I did something I never did before. I calculated my monthly Food and Supply expenses and savings right down to the penny. This was enlightening. I saved all my receipts for the month of August. I typically go shopping once a week normally on Sunday morning and purchase all my food for the week. Supplies I usually get as needed and they usually last for the month or longer. I wanted to get a better gauge on just how much I typically spend on food and supplies each month now that I am living on my own.
I did not do this in July as I was still “moving in” to my new place and getting most of the “startup” costs out of the way. So August was really the first month I was able to get into a kind of spending rhythm. Assuming I stay consistent, this gives me an idea of how much I will spend on food and supplies each month. I have also adopted a spending strategy on food for the week. I tend to buy food items only when they are on sale. It is a strategy I picked up from my mother who mastered the art of saving money on food by buying on sale. I remember even the cashiers ringing up the totals were impressed by the amount she saved.
Anyway, I am trying my best to follow that strategy myself and I have seen the positive results of that on my receipts. For example on the second week of August I saved 22% on my week’s food expense. I spent $41.59 for food to last that week, saving $11.92 by buying items on sale. This is where convenience plays an important role. The location I am living in is very convenient. I am surrounded by food stores. If one place does not have an item on sale another store usually does. Therefore I shop around a 5 block radius which I walk to different stores (usually 2-3) to purchase food at the best prices.
I do the same thing with purchasing supplies for the month. It doesn’t take that long at all. Some weeks though are better than others. For example, the third week of August was my most expensive week in purchasing food as there were not many sales across various stores. I ended up spending $59.98 on food for that week. However, my savings on food for that week amounted to $14.70 (a 19.6% savings rate). So I am spending $40 to $60 per week on food (around $50 tends to be an average).
Could I cut that down further? Probably. I could go the ramen noodle route every day and save some serious cash, but that is not something I would enjoy doing. I don’t see myself subjecting myself to that, so I am trying the alternate route of buying food items on sale whenever I can and saving that way. The past two months I have managed to keep expenses low enough that only one of my two paychecks each month fully covers all my expenses. I am able to save the other paycheck for investments.
So my August total for Food Expenses were $211.01 for that month. I saved $44.75 by buying food items on sale resulting in a 17.46% savings rate. My supply expenses where different as these were items I needed for cleaning, hygiene, and such. Some of which were one-time expenses (I hope). My August total for Supply Expenses was $49.34 and I managed to save $3.79. It was a small 7.1% savings, but I will take it nonetheless.
So the complete August grand total for Food and Supply expenses was $260.35. The grand total for August savings was $48.54 resulting in a 15.71% savings rate for food and supplies for the month! Not bad for my first month adopting the buying on sale strategy. If I had paid full purchase price I would have spent $308.89 for the month as opposed to $260.35. Saving nearly $50 sounds good to me. Here is the breakdown:
Food Total: $211.01
Food Saving: $44.75
Supplies Total: $49.34
Supplies Saving: $3.79
Grand Total Expenses: $260.35
Grand Total Savings: $48.54
What does this mean in relation to my dividends? Well, I am happy to say that, at $260 per month for food and supplies, my passive income stream would completely cover these expenses with cash to spare! Even on my “off” month where I receive the lowest amount of dividends at $377.44 in passive income, this would more than cover my monthly food and supply expenses! That is awesome!
So how about you guys? Do you budget your food and supplies each month? Found any good ways to save?