Do you like to stock up on items when they are on sale at steep discounts? What about buying clearance items like toys and clothes that are out of season? If you answered yes to either of these questions – then you are like my wife and I who try and find the best deals around. While we don’t really buy items that we will never use just because they are on sale, we may pick up something we never had actually planed on. Shopping for discounted items and clearance items is one way that we are able to manage our family budget that relies on one income.
One of the problems that our family faces when we come across a deal that can’t be passed up is how to budget for the unexpected expense? Most of the time we take the money out of our monthly grocery and entertainment budget which is set at $600 per month. Other times (depending on the item) we may take the money out of a birthday or holiday gift fund we have started. Regardless of where the money comes from in our budget – we adjust accordingly and continue to stay within our budget. That means some weeks we sacrifice and may really cut back on grocery items to make up the difference.
A perfect example is when my wife was shopping earlier this week and found several outdoor toys on clearance marked down 75%! She sorted through many of the items and picked up a ride-on toy for our youngest son’s birthday this summer. The original sticker price was $100, so she picked it up for $25. That was an unexpected cost that was not necessary but will help us save some money when our youngest son’s birthday comes up this summer. As a result of this purchase, we are going to cut back $25 from the grocery budget this week.
After my wife picked up the discounted toy earlier this week, I started thinking of other ways we could account for these unexpected items within our budget. Then I thought we could start setting aside a few dollars per week (not sure on the amount yet) to a fund setup just for these purchases. I like to call it our rainy day fund for stocking up. We actually set aside money each month for things like auto repair and maintenance, medical bills, and other variable expenses. Some months we may not use any of this money so it adds up. Other months when we go over the budgeted amount we simply use any excess funds to make up the difference. So why not setup a similar fund for variable expenses for items that are non-essential when we stock up?
I will be working to readjust our monthly budget to account for this new fund or expense. I think this is an excellent way to keep money set aside on a monthly basis for those unexpected purchases to stock up on birthday gifts, food items, and out of season clothes. All of these types of purchases are not planned but will help us overtime continue to live within our means.
How do you account for these types of one off purchases? Do you agree that stocking up on items helps your overall budget in the long term?
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I am not a huge fan of stocking up, of course, it is just me – not a family of four. I need my cash liquid right now, so I don’t like investing in something that I won’t use for month, you know? However, I do have a few things I like to stock up – meat when it is on sale, gifts, and home improvement items if I can get a great deal. The toy your wife got sounds great! I do have a number of people that I buy for throughout the year and if I see a good deal, I will stash it away. I also like to keep a couple small gifts on hand for unexpected occasions. Meat I will buy in bulk and freeze, but not many other groceries. And for the home improvement – I picked up some high quality black plastic garden edging for $4 that was normally $29. I have a bunch of yard work I want to do this spring, so I picked it up.
I budget them out of their own categories – DIY, groceries or gifts, but you are right, this does mean I occasionally go over in those areas.
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@Dawn – We actually hardly ever eat or buy meat so we don’t have to worry about it. Plus my oldest son (5) just decided he wants to be a vegan. He has no idea what a vegan actually is but hates the thought of eating meat. So really we stock up on nonperishable items and then buy our fruits and veggies every week.
pfincome’s last blog post..Recession in America – Gardening
Good topic for discussion… I base my response to this line of discussion in my own life on the timeless wisdom of Shirley Q. Liquor…”99 cent is not a bargain if you don’t have 99 cent”.
Humor aside, this is a profound statement and can/should be adapted. For example, a good price is a bargain only if it’s on a product I routinely use or can easily substitute for one I use. My wife just recently purchase Target branded dryer sheets 2 for 1 vs. the name brand. This is a bargain because we use the product so we “stocked up”… but I don’t care how inexpensive brussel sprouts are listed, it will never be a bargain for me.
At the current time we do not have a budget or savings category explicitly set aside for maximizing the bargain pricing. We didn’t spend $30 ‘extra’ dollars on a 2 year supply of dryer sheets just because they were on sale, but we maximized our shopping at the intersection of need and price. In some instances we’ll “borrow” from one budget area to maximize on a deal somewhere else but that’s exception processing.
I’m new to your blog (thanks to Dusty at Becoming Debt Free and his link round-up) so I don’t fully know your situation. I personally would be challenged to start a “bargain fund” since I am still working on getting out of debt. One reason is the high value I place on debt reduction and 2 is the risk I might feel to “find the bargain” each month rather than allowing that money grow for the best or bigger bargain next month.
That said, I really like your logic and thinking, I guess my question or concern comes down to execution. I’ll add you to my reader today so I can track along with your progress.
Good luck and keep us posted!
Dave
Do You Dave Ramsey?’s last blog post..I make $10.50 an hour
@Dave Ramsey – Glad you stopped by! Dusty’s sites are awesome!
Our situation is that our only debt is our mortgage and one vehicle which we could sell if we had to. So there is not a lot of debt to pay down and I don’t feel like paying extra on our mortgage just yet. I try and free up money so that we can use it to invest in passive income sources so that one day we are self sufficient and don’t need to rely on any job for income.
All that being said – you make some very good points. There are way too many people out there that pick up bargains just because they are on sale. In the end – they don’t really need them.
pfincome’s last blog post..Recession in America – Gardening
It’s definitely worth stocking up on non-perishable goods right now. With all the money being pumped into the system, it’s likely we’re going to see quite a bit of inflation down the line.
Heck you can even stock up on food if you get into dehydrating. There’s a lady on YouTube (dehydrate2store or something similar) who shows you how to take that 10 pound bag of potatoes you got a great deal on and make sure none of it will go bad.
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@Lindsay – Great points. I agree that inflation is going to be the next big thing we need to deal with.
pfincome’s last blog post..Recession in America – Gardening
I stock up on groceries by buying a quarter of beef and about 50 lbs of freezer poultry at a time. I have two ‘grocery’ line items in the budget – one just for ‘stocking up/freezer’.
I also have a ‘gifts’ line item.
Both of these categories run an excess at least part of the time – just like the car repair fund. It works out very well.
@karla – Sounds like our budget is similar to yours. While we don’t have the stocking up budget, we do have similar situations for car maintenance.
pfincome’s last blog post..Recession in America – Gardening
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