I wrote way back in July that food / grocery and entertainment spending was ‘a major focus for me to reduce’. I wrote in August, after it went up by round $50, that reducing it was going to be – and I quote – “my priority”. So come September when it went up by another $90 I was beginning to doubt my commitment.
A simple ‘I must do something about this…’ wasn’t going to cut it and I needed to take action. My sort of action is…..data analysis. Wild. But a key step to determining what we are spending money on, so we know how to reduce it. I live by the adage that if you don’t measure it, you can’t reduce it.
The category ‘food / groceries and entertainment’ is a pretty broad one. I’ve tried separating these out, but I’ve found that it can get confusing. Sure, food from a supermarket and movie tickets are straightforward and easily classified as ‘food’ and ‘entertainment’ respectively. How about going out for dinner… I’d say entertainment as we have meals out for our enjoyment and usually with other people or as a special event. But what if we went to the same restaurant and got a takeout? Would that be food or entertainment? Drinks at the pub would definitely be ‘entertainment’, but what about grabbing a bottle of wine to have a date night at home because we have two kids and don’t get out much?
In addition, overspending in one area has an effect on the other – if we went out for a meal everyday our grocery bill would be way down, but not so our entertainment budget.
Argh! To save myself from endlessly pondering these difficult issues, I long ago grouped food and entertainment in a day-to-day spending category. It worked really well when allocating spending, but it doesn’t allow for a detailed analysis of exactly where the money goes.
When I looked into the category in more detail and analysed September’s spending, the results were surprising. To carry out the analysis, I simply entered all the ransactions for the month into a spreadsheet and put them into basic categories. I found out the following:
|Fruit & veg||2||$72.55|
- We took out $90 worth of cash over five occasions. I don’t like using cash as there is no transparency about what we used it for. Was it food/groceries or entertainment? I much prefer to use a card so I can see where the money went.
- We visited grocery shops 20 times in one month. Twenty times! And given that we were away for five days, and all transactions during this time went into the ‘holiday’ spending category, that means we went to the shops just about every day of the month. I knew I wasn’t being terribly organised and had definitely dropped the ball on meal planning and following my own shopping method advice, but I’m still stunned at the number of shopping transactions we had.
- We had ten ‘meals out’ and spent $164.05 doing this. By meals out I mean anything from tea and cake to an actual meal. Now, this was an unusual month in that it was Mr FFs birthday and we went out for a meal, I had an old friend visit from interstate and we went out for a meal, I started going out with my mother’s group for lunch after our playgroup, and my husband had a few days off for various appointments so we stopped for a drink and food while we were out and about. Even so, this amounts to – again not counting the five-day holiday – around three times a week.
I’ll tackle the grocery shopping another time, but my first step is to put a cap on our entertainment spending. I’m going to start off at $100 which, in complete opposition to the above, I’ll keep in cash in a separate portion of my wallet. Anything that is ‘entertainment’ will be spent using this. As above, it can be hard to categorise so I’ll loosely term it anything we do for pleasure, including a bottle of wine at home for date night. Finally, anything from the ‘entertainment’ budget that isn’t spent each month will be carried over for future months. We can put it towards more expensive activities and months (such as December with its multiple birthdays and, of course, Christmas) and holiday spending money. This in itself provides a huge incentive not to spend it or at least to consider our priorities when spending it. This is why I think it will work better for me to deal in cash as I can see the savings and easily keep the amount left over separate from the rest of our money.
Here’s hoping this works!