Monday, March 28, 2011

Putting Food on the Table (or, my really long and boring blog entry about how I am learning to manage our family's finances).

Running a household is no easy feat. It's more than putting food on the table. And basically you have to be able to take care of yourself before you can even think of taking care of anyone else, and being able to take care of myself was the hardest thing I ever learned to do.

Up until about eight years ago I was a total financial mess. I'd get a paycheck and I'd pay my rent or outstanding utilities and then immediately send every penny left over to the credit cards I had high balances on. Then I'd have absolutely no money for food or transportation or anything else so I'd end up using credit cards for groceries and deodorant. For me, going to the ATM was a crapshoot. I'd stand there hopping up and down, with my fingers crossed, saying magic words under my breath.When it didn't have anything to give me I felt like the banks were just being mean. I would call various Visas and ask for higher credit limits and then curse out the phone rep when they said no. I never balanced my checkbook because I didn't really know how to. I had a negative balance in my account more often than not. I had bills piled up on a windowsill unopened. I knew they were bad news and they made me feel like a failure so I preferred not to look at them. Then I would be depressed and miserable, so what would I do? I'd go shopping and use my credit cards. Sometimes they'd work but often I'd maxed them out and they'd be declined. It was terrible and I should have been mortified but I really just didn't know any other way. Sad, right? I lived this way for a decade or more of my "adult" life.

Eventually, I got a wakeup call. About seven years ago, I changed jobs. I thought I was making the career move of a lifetime but after a month at the new job they suddenly announced the whole company was moving to Minnesota. I was not about to go with them to Golden Valley so I found myself unemployed. The severance was a pittance seeing as I'd been there only about 5 weeks, but it helped me move to Brooklyn from my horrible apartment in crappy Jersey City. A friend of mine came over to help me clean and pack up my apartment and found my unopened bills in a pile. She opened them all for me and gave me a lecture that made me pay attention. (Thanks, K!)

It slowly began to sink in that I couldn't just charge everything I wanted, thinking "someday I'll make more money and I'll pay it off then." Compounded interest made my debt more than actual spending ever could, and I could barely keep up with all the late fees and insufficient funds fees. I had to do something.

I started by moving. I got a cheaper place to live - a share with two other people. It was closer to where I was now working too so my commute was less expensive. Then a friend helped me by sharing her own story. She had been in different but equally dire straits financially. She recommended a few books and invited me to join a little personal finance group she'd organized with a few of her other friends. (Thanks, J!) In the group we talked about our individual nightmares, helped each other create action plans, made colorful posters to keep ourselves motivated, and gave each other updates on our progress over cookies or hummus and baby carrots the third Thursday of every month. I loved this group.

With their help, I figured out how much debt I had, and what I could do about it. I cut up my cards. I checked my credit reports for errors and for harsh reality. I sold stuff, asked for lower interest rates, I stopped buying things like it was going out of style. I told myself that shopping was a privilege, that there were things I undoubtedly needed but a lot of things I just wanted. I made myself choose among the wants. I started bringing my lunch, carrying a water bottle. I made games for myself like, how long can I go without spending money? I made short term goals (Balance checkbook every week! Put 10% into savings every pay period!) and long term goals (720 credit score! Get out of debt! Buy a house!). I listened to podcasts, read magazines and books, and slowly started making real progress.

Eventually, I did it. And when Johnny and I moved back in together, I preached to him. He went from not wanting to hear it at all to understanding why he had to listen. When we decided to have Thora we got busy because we now had a deadline. We took a personal finance class and moved everything into a joint account. We wrote a budget. We set up bill payments for things we couldn't live without (internet) and got rid of the things we could (cable). We agreed to discuss money openly and once we did, we essentially stopped arguing. It was amazing to me when I thought about it just how much we'd fought about money.

As my pregnancy progressed, we set up term life insurance for each of us. We created health care proxies for ourselves, giving each other durable power of attorney. We established our friends as guardians of the baby in case we both dropped dead, set up a trust for her, and wrote wills for ourselves. We did everything I'd read we should and I was feeling very confident when we made the very big decision to have Johnny stay at home with the baby while I continued to work. Shortly after Thora was born, we closed on our first apartment and moved in. Now homeowners and parents, we really had financial responsibility. We had to give every dollar a name and decide what its purpose was. We gave ourselves an allowance to spend as we pleased but everything else would be strictly guarded. What we didn't need we put into savings, retirement, and Thora's 529. And I look back over the last decade and I'm pretty darn pleased with how much I've learned.

And life is good. We have a plan that involves me doing the math and the planning and Johnny offering his input regularly. It makes sense and it works. It's very time consuming for me and sometimes I am slower than I should be at pulling together our bi-monthly allocated spending plan, but I generally get it done. Sometimes I don't make the time for our money that I should. But overall it works. When it doesn't, it's always because of food. I have strict guidelines written for how much we spend on many categories. Just like the budgets I manage at work, our family budget has line items and a certain amount allocated per month or year. In theory, this all works perfectly. I pay the mortgage in one pay period, and the maintenance and utilities in the other. I can go for months without buying new clothes or shoes. I can easily use the library instead of buying books. I really do believe that if you rely on credit cards as your backup plan, your backup plan will back you right up into debt again. But back to putting food on the table. Food, I admit, is my undoing. I get hungry and then I fall right off the wagon.

It's generally indicated that food expenses should be 5 - 15% of your net income. For us this is impossible. I am vegan and I am a foodie. I like to cook and bake and try out new things. I like to buy high quality, fresh, organic produce. I don't like buying processed foods when I can avoid it. I have fancy cookbooks and I have cookbooks for vegans on a budget. I don't scrimp on the small details of a recipe: I have an entire cabinet of spices, a shelf in the fridge with a half dozen types of vinegar, dry beans and grains to last through a natural disaster. For us, a grocery shopping trip can take half a day. We go every ten days to two weeks and it involves a list two pages long or more, a shopping cart piled so high we have no choice but to pay the $9.95 delivery fee to have someone else get it home for us, and a sum total that is closer to 25% of our take-home pay than 5 - 15. It's outrageous. I look at other people's carts and ask myself how on earth they have so little! But I don't know what other people do. Maybe they shop more often. Maybe they eat out more, snack less, go out for lunch at work. I generally bring my lunch and we eat most of our other meals at home. We go out to eat sometimes but when I'm on top of our finances, it's rare. It's not like we're eating caviar, Kobe beef, lobsters and whatever. I'm talking produce, bulk grains and beans, tofu, soy yogurt, whatever. Basic vegan staples. And the crazy thing is, none of it gets wasted. Oh sure, I end up throwing out half a bunch of scallions because a recipe called for 1/4 cup or I toss a hard old lemon that I needed only the zest of, but generally speaking, we eat what I make and I use everything we buy.

I brainstorm ways to save and come up empty. I could shop at the local Fine Fare or Associated but I walk in and am invariably compelled to instantly turn around and walk back out. The smells bother me, and the whole layout of crammed aisles and advertisements everywhere is like an attack on the senses. PathMark, within walking distance, is hit or miss. For some things it's definitely cheaper but you can't beat Whole Foods for produce and for just all-around vegan-friendly fare. Fairway probably wouldn't save us any money and Trader Joe's doesn't have everything we'd need in the one place. I don't have the time or energy to make a dozen stops to cross everything off my list and without a car there's no way to get home with a baby and groceries from the Park Slope Food Coop. So we come back again and again to Whole Foods. I remember my good friend M used to call it "Whole Paycheck." She wasn't kidding! And now that I'm pregnant again and hungry, even my modified food budget is out the window. I cook and pack my lunch and then an hour later I'm ordering vegetable sushi or a burrito or whatever Newbie desires.

The toughest part for me is that I am so frugal in so many other ways that I can't admit defeat here. I should just adjust my budget to account for this insane expenditure but I refuse to believe that there is no alternative solution, so I am off week after week, month after month. Eventually, I'll get it. But in the meantime I am open to suggestions for keeping food on the table in a reasonable fashion.

How do you manage your family's budget? What is your budgeting weakness? And what is your secret for keeping it under control?


  1. congrats on working so hard and getting so much in order! i know exactly what you mean about spending $$ on food. i wear hand-me-downs for years and don't care, but i need to grocery shop! for me, i do make the extra trip to TJ's to buy lots of pantry items (beans, pastas, oil, vinegar, frozen organic veggies and fruits) but have to go to WF or the farmers' market (both of which are way pricey) for the rest. I used to be a snob about frozen veggies/fruits but have come to learn that they can have great nutritional value; i love their affordability, and appreciate the ease of using them in cooking (mostly in the winter, when buying fresh is cost prohibitive). Let me know if you need any help coming up with easy, affordable, filling meals during this hungry time!

  2. Inspiring, Amy. While I am not in debt (or rather, not in credit card debt...I have some student loan debt), I definitely feel like I need to get a better handle on my finances.

    We faced the same problem with groceries when we moved to Boston. Groceries here are notoriously expensive. I went to Whole Foods the first weekend here (the only supermarket w/ in walking distance), and I decided right away that it was not going to be sustainable. Luckily there is an amazing cheapo open-air market right nearby on weekends with crazy good deals. The food is not local or organic, but it's a trade-off I've decided to make. Once a month we schlep on the T to a cheap grocery store in Somerville and stock up on pantry items for the whole month. This means we have to meal-plan for the whole month in advance. A fringe benefit of this, it turns out, is that then there is a little additional pressure to cook what you had planned, instead of deciding to go out instead.

  3. Wow, you are so dedicated. If we did a tenth of that we'd be doing better. Here, Steve is the saver and while I'm not a wild spender, I'm less hung up about tracking every penny. He stressed about money while I just take for granted that it will show up when we need it. We live a block from our grocery store and are there WAY more often than we should be, but like you, I close my eyes, pick a recipe and cook it, and if its ingredients cost $50 then so be it. I'm experimenting! I think we need some discipline, spreadsheets, or both.

  4. First of all, sometimes I think about how much better off everyone is than where they were when they started in that group and it blows my mind.

    Second of all, I have no relevant advice as the food co-op saves my butt on a weekly basis between it's bulk aisle and cat food! I would be screwed without them!


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