Deplete your Food Inventory to Save money

Introduction

It may seem unusual to start this post talking about boots and shoes, but I'm a "road walker" and I went through a period of buying shoes expecting them to last a few hundred miles. Now I have four pairs of leather boots and three pairs of running or hiking shoes. The total cost including tax is about $1,100. The good news is, one pair of boots is coming up on 3,000 miles with no sign of wear on the soles, and I have another pair just like it. Another pair of boots has almost 1,000 miles on it with no sign of wear at all. Maybe I should have written this post about shoes, but the key point is I have about $1,100 tied up in shoes. Probably enough for at least 12,000 miles of walking. (My secret is I use Gorilla tape on the soles of leather boots to keep them from wearing out.)

Inventory costs money

Instead of so many shoes, I should have saved the money to buy shirts, socks and pants. There were times I had to replace these when I was a little short on cash. Oh, I used to always be short on cash, but not since I learned how to budget well.


I first learned that inventory costs money from Eliyahu Goldratt who wrote the book, "Isn't it Obvious?" along with about seven other books. In this book, a retail store's storeroom was flooded and they had to order replacement items from the warehouse as they sold them. Surprisingly, their profits increased about 20% in just the first month. This was partially because they only ordered items as they sold to keep a 20 day inventory of each item in the store. The same theory works if a person only buys food they know they will eat during the next day.

Take a look into the recesses of your freezer and pantry and find the items that you would no longer eat. Toss them, while keeping a mental tally of the cost of those foods. How did they get there?  In my case it was either losing interest in something I bought in bulk or poor rotation of the foods.

Taking the Food Stamp Challenge

In a way, food stamp challenges do not mimic real life because they often start with a big shopping order to buy items like oatmeal, rice, potatoes, etc. This doesn't happen in real life, so the contestant starts out with a deficit. In real life, a person could eat from inventory as long as possible and then start shopping. This would build a cash reserve to make the end of the month less stressful.

Advantages of shopping every day

When I shop every day, I only buy what I'm going to eat that day or bulk items that are almost gone. This means I throw almost no food in the trash. Granted, I miss stocking up on some sale items, but then I have money to buy other sale items, so it all works out. I may miss the price advantage of buying a 10 pound bag of potatoes instead of a 5 pound bag of potatoes, but I always eat the full 5 pound bag of potatoes and I don't get roots growing out the bottom of my pantry door. Bananas don't get black, bread doesn't get stale, and I don't have any biological hazards in my refrigerator.

Shopping everyday allows us to change the next day's menu without worrying about wasting food. 

What about emergencies?

Unless a person lives in an isolated area, there is seldom a food emergency that lasts more than three days. Rice and oatmeal can last that long.

Conclusion

 In my case, I've found shopping every day means almost no wasted food. The exception is spaghetti sauce where I usually don't use all of the jar. I estimate it saves about 20% on my food bill. This is essentially free food for me.

Avoid the Expensive Convenience Food Fat Trap

Introduction

A friend recommended Michael Angelo's Eggplant Parmesan to me yesterday. I decided to analyze the food and see if it met the criteria for a frugal budgeter.

Cost

The first criteria for a frugal budgeter is the cost. This container is $7.47 at our local Walmart. There are six serving per box with 250 calories per serving.

To estimate the cost in your head, determine how many calories are in the box. Six servings at 250 calories per serving is 1,500 calories. To find the cost per 2,000 calories divide 2,000 by 1,500 and multiply it by the price. The cost is $9.96/2000 calories. I would automatically exclude this item as it is higher than my $5.00 budget/2000 calories.

Fat Content

The nutrition label format is dictated by the government, but it is still deceiving. Notice how it says "Total Fat 15 g     24%". This might lead some to think the dish is only 24% fat. Not true. This is a percentage of the daily requirement for a 2,000 calorie diet.

However, in the line above, it says 140 of the 250 calories are from fat. Few people will do the math, but the dividing 140 by 250 shows the dish is 56% fat! This is higher than most meat sandwiches at McDonald's.

If I'm going to eat Eggplant Parmesan, I'd like to have some garlic bread with it. Let's say I'm conservative and have only two slices with one pat of butter  on each slice. This adds about 170 calories for the bread and 72 calories for the butter. Now the meal is up to 492 calories. Not a bad number yet, but let's analyze the fat content.

There is about one gram of fat in the bread I would buy for garlic bread and 8 grams of fat in two pats of butter. The total fat is 15 grams from the eggplant Parmesan, one gram from the bread and 8 from the butter, or 24 grams.

To determine the number of calories in 24 grams of fat, multiply it by 9. This meal has 216 calories of fat out of 492 calories. It is 44% FAT!!!! Most value meals from McDonald's do better than this.

Don't worry though. It's almost all saturated fats. You know, the kind that gives people heart attacks.

A real meal

The picture on the box shows the meal covering the whole plate. This probably equates to four servings from the package. Let's say a person only eats three servings which would be normal for many. They also eat two extra slices of garlic bread because it tastes so good. Then the meal is up to about 1,300 calories, the same as a large McDonald's Cheeseburger value meal.

Don't forget the wine

At least the wine brings down the percentage of fat. Add about 100 calories per glass.

Conclusion

In general, convenience foods taste somewhat good, cost too much, and have enough fat to kill a person over time. 

 

A Perfect Diet

Introduction

What is the perfect diet? After a few minutes of brainstorming, I created this list.

1. Does not cause disease.
2. Cures many diseases.
3. High energy.
4. Easy to follow.
5. Easy to prepare
6. Weight control.
7. Research supports health claims.
8. Long and healthy life.
9. Affordable.

I've been studying diets for many years, and there is only one diet that meets all these criteria. This is a starch based diet with the addition of fruits and vegetables and no added fats. The research is thousands of years old, and disciplined published research is over one hundred years old.

A starched based diet builds meals around foods like potatoes, rice, beans, grains, sweet potatoes, corn and other starches. These starches should cover approximately half the plate and the fruits and vegetables should cover the other half.

There are no meat or dairy products in this diet. There are also no added vegetable oils.

Affordable? This dish cost eighty-four cents and has 454 calories. It is easy to eat 2,000 calories of healthy food a day for under $5.00.

You are betting your life

Everyone is literally betting their lives on their diet. Ninety-five percent of all diseases are in reality conditions caused by the person's diet. It is worth an enormous amount of your time to investigate and find the healthiest diet available.


Do you want to avoid doctor's offices? Do you want to avoid most of the sicknesses people think come with age?  Sickness and disease does not come with age. It mostly comes from what we eat! 

I've been mostly vegetarian and then vegan since 1993. I haven't been sick a single time. I'm 62 years old and physically active. I don't have any aches and pains. I've not been to a doctor the entire time. I'm at a normal weight for my height.



Should you believe me?

I'm not a doctor, nurse, or nutritionist, and I don't have a medical background. I did watch Dr. Kildare, Medical Center, Dr. Marcus Welby, and Grey's Anatomy. Of course you shouldn't believe me. I've chosen follow Dr. McDougall who has studied healthy foods for almost a half century.

The Starch Solution

Dr. McDougall did not invent the starch solution; he discovered it by observation and by talking to other experts. If you are the type who likes to read all the supporting studies, I recommend The Starch Solution by Dr. McDougall. If you prefer to watch videos, you can watch about 12 hours of videos here on YouTube. If you prefer to read articles online, you can find his archive of articles here. If you like to participate in forums, you can participate in his forums.

Whichever way you choose to do your research, Dr. McDougall provides all the information you need to refute other forms of eating.

Conclusion

Dieting is a hot button issue as there is so much false advertising. To live a healthy life we must dig through all the rubbish to get to the truth. It's worth spending a long time doing this. In the end, we must each make our own decisions, so I don't debate the issue except to refer people to Dr. McDougall. 







 

Free Menu Planning Spreadsheet

Introduction

Using this spreadsheet will require at least some previous knowledge of spreadsheets. You can download the spreadsheet by clicking on "Menu Planner Spreadsheet" in the top of the right column.

Spreadsheets are a powerful tool for testing different menus to see which ones are the least expensive and yet healthy. Fortunately, the two go together. A healthy diet is less expensive than an unhealthy diet. I'll add more about this in a future post.

Entering data

You will have to enter data for the foods you eat. This includes the food name, cost, serving size, number of servings in the container, grams of carbs, fats and proteins. The spreadsheet does the rest of the work for you. Once you have a list of the foods you generally eat, creating menus takes about ten minutes. I do it while we watch Netflix in the evening.

Frugal diet

Those who must control their food costs will be forced towards a starch based diet with the addition of fruits and vegetables and an optional serving of nuts a day. Meat and dairy products will quickly drive the cost higher.

This was my second breakfast this morning. I had about six inches of a baguette with a small amount of margarine early in the morning.

Cooking tip: Buy bulk oats at a store like Vitamin Cottage Natural foods. They are about $2.62 for two pounds. A serving is 1/4 cup. Add 3/4 cups of water and put in a small covered pot. Heat for 35 minutes between low and medium low heat

Cooking on higher heat for less time increases the amount of non-soluble carbohydrates which is good for people with constipation issues.

This is my menu for today. The serving sizes are generally in grams. Sometimes they are single numbers such as with the bagels and beans. (The beans are just weird and I'll change it to grams another time.)

The money savers are oats, potatoes, and rice. It pays to make one of these the foundation for each main meal.

Beans are good sources of carbs and protein. Try to buy brands with zero fat. I use canned beans as I don't know how to cook dry beans. If I used dry beans, they would also be a money saver.

I add frozen vegetables to lunch and supper. For fresh vegetables, they should be less than about $1.00/lb and all parts should be eatable. Cabbage is often a good buy. If you do use fresh vegetables, be certain not to waste any or it gets expensive.

Is $4.14 realistic?

No. It may be for an inactive small person with calorie requirements around 1,600 a day who doesn't ever waste a single scrap of food and never has an unstoppable craving to eat more than usual on some days.

I'd like to take some people who claim $4.14 a day is realistic and lock them up in a compound and survive only that amount for a year with no opportunity to escape. Maybe I'll write a book about this one day. :)

(My day job is writing eBooks for Amazon.)

Still, it is possible for many people to eat for less than $5.00 a day. A weekly trip to a food bank can make up the difference. One day, I'll have to visit one to see what types of items are available.

No convenience foods

It's tempting to buy a cup of soup for lunch, but the cost per calorie is too high and it will cause you to go over budget. The same is true for all convenience foods. Except for bread, you will pay significantly more for processing.

Cooking tip for rice: A serving of rice is 1/4 cup. Put the rice in a small covered pot with 1/2 cup of water. Heat on high until it starts boiling. Then reduce heat to low. The water should continue to boil. Boil for 35 minutes without stirring. Check after 25 minutes.

Learn to enjoy cooking

Most things I cook take little active preparation time. While they are cooking, I do other things like post blogs on the internet. Sometimes I even clean house.

Conclusion

This spreadsheet can save significant amounts of money for you. If you can't figure out how to use it, see if you have a friend who understands spreadsheets. Leave a message in the comments if you have questions.    
  




 

Calories count, so Count Calories

Introduction

In general, people gain weight if they eat more calories than they burn and they lose weight if they eat fewer calories than they burn. Some people have faster or slower metabolisms, but I'll wager most fast metabolisms are caused by exercise and most slow metabolisms are caused by a lack of exercise. Regardless of the differences in efficiencies, if people want their weight to go in their desired direction, they will have to pay attention to calories. 

How many calories do we need?

The number of calories we need to eat in a day can be separated into two numbers. Base metabolism and exercise calories. In order to reach their weight goals and nutrition goals, a person will have to estimate both numbers.

Base Metabolism
I prefer this calculator from the Mayo Clinic. When entering data, use sedentary so it only calculates your base metabolism requirement. When I'm trying to lose weight, I set this as my target for daily calories.

Exercise calories
People are bad about estimating the amount of exercise they get during the day outside of planned exercise. Every step burns calories and people tend to overestimate the number of steps they take.

I recommend getting a pedometer to count these calories. There are many inexpensive pedometers available.

Some pedometers count only the exercise calories and others include base metabolism calories in the exercise. You will have to read the directions.

I use a Fitbit Zip pedometer to measure my exercise since it's all walking. It gives an accurate accounting of the total calories burned in a day. I know this as my weight loss closely parallels my expected weight loss.

Tracking Calories
For me, planning my calories before I eat them is the most successful. I use a spreadsheet for this task. It also includes the cost. Tomorrow I'll make the spreadsheet available. Look for Menu Spreadsheet in the top right corner of the blog.

Sure, tracking calories takes time, but it becomes quicker with time. There are some apps that can help like www.caloriecount.com, but I've found they take too long for my tastes.

Diet
I'm on a starch based vegan diet taught by Dr. McDougall. I'll have more information on this tomorrow. However, I'm not trying to change anyone's mind about their diet. I will say my diet is inexpensive and proven to be healthy. If someone can get the same benefits from a different menu on a food stamp budget, I'd be interested in seeing the exact calculations.

Conclusion
Counting calories takes time and it's best spent during menu planning time. Calorie counting is the only way I've been able to control both weight and costs.

Breakfast

In addition to this plate full of food, breakfast included a large bowl of oatmeal. There are two steamed potatoes and some onion and peppers.

Cost: $1.00
Calories: 568
Cost/2000 calories: $3.52

Cooking Tip: Dice and then steam the potatoes for 20 minutes. Then add the peppers and onions and steam for another five minutes.

One fried potato would have the same number of calories and slightly less cost. I'd rather have a second potato than the oil.

SUPPER

Cost: $1.51
Calories: 613
Cost/2000 calories: $4.92

This meal is a little expensive for a food stamp diet, but it worked when I balanced it with less expensive foods during the rest of the day.

Notice how small the meal looks, but it was satisfying. To avoid eating too much, I meticulously weighed or measured the ingredients.

(Note: This would have been healthier by having more pasta and eliminating the margarine.)

Cooking tip: Measure the sauce. This is only a half cup. Cook in a small pan instead of a pot.

Poor Eating is Good Eating

Introduction
Many people think because they can't spend much money on food, they can't eat good. Maybe they have a mental image of eating Ramon Noodles every night and always starving. I've found that by spending less money on food that my diet is healthier, and I'm seldom hungry except for normal hunger. I haven't broken the code on living on $4.14 a month yet. This is the average amount a person on food stamps gets in Colorado. However, I've found it's easy to spend less than $5.00 a day. I burn about 2,700 calories a day, but eat 2,100 calories. Eating for $5.00/day is not sustainable for the long term as I'm gradually losing weight.

Processed food costs more and is less healthy
I don't think I need to support this statement too much, but from looking in people's shopping carts I can see many people don't know or don't care.

The further a food is from its natural state, the more unhealthy ingredients are added and the more the cost goes up. The same goes for convenience foods such as frozen pizza and frozen dinners. A person trying to minimize their food budget will have to stay away from these. The same is true for fast food.

The good news is the person on a tight food budget will fare the best if they learn to eat healthy inexpensive foods and add a mix of fruits and vegetables that are more expensive. In fact, I believe that people who learn to live on low cost food will eat healthier than most rich people.

Ranked by Cost/2000 calories
I'm still building this list which ranks foods by their cost/2000 calories. It's mostly healthy foods, but I did throw in a value meal and a convenience pizza for comparison.

The first general grouping is rice, potatoes, bread, oatmeal, noodles and chips bought in big bags when on sale.

The chips were a surprise to me, but the cost/calorie is low. If eaten in small quantities they are not unhealthy. By chips, I mean basic potato chips, corn chips, tortilla chips, etc.

Nuts can be a valuable addition to the diet, but only if bought in bulk and in an inexpensive form. Vitamin Cottage Natural Foods has a pound of peanuts for $2.62. They are more expensive at the box stores. Call them beer nuts and the price skyrockets.

Peanuts are preferable to peanut butter as they are about 2/3 the cost and not processed.

Fruits and vegetables
Ask most anyone how to reduce food costs and they will say to eat more fruits and vegetables. I think of fruits and vegetables as vitamin pills and not as calorie sources. They add nutrients, but few calories. I'm careful to use the suggested serving size. For vegetables, I eat mostly frozen. Fruits are mostly bananas, grapes and apples bought on sale.

Beans
I eat a lot of canned beans as I don't know how to make good beans from scratch. If anyone has a great recipe, please leave it in the comments.

Vegan diet
I'm vegan for ethical reasons. I'm also vegan because it is  less expensive. It is possible to eat small amounts of meat and reach the cost goal. It's also possible to eat dairy. These are outside of my food universe, so I don't have any items listed.

Non-Organic and GMO Foods
In my opinion, most health problems are caused by poor food choices instead of non-organic food choices. If a person on a high sugar diet develops type 2 diabetes or a person on a high fat diet develops heart problems, it's more about the basic food rather than if it was organic or non-organic.

If a person needs to limit their food budget to food stamp levels, they won't be able to make the organic choice.

Is it healthy?
For that, we need an unbiased rating source. I use www.caloriecount.com. Anytime I post a menu it has an "A" rating.

Leftovers
I asked a friend how he eats on $84 a month. He said he eats everything but the squeal. No food goes to waste. This is why you will find chips and bread in strange places on my menus. If they aren't eaten, the actual cost/day will exceed the calculated cost.

Weigh or Measure your Food
In general, I use the serving size on the packages. If I need more calories in a meal, I usually add another item instead of increasing the serving size.

Menu Planning
I use a spreadsheet I wrote to help with menu planning. It's not bug free yet, so I can't share it. I will at some time in the future. Unfortunately, I can't find a program online that includes costs, calories and health benefits so I'm writing my own.

Each evening, my son and I decide what's for supper the next day. We eat differently the rest of the day. I enjoy walking, so each morning I walk four miles round trip to King Souper's to buy the food for the day. Usually, the bill is less than $10. If it's more, it's because I'm buying some bulk item that will last several days.

Today's Menu

LUNCH

Cost: $0.92
Calories: 556

(Including a serving of Mission Tortilla Strips which are not shown.)

Cooking hint: Dice the potatoes into small pieces and steam for about 20 minutes. Leave the skin on. It's paid for, so you may as well eat it.

This is my menu for today. The cost is $4.08 for 2,100 calories. It's only $3.89 for a person on a 2,000 calorie diet.

The left column has the serving size in grams or in cases like a banana it's listed as "1." Then there is the item name, cost and calories. (If an item is listed twice, it means I had two servings.)

Notice there is a fruit at each meal. It's a little light on vegetables, so I'll probably add a salad at supper for about 50 cents. If I don't, I'll have more vegetables tomorrow.

My menus generally have about 75% carbs, 12% fat and 13% protein. This one has 77% carbs, 10% fat and 13% protein.

Conclusion
This is controversial. The Mayo Clinic says we can eat a healthy diet for $5.00 a day. When I first read this it made me mad because I've seen people eat in hospital cafeterias. However, I've found it truly is possible even with inflation. For some reason, the low cost healthy foods haven't experienced much inflation.

To achieve this goal a person needs scientific menu planning at a level most people can't do in their head. It also takes time which many people don't have.

Finally, it takes realizing a menu plan is composed of many small decisions each day and a slight cost advantage on each decision results in big savings.

Please express your pleasure or displeasure in the comments. There are certainly things I haven't thought of. Besides, politely discussing issues is a good way to learn.

 

 

 

 

Why you must know your Food's Cost/2,000 Calories

Introduction

If you don't know the cost/2000 calories you will not be able to eat a healthy diet for under $5.00 a day. ($9.00/day for organic eaters.) Is this even possible? Yes, and not by following general advice to eat more fruits and vegetables or more rice and beans. To efficiently attain a goal, a person needs a plan. The plan is to eat more of the foods that cost less/2000 calories and less of the food that cost more/2000 calories. For that, we need a list of the foods we eat. This list will be the first step in frugal menu planning.

 

Create a Food List

I've been working on a list as I buy foods. A person's actual list would have many more items.

 Focus on the first and last columns. The first has the food item and the last has the cost/2000 calories. The goal is to eat from the top of the list and add vegetables and fruits from the middle and bottom of the list.

You can get this spreadsheet from the link at the top of the right column. Click on the grocery tab. Enter food item and the data in the green columns. Use a serving size equal to the serving size on the package. When you plan a menu, you may change the serving size. This will give you the cost and calories for your actual serving.

Let's look at today's menu:

The day started with a large serving of potatoes O'Brian and a slice of bread. Breakfast cost $0.68 and had 458 calories.






I had a banana for a mid-mid morning snack. The banana cost $0.24 and had 80 calories.



Lunch is rice and vegetables. It will cost $0.75 and have 250 calories.



Afternoon snack is a tomato sandwich and potato chips.




 Supper is Shepherd's pie and homemade bread. Cost is $1.89 and it has 599 calories.




Optional snack is bread and peanuts. Cost $0.37 and 300 calories for $0.37.

Grand Total: $4.54 for 2,057 calories.



I'm not suggesting you eat as I do. In a later post, I'll introduce you to the menu planning tab on the spreadsheet so you can plan meals that meet your budget and calorie goals.

 

Create your own Food List

The easiest way to create your own list is to spend an hour or two where you shop. Write down the name of the item, the cost, number of servings and calories per serving for each item for everything you buy or would consider buying.

Some stores will ask you to leave if they catch you doing this as competitors sometimes send spies to compare prices. Every so often, add something to your shopping cart to avoid attracting too much attention.

When you get home, enter the data in the spreadsheet. Overwrite my data as there are formulas in some cells that shouldn't be erased. When you need more lines, copy the last line to the line below and overwrite the data.

When you are done, save the file and then sort the spreadsheet by price. Select the whole table including the headings. Click Data, Sort, cost/2000 calories.

Conclusion

This is the first step in Frugal menu planning. In the next post we will start to make menus and a daily meal plan. This is time consuming initially, but it becomes easier with practice.
 

Spreadsheet - Tracking Bank Account Balances

(Note: This blog is intended to be read from the first post to the last post. You can find the first post here.)
 

 Introduction

The  instructions for the expenses portion of the spreadsheet are in the previous post. This portion will explain using the spreadsheet to track bank account balances. It will track up to four accounts.

 

Spreadsheet

The program will track balances for up to four accounts. It's only as accurate as the data entered, so check your account balances carefully.

1. At the beginning of the month, enter the end of month balances for all your accounts in the dark green cells. Be sure to adjust the balances for any outstanding checks.
2. Rollovers are the amount from each account you plan to spend each month.
3. Follow the example for deposits and withdrawals. If transferring money from one account to another, enter a withdrawal and a deposit. Withdrawals must be entered as a negative amount.
   
   When making a deposit or withdrawal enter the bank account number in the Act column.
   
   Note: Deposits and withdrawals will be added or subtracted from the starting balance.
4. Enter your expected paychecks for the month. When they are actually received put the account number in the right column.

When you spend money during the month, enter the account number in the blue act column.

 Summary

After you complete the expenses section and the bank account section, the summary box in the upper left hand corner of the spreadsheet will have the income/deposits, planned expenses, the surplus/deficit, additions to savings envelopes and the total surplus/deficit. You do not need to make any entries in this section.

 

Conclusion

This completes the instructions for the budgeting tab of the spreadsheet.  So far, everything in the spreadsheet seems to be working properly. If you have any questions or find any errors, please email me at gershon_ben_franja@yahoo.com. Put Frugal Budgeter in the subject so I know the email isn't spam.

 

Free Spreadsheet

(Note: This blog is intended to be read from the first post to the last post. You can find the first post here.)
 

Introduction

You can get the free spreadsheet by clicking  here. There is no charge or email signup list. The spreadsheet is designed for use on a big screen about 11 inches or higher in size. It's not designed for handheld devices or tablets although it may work on some.

Getting Started

So far, I've only explained the expenses (left side) portion of the spreadsheet. I'll be adding additional instructions later. You will be able to find links to the instructions on the spread sheet page. (Link is on top of right column.)

Spreadsheets can be frustrating

A spreadsheet can be easy to use for the designer, but difficult for the user. I can't give step by step personalized instructions, but I will answer quick questions. You can contact me at gershon_ben_franja@yahoo.com. Please put Frugal Budgeter in the subject line. Sometimes I leave home for a few days, so be patient. Oh, let me know if you like it, too. I do dances around my desk when I make someone happy.

Don't work ahead of the instructions

Some entries on the right side of the spreadsheet require additional instructions.

 Conclusion

Take your time and try to have fun! It will be worth it in the end.

 

List your Expenses

(Note: This blog is intended to be read from the first post to the last post. You can find the first post here.) 

Introduction

When I tackle a complex problem, I choose one activity as a point of expansion and work outward from that point. The action starts to solve the problem and detonates more ideas about how to solve the problem. If it's a logical challenge like budgeting, I make a spreadsheet to track the activities. The end goal in the next series of posts is to help you gather data which will be entered in the spreadsheet. Tomorrow, I'll provide a link to the spreadsheet.

Let's start with listing all your expected monthly expenses, and I do mean all of them. This is uncomfortable for most people as listing the expenses will reveal areas that can be improved. Try to do it without judgement. Once you have listed the expenses, you will start discovering new monthly expenses. Add these to your list.

Expense Categories

The spreadsheet allows for eight spending categories. Two of these are mandatory: Food and Savings. The others are optional and you can combine categories or change them. Here are the categories I used.

1. Food

I include all food expenses in this category including eating out. This category is difficult to plan individual expenses, but a person can set a monthly limit on expenses. For now, set a daily food budget and try to stick to it. My budget is $10.00 a day per person which is sufficient to eat well every day. The number isn't as important as having a number to help control spending urges during the month.

These are my expenses for the first 10 days of this month. I shop for groceries almost every day because it prevents waste.

My monthly budget is $630  for two people, or $10/day for one person. (If you work in other currencies, the spreadsheet will work in other currencies.)

Your action step is to start making a log of every food expense you make. Initially, you can use a piece of paper to get in the habit. I like to save all my receipts until I can get home and enter the data in the spreadsheet.

 The blue column designates which account the money comes from. The program will balance your bank accounts if you enter the data properly, but check your balance frequently. You will learn to use this column later after the planning phase is completed.

2. Utilities

This category is for obvious utilities and you can also add any recurring subscription services such as Kindle Unlimited, Internet subscriptions, etc. When you enter the item and the amount, it will increase the spent amount. After you have entered all your expected utility bills, enter the red number in the spent cell into the Budget cell. When the bill is actually paid, enter the account number in the blue cell.

If your utilities have a budget plan, I recommend using the budget plan or at least paying ahead during low cost months so your account has a credit balance when the big bills come. The concept here is to smooth your budget so it is the same each month.

3. Rent or Mortgage

Insert your rent/mortgage payment and any home equity loans you may have.

 

 

 4. Household Supplies

 

Household supplies aren't expensive in the sense that they are a big percentage of the budget. However, if a couple of the larger expenses occur at the end of a pay period, they can lead to using a credit card.

Take a mental walk around your house and list everything you buy that can be considered a household supply. Then put a price next to the ones you plan to buy during the next month. When you actually buy something, insert the price as a comment so you have a reference for next time.

The total will appear in the Spent cell. Enter this amount in the yellow budget cell. This is a good place to add a little extra for things you didn't think of.

When you go to the checkout counter, put the household supplies at the end and note the subtotal before the cashier starts ringing them up. This will make it easier to log the cost. Don't forget to add the tax.

Enter the account number in the blue cells when you actually spend the money.

 

 5. Loan Payments

List all loans other than car payments. Car payments will go under transportation.

Budget as much extra as possible for credit card debt.

Be careful about budgeting extra on other types of loans as they may apply it to a future payment instead of to principal.

6. Savings/Envelopes

Many people end up using their credit cards for infrequent expenses. A better way is to start saving for them before they occur. It's an expensive category, so do what you can and cross your fingers for the rest.

Some situation will eventually threaten financial disaster if there is not an emergency fund. Lost jobs, long illnesses, car repairs, and computer breakdowns are all examples of unexpected expenses that often cause a person to go into debt. If a person can afford the credit card payment after the event, why can't they afford to save before the event. If it's not possible, do the best you can. If it is possible, don't wish you had saved before the event occurred.

Some bills come once a quarter or once a year. Others come several years apart. The idea is to plan a monthly payment that will reach your goals. Put this money in a separate bank account and transfer it when you need it.

 For example, this month, I funded only a few of the items so far. At the end of the month, I'll fund my Emergency payment if possible.

Tracking the cash reserve account is not yet a part of the spreadsheet, so it will have to be done manually. Resist the temptation to dip into this account for wants.

7. Transportation

Cars are more expensive than many people think. Some expenses are foreseeable, and others aren't. This month, I have car registration, so it's more expensive. I don't have a car loan, but sometime, I'll have to start saving for my next car.

I like to buy gas $10.00 at a time as it makes it easier to budget. Enter the account number in the blue column when you actually pay the expense.

For a person in financial difficulties, they should seriously consider not owning a car. This creates its own problems, but sometimes there is no other choice.

8. Other

Everything that didn't fit well into another category goes in this category. The bold print items are those that occur every month. The others are unplanned expenses during the month. If you exceed your budget, then increase the value in the yellow cell so it will help plan future months.

Notice, I have an expensive book budget. I have Kindle Unlimited and plan for four books a month costing $9.99. If I pay less, I enter the actual value.

Again, insert the account number as the expense is made.

 

Conclusion

This step is a ton of work if you do it conscientiously. It can take a few hours if done all at once, or it can be spread over several days. In the next post, I'll provide a link to a spreadsheet so you can get started with the serious work. Don't worry, once you have done the spreadsheet for a week or two, it only takes a few minutes a day to update it.

 

 

What is Frugal Budgeting?

(Note: This blog is intended to be read from the first post to the last post. You can find the first post here.)

Introduction

If you want to spend your money as wisely as possible, you will need a budget. The Merriam-Webster dictionary defines a budget as  "a plan used to decide the amount of money that can be spent and how it will be spent." A budget will put you in control of your money instead of letting it control you. Frugal Budgeting emphasizes paying for needs first and minimizing wants so you don't run out of money at the end of the month.

 

What is a budget?

In its simplest form a budget is a list of all the ways you will spend your money during the month. Initially, it's easiest to start with a  one month plan and gradually expand it to a one year plan and even further for some.

In my opinion, a budget is more than a plan that is made at the beginning of the month. It should be something that tracks how well the plan is being followed. This will mean tracking every dollar spent during the month and as much as possible only spend according to the plan.

Why should you have a budget?

Managing your money without a budget is like trying to drive your car without your hands on the steering wheel. In one month of budgeting, I went from being short of money at the end of the month to having $832.45 left at the end of the month. 

What is different about a "Frugal Budget?" 

In my opinion, most people who read this blog will be close to living paycheck to paycheck. Therefore, this budget is needs centered.  By planning for expenses that are absolutely necessary, it will free up money for a few well-chosen wants each month. It will also help plan for future needs.

After only a couple of months, the frugal budget will be in control of their finances if it is possible for their situation. There should even be rapid improvement during the first month.

Conclusion

This blog is meant to be read from the first post to the last post. Initially, it will focus on my Frugal Budgeting spreadsheet which will come free in the book I'm writing now. It will likely be released in mid-August 2015. Until then, I'll include general information you can use now. 

I'll be assigning many tasks to complete along the way because that's the way I teach. This doesn't mean I believe my way is the only right way, but it is a way that will work.