I have found helpful in my quest for frugality and home organization (yes, it definitely is an ONGOING learning process lol).

The grocery budget limbo is quite an easy game to play. Now I’m assuming you all know how to play limbo? You know that game where you have a broom handle or similar held up nice and high and you all take turns going under it without touching either the handle or the floor (and without bending forwards). If you break any of those conditions, you’re out and the game continues with each round the broom handle being lowered slightly.

So the grocery budget limbo works much the same way. The goal is to lower your spending a little bit each week/fortnight/month. How much you’d like to lower it by each time is completely up to you. You can choose a percentage or a dollar amount. And yes, it can be $1 a week if that’s what you’d like. :-) If there are just 1 or 2 of you and you already have a reasonably tight budget, $1 might well be the most appropriate starting place.

If you have a family or feel that you spend plenty on your groceries, I would suggest starting with a nice round figure like $5 or $10. You can get more adventurous than that if you'd like but my experience has been that if I take smaller baby-steps, I'm more likely to make changes that will LAST. Biting off too much at once can lead to getting overwhelmed, frustrated and ultimately giving up and resorting to "whatever I spend I spend".

To give you an idea using my own figures. It has taken me 3 years to move from spending $140 per week to spending $100. Under ordinary circumstances (ie. if I wasn't trying to reduce our grocery budget) we increase our grocery budget each year by 5%. This has been to allow for both increasing food prices and our growing family (growing in both number, from 2 people to 5 people and also in appetite as our 3 "little people" grow into "bigger people"). So in essence, our spending has decreased over that 3 year period from what *would* be $160 per week down to $100 per week.

I guess I'm sharing these figures to encourage you that it can take a while to really see changes in your grocery spending. I haven't spent the past 3 years completely focused on reducing our grocery spending either. I prefer to challenge myself for a short time and then have a break from focusing too much on the figures. I still prefer to record all my spending all of the time - I like the security of *knowing* where our money has gone. However, if I were always focusing on getting our grocery bill lower, I think I would find that too boring. It works for me to focus on it for a time and then give myself a bit of a break. The breaks also help me to see if the changes I've made have become "habits" (and therefore stick even when I'm not specifically trying) or whether things blow out as soon as I'm not watching carefully.

I have found that tracking our spending has been the most significant change we've made to managing our finances since we chose to take the path of more frugality and a simpler lifestyle. There is more information about how I do this in my Tracking Spending post that I wrote a little while ago. Basically I do it by starting with my "budgetted" amount and subtracting anything I spend from this so that I always know how much I have left in a given category at any time. You can achieve a similar thing with using cash and some kind of bag or envelope system as well (as long as someone doesn't move cash from one spot to another.....).

So, back to the "how low can you go" game/concept. How do you know when it's time to stop trying to lower the bar? Best not to keep going until you fall flat on your back. ;-) I think it's helpful at this point if you can understand a little of your own personality here. With my budget amounts, I prefer to allow a little bit MORE than what we *really* need. I personally find that if I have overspent on our budget, I'm more likely to throw the towel in and spend more. All the time that I'm comfortably under budget, I seem to find it easier to spend less. Some people have a tendency to spend every last cent so if they allowed a "buffer" amount in their budget, they would always spend that. If you're that kind of person, adding a buffer amount into your budget is only going to encourage you to spend more.

Don't be afraid to have a bit of a play around to find what works for YOU. There is no perfect system out there that suits every single person. There is no "magic" figure out there for the "perfect" grocery budget. Take some time to just observe what is happening with your spending and how that makes you feel, react and so on. The same applies to whether you use cash, credit card (that is paid in full - I'm not advocating credit for groceries if you can help it), debit card and so on. We could debate for hours on whether or not you'll spend more using one method or another. The only way you can really find out what works for YOU is to try a few different ways and see what happens.

One thing about budgetting in general that I have found really hard to get my head around is allowing some flexibility. When I decide what our budget will be for various categories, I usually do so for a 12 month period and during that time things can change. I'm not so good at dealing with change. I much prefer things to stay the same. :-) One way I do get around this is by allowing some "buffer" in my grocery budget. Like I said before, that will work for some and might not work so well for others. Just be aware that you need *some* flexibility when it comes to budgets (without giving yourself permission to just spend whatever you feel like! LOL).

What you really want to avoid as much as possible is frustrating yourself. If you feel like you're somehow "failing" in your attempts, it's more likely that you'll give up. That's what we want to avoid. :-) If you expect to be able to decide on a budget without allowing any flexibility along the way, there is a real danger of that happening.

I hope I'm explaining myself clearly enough here. If you have any questions, please feel free to ask by using either the comments section or the "email me" section of my profile. :-)

Next Week : I'm planning to begin writing some suggestions for ways to cut those grocery budgets. :-) If you haven't yet started tracking what you're spending on the groceries - now's the time to get started so that you have some way of knowing whether or not you're actually succeeding.


Cellobella said...

This series is really good and inspiring.

I'm the sort of budgeter that well doesn't. So I'm going to try your plan and see how I go.

You make it sound... possible.


Simple Blog Writer said...

Your limbo analogy is helpful! I've been getting back to the basics with grocery budgeting. I find the grocery store a real creative inspiration for me and I tend to be tempted by colors and new-to-me ingredients. I'll just lower the limbo stick a little bit at a time. Love that idea - much more interesting to think of limbo music and dancing than thinking solely of numbers.

Amy said...

I'm really enjoying your wisdom! Thanks for sharing.

Ali said...

I've reduced our grocery budget over a period of about 3 months buy purchasing extras when items are on sale and now I'm at the point of hardly buying anything that is full price ~ it does help to have storage space...

lightening said...

CB - I'm glad you're enjoying it. Good luck with your efforts. I hope you're pleased with the results. :)

SBW - I find adding a bit of fun to a challenge really helps. :)

Amy - thanks for that and thanks for reading. :)

Ali - yes, storage space can be a factor in reducing the grocery budget. It can call for a little bit of creativity and thinking outside the square if you have a smaller home. I'm glad you're finding good success with your shopping. :)

BethP said...

This is soooo well written and described. I love how you describe the process (and competing with yourself rather than others!)

I'm up for the challenge!!!