Saturday, August 25, 2012
Mama Masha's Kitchen - Shop smarter, not harder
This is going to be a little bit backward. We have talked already, what to do with food, once it hits your kitchen. Now we are going to talk about getting it there. Many of my friends are on a tight budget these days. Some lost their jobs, some had unexpected home repairs, some – health problems. In many cases, there is hardly anything left in the bank, after all the mandatory bills are paid. Which brings us to two essential questions: 1) Do you include your groceries when you calculate the upcoming bills for the month? 2) How often and how do you shop? Let's face it, we all have to eat. There are no if's or but's about it. So, to answer the first question, if you are not currently including your groceries into the upcoming expenses, you really should. Keeping a good record of all your expenses is helpful anyway. If by the end of the month you find yourself having anxiety attacks over how to feed your family before the next paycheck or unemployment check comes in, that is a very strong signal to you to start getting a handle on your budget. Before the beginning of the next month, do the following: 1) Set up either a handwritten or an electronic ledger. I have one in Excel format, and it includes one tab with all my transaction information: the date, who it was due, the amount, the balance after the transaction and the category (food, utilities, mortgage, etc.) It's a slightly more comprehensive version of the transaction registry you get from the bank when you order your checks. 2) Record your income (after taxes) as a positive number. If you are the person in charge of the family accounting, but both you and your spouse contribute to the expenses, include both contributions. 3) Record your upcoming bills for the month as negative numbers – you should know those amounts pretty well by now from the statements you get from your service providers. Include groceries – it's ok if you err on the side of too much. Once you are done, your ledger for the month should look something like this.