Passive Family Income » grocery shopping

Read Your Credit Card Statement – Detail is Important

John S. — Fri, 01 Oct 2010 11:00:24 +0000

photo credit: Andres RuedaDo you review your credit card statement every month? What about your grocery bill or other store receipts? If you don’t, you are probably not alone – but you should make it a practice to start. I say this because about a year ago I started putting together my family’s monthly budget. As part of that practice, I began reviewing each of our credit card statements to see exactly what we were buying so I could categorize each expense. Don’t get me wrong – I had always reviewed our credit card statements to make sure everything seemed to be in order. However, I never took a detailed view of our expenses. On my first detailed review of our monthly credit card statement – I realized that we were paying $10 every month for some rewards club that I had joined several months before. This was a legitimate expense, but for something I never used and had forgotten about. I immediately canceled the membership to the club and removed that monthly expense. Too bad I hadn’t realized it sooner – it could have saved us over $100!

In today’s tough economic climate, I think it is so important to pay attention to the fine details of your credit card statement, grocery bills, and even your utility bills. A few months ago, we received a higher than normal water bill. I took a look at the information on the monthly statement and assumed that it was legitimate since it was from the city we lived in. Plus, we had been watering outside a little more to bring in some new grass seed. What I didn’t catch was that the water usage for the month was consistent with previous month, but the bill was almost doubled. The city had upgraded to a new software package and had a glitch in sending out the first set of bills. They took care of the problem and notified their customers on the next bill. The important thing is that the information was right in front of me. We had been charged almost double for the bill and I didn’t catch it. I didn’t pay attention to the fine details of the monthly statement.

One area that my wife and I specialize in paying attention to detail is when we are grocery shopping. Cashiers are human and tend to make mistakes. When my wife and I go grocery shopping we have a plan. One of us watches the prices of the products when they are scanned to make sure it comes up at the correct price. The other one pays attention to the cashier to make sure there are no double scans. Once we check out and have paid, we scan the grocery receipt in fine detail to make sure that everything looks accurate. I can’t tell you the number of times we have caught a .50 cent overcharge or double scan at the store. I figure most people don’t care about .50 cents here or there – but overtime that can add up.

The point of these examples is that there are little buckets of money that you could be saving here and there. Sure – an overcharge of .50 cents at the grocery store doesn’t seem like much. But I can tell you that it will happen to you again. Is it worth your time to pay attention to the details on your receipts and monthly statements to save money? I believe that it is. Even if you save $5 every month – it is worth it (to me).

Another benefit of paying attention to the detail of your expenses is that it puts everything you purchased right in front of you. Several months ago, I had a bad habit of buying a 20 oz. Diet Coke for lunch everyday at work for $1. Sure that $1 every day seemed insignificant. But when you look at that charge on our monthly credit card statement – it looks a lot different. When I see that $1 charge come up on my statement 5 days per week and over 20 times per month – it seems a lot different. Simply paying attention to that detail forced me to cut that expense out. I have since saved over $20 per month just by paying attention to detail. I always knew how much it cost making these purchases. I just started seeing it in a different way when I paid attention to the details.

I believe that paying attention to these fine details will also help you address areas of your budget that you can cut. It gives you direction on expenses you can work on eliminating or at least cutting back on. If we spent $1,000 per month on groceries and wanted to cut it to $750 – I can take all of our receipts and lump them together. At that point I can identify certain areas were we can cut back. This approach may not work for everyone as there is added time involved – but it has worked for my family and added up to some significant savings.

How detailed do you get with reviewing your finances?

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Balancing your time vs. Saving Money

John S. — Mon, 09 Aug 2010 11:36:17 +0000

I came across an article the other day in a magazine that shared tips on how to save money on groceries. Most of the tips are ones that my family already practices like using coupons, shopping the weekly deals, making use of triple or double coupons, etc. But there was one tip that I had never heard of in the past that I found very interesting. The article said that when shopping for groceries, you should use the 80/20 rule. Basically, this rule says that you should purchase 80% of your grocery items in their natural state and the other 20% of your products in a prepared form. What does this mean? Examples of prepared items included: prepackaged carrots, shredded lettuce, boneless chicken breasts, etc. The equivalent natural state of those same products would include: whole carrots that need to be cleaned and cut, a head of lettuce, and whole chickens. The article went on to say that there is such a markup on prepared and prepackaged items, that you can save a lot of money by purchasing these products in their natural state.

While I have always understood there was a markup on prepackaged items, I never really thought about the premium charged for them. Look at a recent example of carrots that I priced out at Aldi last week.

1 lb. Baby Carrots – $1.19
2 lbs. Whole Carrots – $.99

Our local Aldi was selling a 1 lb. bag of baby carrots for $1.19. We buy 3 bags of these baby carrots each week. They are convenient, already washed and cut, and are easy to use for snacks and packing lunches. On the flip side, they sell their 2 lbs. bags of whole carrots for $.20 less than 1 lb. bag of prepared carrots. Comparing equivalent weights of both products, we are paying a $.70 premium per pound to have someone else prepare our carrots. If you spread that out over the course of 3 lbs. of carrots per week for 1 month, that is over $8.00 in premium we are paying per month just for carrots!

Unfortunately, buying 80% of your grocery items in a natural state can come at a price. The price you pay for purchasing groceries in their natural state is your time. In my opinion, a person’s time is one of their most valuable resources. I value my free time and enjoy spending it with my two children and wife. Take the carrot example – If it takes me 15 minutes (just an estimation) to clean and cut 3 lbs. of carrots each week, then that is 1 hour spent over the course of one month. That 1 hour spent translates into $8.00 of savings each month. So is my time spent worth $8 per hour? That doesn’t really seem worth it when you look at the numbers.

In the end, I think balancing my time vs. saving money first depends on the amount of money saved. A few weeks ago, I spent $40 to rent an aerator for my lawn which took me 4 hours to complete. It would have cost me over $150 to have a company come in and do the same thing. This was an example of when I felt it was worth spending the 4 hours to save a lot of money. Secondly, I think the choice also depends on what you would be doing with that time instead of using it to save money. If I was using that 15 minutes per week watching television instead of cutting up carrots, I could justify saving the money. On the other hand, if I was spending that extra 15 minutes with my children, then it is not worth saving the money.

My wife and I have actually decided to start buying the 2 lbs. bags of unwashed carrots and spending the time cutting and cleaning them. We are going to do this for the money savings, but also actually enjoy the taste of the carrots over the 1 lb. bag of baby carrots.

How do you balance your time vs. saving money?

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Frugal Pitfalls of Purchasing Health Foods

John S. — Mon, 08 Dec 2008 12:59:42 +0000

photo credit: striaticShopping for grocery items at the health food store can be a little stressful for a family who is frugal. My oldest son has severe food allergies, so we frequent several of the local grocers who specialize in the lines of food he can eat. Incidentally, most of these health food stores carry products that are dairy, egg, and peanut free (among other allergen free products). So every couple weeks, I stop by and pick up some items that he eats. When you purchase these products, you pay a very large premium to ensure they are allergen free, organic, natural, etc. My family purchases these special food items out of necessity, not as a luxury. But I often wonder how other families treat these purchases? My friends, family, and co-workers I talk with prefer to spend the premium on these health food items as they feel the products are better for their body. While I completely agree with them, I also have a difficult time balancing my frugal way of life with paying premiums for these items.

I stopped in at one of these specialty stores this past weekend to pick up a carton of non-dairy soy based butter for my son and some soy mozzarella cheese. I am not really sure if you can even call the soy based cheese product actual “cheese”, but that is how it is labeled. My son enjoys eating pizza and we use this as a topping for him. He has actually never eaten real cheese, so the soy product tastes are what is normal to him. Anyways, my total bill with tax rang up to just over $10! The butter will last him about one month and the soy cheese will be good for two rounds of his dairy free pizza. If I paid a premium on all of our grocery items like I did with the butter and cheese, we would never be able to balance our monthly budget.

While the health food industry has seen a boom in the past decade with stores like Whole Foods, I wouldn’t say that allergen free and natural products have become mainstream yet. Sure, you can find products like Soy Milk at most local grocers these days, but to find most healthy food items you still have to shop at a specialty store. You can also find organic labeled products at a lot of grocery chains but you are still paying a very large premium for these items. There just doesn’t seem to be a frugal way to shop for these products, or at least I have not found one yet. As a result, I decided to put together a list of the frugal pitfalls my family has experienced when purchasing heath food and allergen free food items.

Coupons – While there are some brands that you can find that offer manufacturers coupons, there are very few. Silk Soy Milk is one that comes to mind that offers coupons from time to time. The Silk products are also found in any major supermarket chain which helps to bring down prices a lot. At times you can actually buy Silk products cheaper than you can purchase cow’s milk. I have also seen some coupons for organic products offered by large manufacturer’s. While there are some coupons out there for organic products, there are very few for most allergen free items. Clipping and using coupons is at the heart of every frugal shopper. If you don’t have access to any, it makes it very difficult to purchase these items. I can say that I have looked up and down for coupons for the soy butter we buy for my son and have never found any.
Organic – If my wife and I had the extra money, we would probably always choose a product labeled as organic over one that is not. However, I often wonder how much cleaner and safer an organic product actually is. I think this is especially true with fruits and vegetables. The local news actually ran a story a few weeks back studying organic lettuce against non-organic lettuce for several different producers. They found that the non-organic lettuce was just as safe as the ones that were organic. Basically, the study said that their were no traces of any chemicals on the non-organic lettuce and the products were virtually the same. The only difference was the premium you were paying for the products with the organic label. Now I am not saying this is always the case with organic foods, but I believe it sheds some light on the premiums you are paying at the store. I can also say that my wife will never again purchase organic lettuce after she brought some home from the store and rinsed out a couple hundred small insects from one. She hates bugs (a lot), and after that experience, she prefers to eat lettuce that has no little tiny creatures living in it!
Locations – As I mentioned earlier, I always have to shop at specialty stores to get products for my son. That means that I normally have to drive further to make these purchases, and the competition for some of these stores is scarce. That means they can charge a premium for their products because of supply and demand.
Seasonal – A lot of organic fruits and vegetables tend to be seasonal because of a reliance on local farmers. For example, you couldn’t find too many organic tomatoes grown in the Midwest during January. Since I like to eat tomatoes year round, I would basically need to rely on purchasing organic tomatoes shipped in from Florida or California. I would think that the prices would definitely be higher on organic fruits and vegetables when they are out of season in your local area.

I can understand why a lot of the products my family purchases for our son come at a premium. It costs more money for the manufacturer to ensure a product is allergen free. But even more significant (I think) is that they also need to ensure that it is produced in an allergen free facility. That means that when a product is produced, the equipment and facility cannot contain any of the harmful allergens. This is especially important to people who have severe peanut allergies. To some, even touching an item with peanut residue could kill them. Fortunately my son’s peanut allergies are very minor compared to most and we have to worry more about dairy products.

I can also understand why most organic food items require a premium price as well. Instead of relying on chemicals and sprays to keep the products pest free, you need to pay people to do the same work. In addition, an organic farmer risks more crop loss than one who uses chemicals. All of these factors have a direct result on the price you are paying at the store.

I have written other posts that debate frugal living vs. some other factor. This is just one more debate that my wife and I go through every day. While there are some products we purchase for our oldest out of necessity because of his food allergies, we don’t always purchase organic or other healthy labeled food items because of the premiums. In the end, we basically debate each item one on one. We would love to buy all organic products for our two boys, but at what point are you actually benefiting from these purchases?

How do you handle purchasing healthy items at a premium? Do you prefer to save money or spend more to feel safer?

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