Pennies, nickels, dimes, quarters, and dollar bills—Over the years our concept of the value of money has indeed changed. Remember your childhood days of saving your birthday dollars from Grandma and saving your weekly allowance or money earned from extra chores you "bargained" to do around the house? Back then each hard-earned penny meant something—each quarter brought you that much closer to a toy, game, record, doll, or pack of baseball cards. In those early years you were able to focus on that one goal item and, for those who paid attention along the way, learning the value of a hard-earned dollar was a beneficial experience picked up along the way.
Today, perhaps more than ever in our lifetime, our focus has once again turned to the financial aspects of our lives. While our source of money becomes tighter due to credit issues, unemployment, and salary cuts, the demands upon our dollars have also grown in the form of higher prices for goods and services including fuel, food, and other inescapable living expenses. The result is a dwindling supply of money for your family's monthly expenses—let alone those special treats that we may have grown accustomed to under better financial skies. For many families, the simple act of paying attention to where the family dollars are spent may be enough to make riding out the current economic challenges just a bit more palatable.
When it comes to cutting family expenses, the American Institute of Certified Public Accountants (AICPA) has assembled a list of suggestions and tips that can help you reconsider the way you spend money on feeding your family. By following some of the AICPA's tips you can significantly decrease your monthly expenses and retain more of your household income, which you can save or apply to other necessities or even family treats.
The first step is to take stock of where your money typically goes in a month by creating an accounting of what money is spent where during a typical week and month. Be honest about how many fancy morning coffee drinks you have each week and how many prepared snack foods you buy at the supermarket. Once you have a detailed list compiled for comparison, see if any of the following tips and suggestions from the AICPA might fit into your daily spending cycle:
- Instead of buying an expensive coffee every morning, make your own at home or at work. If you like flavored coffees, there are plenty of syrups and flavored creamers available and you'll spend far less for your morning caffeine.
- If your caffeine comes from soft drinks, minimize the number of them you drink or drink water instead. If you absolutely have to have a soft drink, avoid buying them singly at convenience stores. Instead buy them in bulk bottles or cans at the supermarket and keep them in the refrigerator at work. You'll save a considerable amount of money that way.
- Marketing has convinced us that bottled water is better for us but many brands are simply water from municipal water supplies that has been filtered. You can do the same at home by installing a water filter or using a filtering water pitcher.
- If you enjoy eating out, eat out less often
- When you do eat out practice tips such as limiting the number of alcoholic beverages ordered, drink a less expensive brand of wine, or drink water with your meal. Consider skipping the appetizer or split one with your dinner guest. The same holds true for dessert—skip the dessert, split one with your dinner partner, or, better yet, have something homemade waiting for you at home to satisfy your sweet tooth.
- If portions are too large at a restaurant, consider sharing your entrée or get a "doggy bag" to take your leftovers home and have them for lunch at work the following day.
- If you buy deli salads for lunch at work, buy your favorite ingredients at the supermarket and make your own salads.
- For those who like baked goods, make your own cakes, cookies, and breads at home. With homemade treats you have the added benefit of knowing what goes in them and you can avoid many of the preservatives used in prepared snack foods. Package cookies or cakes in sandwich bags and you have a quick afternoon snack available at work.
- Cook at home instead of eating out at restaurants. Develop a well-stocked pantry of staples. You'll spend far less on the ingredients for daily meals than you will for a complete restaurant meal to feed your entire family. Leftovers can become lunches the next day or with a little thought, planning, and a few additional ingredients they can be re-imagined for dinner the following evening. If you consistently have leftovers after completing a meal, reevaluate how much you prepare and reduce the amount accordingly to meet your family's needs.
- The cost of a whole chicken is far less than the cost of a chicken that has been cut up and packaged by the store. With a cutting board and a sharp knife you can cut up a chicken on your own and pocket the savings. Most cookbooks and cooking websites provide simple instructions and diagrams to show you how to separate the chicken pieces.
- Consult nutritional guides and become familiar with appropriate portion sizes. Many families prepare and eat far too much food. For example, a serving of meat is about 3 ounces when cooked which is about the size of a deck of cards. Monitoring portion sizes will help reduce waste.
- Wise shopping choices play a vital role in managing your money for potential savings. Try to avoid unplanned shopping and impulse buying. Go to the supermarket with a prepared shopping list and adhere to your list of needed items. Don't rush when shopping and never shop when you're hungry.
- Use coupons when possible but only use coupons that are for products you typically buy.
- Shop at discount or warehouse stores. With some planning you can split bulk purchases with family and friends. Warehouse savings are especially attractive on non-perishable items such as detergent, garbage bags, toilet paper, paper towels, and similar items.
- Utilize a vacuum sealer and take advantage of bulk purchases of meats and fish, which can be frozen for future use.
- If there is a smoker in your family, try to kick the habit. The ever-rising cost of a pack of cigarettes can take a considerable chunk out of a family's weekly budget while the habit impacts the health of all family members.
- See if your bank or your utilities and credit card companies offer electronic payment options. Often the service is free and allows you to save the ever-rising cost of ten or fifteen stamps each month to mail your payments to their ultimate destination.
Once you evaluate your spending habits over a month, choose some or all of the tips mentioned above and put them into action. Monitor your actions closely and see where you stand after a month. Hopefully saving $2.00 a day on a cup of coffee, $80.00 a week by cooking dinner at home two nights a week instead of eating out, and a $7.00 here and there for a pack of cigarettes each week will add up to a considerable savings for your family. If you see immediate results, consider tracking the dollars saved each week or month and place those savings into a bank account or piggy bank. The accumulated savings over a year may be enough to help out with the next family vacation or help cover the unexpected cost of a new washer and dryer when the old set finally says, "we've had enough!"
All it takes is a little planning, dedication, and thought. Once you and your family see the amount of money that is potentially wasted and how much can be saved for other fun things, the process becomes a game and it gets even easier for the whole family to make thoughtful money-saving choices. After all, you work hard for your money—keep as much of it as you can!
American Institute of Certified Public Accountants—www.360financialliteracy.org