Archive for August, 2008

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Supermarkets

August 31, 2008

Sue’s comment got me thinking.

I think sometimes pack n save is not always the cheapest supermarket in wellington.

I’m a big fan of stocking up during the regular, new world specials which pack n save never get close to

At our house we don’t have a fireplace, so I didn’t think there was any reason to remove the “no circulars” sign when we moved in. (Why pay for firelighters when you can burn circulars?) But clearly, this means we are missing out on finding out about good specials at New World.

One of our eventual aims here at Frugal Me is to organise a collective “good deal alert system” for Wellington: whether as a mailing list, a Twitter feed, a wiki, or some other way we haven’t decided.

In the meanwhile, it seems that lots of people are thinking about where they spend their grocery budget. Here are my grocery habits for your review. Bear in mind that we live in Hataitai, and I don’t want to spend lots of time and fuel cris-crossing town, which strikes me as false economy.

We always have a shopping list for the supermarket, and we try to stick to it. But instead of racking my brains to create one from scratch every week, I have a standard list that I print out (cost about 5c) and I cross off things that we don’t need. I find it easier to make sure we’ve caught everything that way.

We buy most “dry goods” at the Kilbirnie Pak’n’save, and some staples. Allegedly, they are the cheapest supermarket in the area, and I think that’s true. It’s weird, because the Woolworths directly across the street is supposed to be Wellington’s most expensive supermarket. If there is a good deal I have no compunction about getting several units of any imperishable item. They’re cunning there though; you have to watch out for things that are cheaper by weight in the small package than in the big one.

(Interesting analysis here from Bernard Hickey on why Foodstuffs supermarkets are cheaper and better).

I always pay at the supermarket with a credit card. Credit card transactions are free, I pay the card off every month so there’s no interest, and my bank accounts pay interest on the average balance, so I want to keep that as high as possible. Yes, I am that mingy. 25c a week is $13 a year, you know. Wouldn’t you like to find $13 in your jacket pocket? I would.

Fruit and vegetables we buy at the Waitangi Park market. I sometimes get meat there too. It’s quite good discipline because you can only pay cash, so I get $15 or $20 and see what I can do with it. I am now in the habit of doing a complete circumnavigation of the market to scope out prices and quality before I buy anything.

If I’m in the area, I get meat at the halal butcher in Newtown, which has the best-trimmed, leanest, cheapest meat in Wellington by my estimation. You’re not going to get any pork there, obviously… Also, it’s a family business run by pleasant people, and I like patronising small businesses of that nature.

I buy flour, oil, and similar staples in the largest quantities I can at Moore Wilson wholesale. You have to be careful there because all their pricing is ex-GST, but they are still generally cheaper than the supermarket.

And that’s it. Apparently we spend about half what the Otago University Food Cost survey suggests, which I simply cannot understand. I’m good, but I’m not that good. There’ll be a post in that when I’ve done some analysis.

So folks: where do you shop, how do you shop, and why? Could I do better if I tweaked our routine?

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Healthy Diets and GST

August 30, 2008

The issue of GST in food seems to be a periennal one, so I thought I’d kick off a conversation about why it’s such a furphy.

To begin, yes, 12.5% of any shopping bill might be made up of tax, and the poor will pay more tax proportionally than the rich because their spending on food is proportionally higher. But I think that removing GST won’t make things that much easier for people on low incomes, and it won’t make our frugal middle-income people that much better off.

A truism I learned years ago is that people’s spending tends to expand to fit their incomes. If you make $500 in the hand per week and it jumps to $550, then your spending tends to expand to meet it. Suddenly you can afford an extra channel on Sky, or you can afford cheese again. The person who pointed this out to me stated that he’d seen people routinely upgrade their cars and houses as their incomes grew over time (I was a student, and he was an ex-insurance salesman who’d “retired” and opened a cafe, which he ran remarkably like an insurance saleman who knew nothing about food, service, or lunch-hour rushes). He noted that as people’s incomes changed over their lifetimes their expectations of ‘normal’ changed, so once they got to or near retirement age they kind of ‘freaked’ at the necessary change in spending. I said I’d have to wait and see.

Now it is fairly sensible; if you have more money, you tend to spend more money. You don’t have to be a genius to see that. And this always leads me to believe that if you remove GST, people will just have a little more money available to… not be able to afford the stuff they want.

So in keeping with the kaupapa frugal, I’d like to remind myself that the best way to make the most out of a limited budget is to make good choices. Removing GST would mean that I could have up to 12.5% more in my food budget. This is because lots of things you can buy at the supermarket wouldn’t be GST exempt, booze and tobacco being notable examples. Nor magazines. Nor Gadgets and/or widgets. And of these things booze and baccy are two that people on lower incomes tend to consume large amounts of both. My own anecdotal experience is that this tendency holds up.

Now it’s hard for me to know exactly how much the average family spends on groceries. If anyone has a reliable source of info Frugal Me would love to know it (whatever the NZ Herald uses is mostly bullshit).

Here I live in a two-adult household and we spend about $150 per week on everything (and per person that’s double what I lived on in Melbourne in my low-income job). The reason we live so cheaply is that we don’t pay other people to make things for us. Example? Pre-made pasta sauces. You’re paying someone to make something you could do yourself with tomatoes, onions, garlic and herbs. To prove that I’ll try and rustle up some comparative prices in the next few weeks.

Anecdotal evidence is that that when times get tough that people cut out of their diets is fresh and fruit and vegetables; exactly the stuff they shouldn’t be. The argument that we should remove GST from foods suggests that people will change their normal behaviour and continue to buy fresh items as prices increase.

But… I fail to see the reasoning behind that. If people buy less fruit and vege when prices increase, then the prices of all food products will be increasing. No GST would only mean that the substitution of goods takes place at slightly lower prices. And, because people’s spending matches their incomes, they’re probably living near the edge of their budgets anyhow.

And I note I’m wandering into economics, which I’m not very good at. So to be blunt, if people are making bad choices then making food items slightly cheaper won’t help them. It might mean a small amount more fresh food is consumed, but I’d have to assume that “bad” foods will also increase proportionally.

Comments, clarifications, and suggestions welcomed. If not only to clear out any assumptions with, you know, facts.

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So why be frugal?

August 28, 2008

My most humble opinion is that frugality is best when it’s either: something your born with, or something you learn. Now, if that sounds like I’m pretty much stating the obvious then you’re probably missing that frugality is also something that can be forced on you. ‘Being poor’ is really just enforced frugality.

The kind of frugality I think we’re driving at here is the sort where you could afford to buy a stonking great Ford, but don’t. And why? Either because you know your mother would frown, or because you know that the petrol will cost too much (and it’s bad for the environment anyway).

When writing to this site I really want to outline and build a philosophy of being frugal. Not because of tight-fistedness, but because of a conscious decision to buy less junk, and to make more sense out of what it is that we all do; constantly consume.

So let’s start by stating that we all have to consume, and consumption is what drives the modern economy. If you live in a city then you have no option but to purchase goods and services from other people. And in doing so, you enrich others, as they enrich you by purchasing what you offer. Not exactly rocket science.

But who says that we have to purchase what the market offers? The market is always growing, changing, and evolving, but it isn’t always smart. Sometimes it offers you cheap stuff that looks like a bargain, but you’re actually doing yourself and others around you a disservice by spending your cash on it. Worse! Some people buy crap with money borrowed from Australian banks… In other words, they borrow from another country to buy crap from a further country, and offset that purchase with the value of a good or service they haven’t even provided yet.

And the last paragraph is the last of the economics you’ll hear from me. Because I’m not very good at it.

I do have common sense however. And buying crap that I only believe I need is something to be avoided.

My contribution to this blog will centre on consumption. Do I really need all the stuff I’m surrounding myself with? Do I need to pay someone else to do something that I could easily do, or learn to do, myself?

My own observation about current New Zealand society is that we’re moving away from No.8 wire thinking and forgetting how to do really simple things. Simple things like cook a healthy meal. Instead we pay someone else (often an Australian), to make a pre-packaged meal that we have to use a specific appliance (a microwave) to “prepare”. Now right there is a whole lot of spending that you don’t need to do. You don’t need a microwave to cook things when most if not all houses have a stove (so why buy one?), and you don’t need to pay someone else to cook for you (because it’s easy, even for time-poor people).

At the heart of all this writing will be a philosophy of a simple life. A life that can be full of gadgets, games and gourmet food, but a conscious life, one where I know what I’m consuming, where it’s come from, and where it goes to when I no longer need it. It won’t be perfect, but then neither are you or I.

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A penny saved is more than a penny earned

August 27, 2008

This blog is dedicated to frugality: in other words, we are thinking about making the best of what we already have, rather than trying to get more. And yet, isn’t getting more a worthwhile goal? Why shouldn’t we put as much effort into making a dollar as saving a dollar?

There are two reasons.

First, tax. Every dollar you earn is taxable. So if you earn one extra dollar, you’ll keep less than one dollar. Maybe quite a lot less, if you earn enough. But if you save one dollar out of income which has already been taxed, that whole dollar is yours. If a few seconds of self-control save you a dollar, that’s a lot easier than working for it.

It’s worth figuring out what your net after-tax earnings per hour are. Then when you contemplate a potential saving, you can say “it would take me x hours to earn that money.” If you only think of savings at their nominal price, you’re leaving out the chunk of your earnings that goes for tax.

Second, this blog wants you to lead a more fulfilling life. A life where you only do things that you think are worth doing for their own sake. Sadly, many of the things that would get you an extra dollar demand you do things you don’t want to do. This would be the Tom Sawyer definition of work:

Work consists of whatever a body is obliged to do, and […] Play consists of whatever a body is not obliged to do.

(If you can get extra dollars doing things you want to do, you go for it and don’t let anyone hold you back).

If you have to work all the hours God sends to make those extra dollars, that’s not necessarily the best use of your time, if you have other goals than accumulating money. We all know that time is money—the corollary is that money is exchangable for time. I am mingy about the exchange rate. In this blog, we will assume that you are too.

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Llew says potatoes

August 26, 2008

A little while ago, over at Sunnyo, Llew blogged about how to grow potatoes in a bucket.

This struck me as extremely frugal. I already have old buckets lying around. I have compost for free, from our compost heap. And I always do seem to end up with a sprouting potato or two by the time we get to the bottom of the bag.

I can report that this really does work. My first bucket went in three months ago. The plants were looking really good, but the recent storms bashed them to shreds and they died. So last weekend I went to tip the bucket out, meaning to have another go. Nestled in the compost were two good handfuls of new potatoes. I ate them the same night, and they were DELICIOUS. I have no doubt that had the plants survived, I would have had the promised bucketful, and once it’s warmer, they would come away a lot quicker.

Genuine new potatoes, even in season, are quite pricey, so I think this qualifies for frugality blogging.

Of course, the really keen do-it-yourself-er has their own cow.

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I say tomatoes

August 24, 2008

In Welllington, the cheapest supermarket is Pak’N’Save, and at Pak’N’Save, the cheapest brand is almost always the house brand, Budget.

I am pretty leery of buying house brands, because so often they are such low quality that there is no effective saving in buying them. If you buy food but then go “ew yuk” and throw it out, it is no bargain.

However, the Kilbirnie Pak’N’Save has Budget tinned toms at 64c—almost 30c cheaper than the next cheapest brand. Since my domestic cuisine relies heavily on tinned tomatoes, this is worth investigating. After all, 60c per week is $30 a year. Wouldn’t you like to find $30 down the back of the sofa? I would. That’s a whole lot more tinned tomatoes, for a start. And tomatoes are rich in cancer-preventing lycopenes, which in turn are most available from cooked tomatoes. Clearly, cheap tinned tomatoes posess all the virtues the frugal eater desires. Except, perhaps, taste… read on.

Hitherto my normal brand has been Trident. According to the label, Trident tins are produced in Italy and are 65% tomato (the remainder being tomato juice and who knows what). Budget are also grown in Italy, and admit to 60% tomato. At 400g per tin, that’s only 20 more grammes of tomato. On a unit basis, clearly the Budget ones are still a better deal. But are they good enough?

Yes, dear readers, yes they are. I ventured 64 cents on a trial tin, and I can report that they are at least as good as the quite OK Trident tomatoes I was buying before. In fact, they appear to be identical, leading me to wonder whether the Budget tins are merely rebadged Trident ones. Anyway, bless the European Union’s taxpayers: they are funding our cheap tomatoes.

BONUS TINNED TOMATO FACT: tinned tomatoes are improved by a pinch of white sugar. It may not be that vine-ripened taste, but no one has to know.

Bon appetit. Or, even, Buon appetito!