Author Archives: Daniel Packer

How Much The Average Household Spends on Food

How Much The Average Household Spends on FoodI am a frequent user of Mint.com. I don’t use a strict budget, but I do have a general idea of how much we spend on each category monthly and if I see things are trending in the wrong direction, Lauren and I will discuss whether it’s temporary or permanent. I don’t hate the idea of lifestyle inflation and I know our expenses will increase over time, but I do like to keep them in check whenever possible.

I Think We Spend Too Much Money on Food

One of the things I always keep an eye on is our grocery budget. While we enjoy the occasional meal out, the majority of our food is prepared in our home. We have $100 set aside in our budget for restaurants, and it’s not uncommon for us to not have used all of that.

Still, every month, I am surprised at how much we spend on food. I don’t think we are preparing extravagant meals. Most of our meals contain chicken or fish, and we try and have a salad nearly every day. We bring our lunches to school/work, and these range from sandwiches to salads, to some sort of pasta dish. 3-4 times a month, we’ll invite friends over for lunch or dinner, and each of these can run us $75-$100 (similarly, we get invited out 3-4 times a month). There’s always leftovers from these meals that last us another 1-2 meals, but this is undoubtedly why I think our monthly grocery expenditures are so high.

So how much do we spend? About $593 a month on groceries. That number just sounds so high to me, I think $500 would be more reasonable, but there’s no specific area that I think we need to cut back on, so it’s hard for me to complain about where we’re shopping or the types of foods we buy. Since I don’t think we can really change much, I did some investigating to find out how we compare to others, hoping to make myself feel better about our high grocery bill.

Comparing Our Spend

I started with the USDA Cost of Food at Home report for July 2014, which shows the average cost of food at home at four levels (thrifty, low-cost, moderate-cost, and liberal). It shows that for a family of two, ages 19-50, under the thrifty plan, the average is $389.90, the low-cost plan is $496.90, the moderate-cost plan is $618.60, and the liberal plan is $774.20. Our spending is above average, but still below the liberal plan. We consider ourselves to be generally frugal people who do not buy especially expensive foods, but I guess we’re buying a lot of it? Still, it’s a relief that we’re not completely off the charts!

Next, I took a look at the Bureau of Labor Statistic’s Consumer Expenditures for the Los Angeles Area for 2011-2012, which was released at the beginning of 2014. This shows the average annual expenditures for households for all categories, but right now, I’m focusing only on the food category.

How We Stack Up Against U.S. and L.A. Averages

According to the report, the average U.S. household spent $3,880 on food at home, while the average L.A. household spent $4,337 on that category. The average U.S. household spent $2,649 per year on food away from home, while L.A. households came in at $3,166 per year. Totaling these two categories, the average U.S. household spent $6,529 on food, while the average L.A. household spent $7,504 on food.

Food Away from Home

According to my mint.com account, over the last 12 months, we spent $816 at restaurants, $199 on snacks and coffee shops. So we spend just 38% of what the average U.S. household spends on food out of the home, and 32% of what L.A. households spend, on average. Not surprising considering how infrequently we eat out.

Food at Home

We spent $7,120 on groceries in the past twelve months, which is a whopping 83% more than what the average U.S. household spends, and 64% more than what the average L.A. household spends. This is also not surprising, I knew we were spending a ton!

Overall Food Spending

In total (inside and outside the home), we spent $8,135 on food over the past 12 months. That’s 24% higher than the average U.S. household and just 8% higher than the average L.A. household. That’s not nearly as high as I was expecting.

Takeaways from Average Food Budgets

After looking at these two sources of information and comparing our spending to national and local averages, I’m no longer concerned about our spending. Our lack of outside-the-home spending makes up for most of our grocery spending, and we really value those group meals with friends. We certainly are not going to cut back if it means fewer of those.

We can probably be a bit more conscious of where we buy our food to save a few dollars here and there. My new job is very close to both Target and Trader Joes, so we’ll likely spend a bit less if we take advantage of those two stores we like so much.

How much do you spend on food each month? How do you stack up?

4 Ways To Reduce Financial Stress

4 ways to reduce financial stressMoney causes nearly everyone some financial stress. Whether you’re struggling to make it through the month, have a lot of student loan debt, are middle class (whatever that means to you), or have a lot of money invested in the stock market, you likely feel some sort of financial stress at some point. It seems like there’s not always enough for everything, and we all want to get ahead and save for future purchases, so even if we’re in control of our immediate situation, there are future costs looming in the months or years ahead.

Here are a few ways to reduce that financial stress so that you can focus on the other things in life:

Automate Your Finances

If the stress of having bills arrive in the mail every few days put extra pressure on you, consider automating your finances. Have your bills be paid straight from your credit card or bank account each month. You’ll spend the same amount either way, but you’ll be spending less time worrying when the bills come in and can devote that time to something productive.

You can also sign up for paperless billing. It’s much easier to organize and deal with an email reminder of a bill than a paper one that can get lost in the clutter. If the goal is to reduce how much you worry about your financial situation, these can be crucial. Out of sight, out of mind!

Create a Budget

If money is stressing you out, you should consider creating a budget and using a service like mint.com to find out where your money is going each month. This can lead to a lot of clarity, many people don’t realize that they are spending too much in one category and relatively small changes to spending patterns can have a major impact on the bottom line. Knowing where you’re starting from can be half the battle.

Once you know where the money is going, you’ll have one less unknown factor to be concerned about. Financial stress often stems from the fear of the unknown; not knowing if you’ll be able to pay all your bills at the end of the month or what your situation will be like in the future can be a major burden. Putting it all on paper can help take away some of that unknown so we can tackle the issues in a more specific way.

Earn More Money

Nothing takes the away financial stress quite like earning more money. If you’re bring in more money and don’t let lifestyle inflation creep in, you’ll have extra money to use to pay down debt, save for a rainy day, take a vacation, or anything else you’re planning..

It doesn’t have to be a full blown side job either, it can be as simple as earning an extra $100 per month to start. Once the ball starts rolling and you look for other opportunities to make money, more and more doors seem to open up.

Set Goals For Yourself

Setting goals has been proven to have a positive affect, whether you achieve them or not. By staying accountable and measuring your progress, you’ll feel more in control of your situation and will get the needed encouragement to keep making positive changes.

This year, I set some pretty steep goals and while I likely won’t achieve all of them, they’ve helped me concentrate on what’s important and let the other things slide. I’m not stressed out about everything, I am more focused on a few specific tasks and that’s let to relative success.

Don’t Let Financial Stress Get To You

Financial stress is not something that we can easily avoid, and if affects people from all walks of life. But we can definitely take action to reduce the severity and minimize how much time we spend worrying. Take action today and see how big of an impact these tips can have!

4 Smart Ways To Pay For Your Next Vacation

4 smart ways to pay for your next vacationA recent survey conducted by American Express determined that the average American spends $1,180 per person on vacation. For a family of four the cost is $4,720 per year.

While that seems a little high for my frugal tastes the number doesn’t really surprise me.

Even though do I agree we all need a vacation from time to time, I don’t think you should take out debt to do so. Instead here are four smart ways to pay for your next vacation.

Save $23 Per Person, Per Week for a Year

Since the average vacation costs $1,180 per person you could save $23 dollars per week for one year to account for the cost. Just multiply the number of people in your family by $23 and you’ll have your weekly target amount.

By saving now you’ll have accumulated enough money to take your family on vacation debt free next year. Plus if you’re able to develop the discipline of saving a weekly amount for vacation you’ll have much more appreciation when vacation day rolls around.

Become a Travel Hacker

There’s a lot of buzz around travel hacking right now. In fact, it seems like everyone is doing it. And since so many people are jumping on the travel hacking bandwagon it might be a good idea to take advantage of it now before it all comes to an end.

Here’s how it works: you look for credit cards that have sign up bonuses for free hotels, flights, or other travel accommodations. When you find a sign up bonus that entices you you’ll simply get the credit card and make sure you complete the spending requirements in the allotted time.

Just make sure you’re not spending more money by using the credit card or paying annual fees. You’ll also need to pay your balance off in full each and every month or you’ll cancel out your rewards in terms of interest paid.

When you are rewarded one sign up bonus just rinse and repeat. Do make sure that you cancel your credit card before the annual fee kicks in.

Start a Vacation Side Hustle

There are some super simple things you can do online to earn vacation money. You can take surveys, read emails, and even rack up points for searching the web. If you’re looking for an easy side hustle that will allow you to accumulate money to go toward vacation, try signing up for Perk or Bing Rewards.

The above options aren’t going to make you a ton of money but if you have another skill or hobby you can turn that into a more lucrative side hustle.

For instance, you could freelance write, tutor, sell items online, or offer another type of service. You should be able to generate $50 a week in just a couple of hours. That will be enough to fund a trip for two after saving for a year.

Have a Huge Yard Sale

Having a yard sale is an awesome way to pay for vacation. You might not make the full amount needed for your trip but you can put a good dent in the balance.

Go through your house and start collecting all of the items you want to get rid of. You can start selling the items now on Facebook Yard Sales or Craigslist or you can let the items accumulate and host a traditional yard sale next summer.

Conclusion

Taking a vacation is expensive – there’s no doubt about it. But if you’re smart and willing to do a little work now you can make sure that you don’t have to take on debt to fund your trip.