Archives For February 2012

After I wrote the “How much do you spend on food” article which blew up, I decided to continue my investigations into the food spending topic.  The information in that article is good at a high level because it shows how much each income tier spends on food – both at home and eating out.  However, it doesn’t get into the details of what we actually spend on.

The folks at the US Census Bureau were kind enough to conduct a survey over the last 25 years to determine where we spend our money.  I think they did it just for me because I’m not sure why else anyone would want go through that painstaking process!!  I combed through their data and summarized how much we spend on food on average by detailed categories.  For now, I’ll stay at the higher level categories, but they break it into lower levels which we’ll dive into later.

To the findings

The sample set average annual income in the survey is $60,753 (2009); which is above the current average household income at $49,445.  However, it gives us a good benchmark to review against.  The total monthly food budget for food eaten at home is $313, while food away from home is $218.  This matches pretty closely with the statistics from the BLS statistics when reviewing by income tier.

Let’s take a look at how the average family spends their monthly food budget.

Detailed food budget

It doesn’t surprise me that the two biggest food categories are “Meats, poultry, fish, and eggs” and “Fruits and vegetables”.  This correlates with our personal budget, especially since we try to go organic with both categories.  I think the “Cereals and bakery products” and “Bakery products” are lower for us because we don’t do much baking.  I’m not sure why there are separate categories for cereals… apparently some people eat a lot of cereals!

The “Other food at home” category consists of sugar and other sweets, fats and oils, miscellaneous foods, nonalcoholic beverages, and food prepared for road trips.  Oh yes, they get that detailed!  The “Sugar and other sweets” category average is around $12 per month.  I love chocolate, so I think our number is above average!

The other interesting part is the column I added to track the percentage increase in food expenses since 1999 (ten years).  The overall increase in food expenses is 26.7%.  I thought the “Meats, poultry, fish, and eggs” would be the highest increased category, but instead it was “Other food at home” and then “Fruits and Vegetables”.

Within the “Fruits and vegetables” category, the “Fresh Fruits and Vegetables” increased by over 40% while the “Processed Fruits” only increased by 4%!  I guess this is a good sign for our health since we’re eating fresher foods.  Surprisingly, beef has only risen by 2.75% since 1999.

Alcoholic beverage expenses also experienced a large jump at almost 37%.  Economists always say that alcohol sales increase during a recession, so our numbers could be a result of that!

This should give you a good idea of how most Americans spend their money on food each month.  How does this compare to your monthly food budget?

 

Which country is the smartest

Have you ever wondered which countries in the world are the smartest?  Well, I know some really dumb people who went to college, but comparing by college degree attainment is one way to rate them!  According to the Bureau of Labor Statistics, about 40% of the adult population in the US are college graduates.

I was actually surprised because I didn’t realize that many people graduated from college!  When compared to the rest of the world, we are fourth behind Canada, New Zealand, and Japan.

Canada, eh?  Canada has managed to jump way ahead of the rest of the world in degree attainment at roughly 48%.  This can probably be attributed to socialized healthcare and the cold, which prevents people from going outside as much.   Trust me, I have a minor in Economics.

Another interesting part is the US has a degree attainment rate of over 5% above most European countries.  I figured the Scandinavian countries would be higher than they are, and I bet the UK isn’t happy to be at the same level as Ireland.

I thought Japan was a lot smarter than us as a whole as well, but their degree attainment isn’t that much higher.  I was surprised to see Korea so high, but I suppose the “Republic” of Korea doesn’t include North Korea.

Just in case you were wondering how much a college degree is worth in the United States, check out my previous article where I dig through the numbers.  Basically, it is worth it to go to college if you can avoid major debt.

There you have it… now you can amaze your friends with this new knowledge!

 

Formal schooling is missing some key points in our education… find out the five things formal schooling doesn’t teach us.

 

Burn the Ships!!

February 13, 2012 — Leave a comment

Burn the ships

When faced with a dilemma, one so tough that our backs are against the wall and the only options are to surrender or fight, what do you do?

Would you burn the ships as fabled in Cortes’ capture of the Aztec Empire? As the story goes, Cortes’ men were far outnumbered in a country thousands of miles away from their home. Their backs were against the wall and their options were death or fight. Cortes burned the ships to give them the last bit of motivation they needed to conquer an entire empire!

That’s exactly what we should do when faced with a tough problem… annihilate any options of turning back by taking extreme measures that force us to act. I’m tired of going to work, so I’m going to burn my car!!

Wait, does eliminating your options and back up plans really make sense? Sure, it makes for a great story and certainly helped Cortes conquer a far away nation and steal their treasure! Wait, it doesn’t make Cortes sound as noble when I say he didn’t have the best intentions and instead yearned for treasure and loot. The story just isn’t playing out like it should!

Sorry to break the news, but he didn’t even burn the ships. Instead, according to Wikipedia (so it must be right), Cortes scuttled his ships. This isn’t nearly as sexy as burning them, but he did disable them by sinking them. However, it wasn’t to motivate his men, but to squash their hopes of mutiny and loyalty towards the Governor of Cuba. The Spanish had a settlement in Cuba, and some of the native Cubans wanted to go home instead of fighting for the guy who kidnapped them (Cortes).

The funny part is I was originally going to write this post to talk about “burning the ships” as motivating. It sounds like the way decisions should be made – like the turning point in the movie where the good guy gets in his first punch. He throws in everything he has and comes away victorious.

However, after I started reading the real Cortes explanation and thinking about it, the more burning the ships sounds like a terrible idea in real life issues!! Going back to the example I used earlier, should you really quit your job just to motivate yourself enough to finally find something new? Probably not, I used to think that was the only way, but then I learned how to use my job as a tool to get the things I want and need.

It doesn’t sound nearly as cool, and you won’t be applauded by your friends and family for making the bold and drastic move, but I can guarantee it will work out better a large percentage of the time. The key is to start working on your new options now. Don’t make any more excuses. Now is the time to take action.

This still won’t be enough for most of us to make a change. I didn’t finally make a decision to get out of debt, instead I had a breaking point that brought me to my knees.

When will you make the change? Are you fulfilling your mission while pursuing your passions or just waiting it out on the ship? It’s time to take the first step and get moving on your dream.

It doesn’t have to be drastic, it just has to happen. For Nate, it was baking his first pie. For Chris, it was taking the first step to develop a smart phone application. For me, it was starting to write material and reserving my domain name. From there, I continued to work on something every day. Now, it feels like I’m heading in the right direction and can make something out of this.

You don’t have to burn the ships to start moving in the right direction. What are you doing today to pursue your passion?

How much do we spend on food - based on household income

Do you know how much you spend on food? As a follow up to why we use a cash budget, I’ll take a deeper look into how much we spend on food each month. Food is obviously a necessarily expense, but we don’t all spend the same amount.

The graph above represents the total amount we spend on food and compares the amounts across income brackets. The BLS does a good job of not revealing the exact amounts for each income ‘quintile’, but I did find the top tier is a pretax income greater than or equal to $93,358. From that, I’ll guess the following for the other tiers:

Lowest 20 percent = less than $24,000

Second 20 percent = $24,000 – $46,000

Third 20 percent = $46,000 – $70,000

Fourth 20 percent = $70,000 – $93,358

Highest 20 percent = $93,358+

You can see the wide discrepancy in spending on food between the lowest and highest income brackets in the chart above ($7,200 annually). That’s a pretty amazing difference. What we don’t know is if it’s at all a product of family size, as this isn’t included in the data. However, I would assume family size isn’t that big of a variable.

My initial guess was the major difference in the amount spent by income bracket would be attributed to food eaten ‘away from home’. This would easily support the assumption that rich people are always eating at fancy restaurants.

Instead, it appears the amount spent at home vs away from home stays proportionately the same throughout the brackets, but it does rise slightly more at the top. For example, the 2nd tier spends about $500 more on eating out than the first tier; they also spend around $500 more on food at home. It just shows that we do eat more expensive food at home and at restaurants as we make more money. When you compare food costs at Wal-Mart with that of Whole Foods, you can quickly see how this is possible.

So how much should you spend on food?

If I look at how much we actually spend on food, our total is probably around $700 per month. However, our monthly food budget is around $900 ($500 for groceries, $400 for going out to eat) because groceries includes all home goods. If we look at the total amount just on food, we’re probably around $8,400 per year, and that’s without kids!

If we needed to cut our budget down we could. Since we are able to, we do try to buy organic meat and fruits/vegetables. We could also cut out our going out to eat budget , but there are just so many great places to eat in New Orleans!! The entertainment amount includes alcohol as well… an often forgotten budget killer.

As I discussed in the cash budget section, you should track how much you currently spend, and then start tracking the actual amounts each month. Most people can easily cut out their ‘going out to eat’ fund if they really need to tighten up their spending. Also, you can get creative with coupons and read about additional ways to save.

Another interesting chart is how much we spend on meals away from home. The chart below reviews where the money is spent by income bracket per week; breaking it into breakfast, lunch, dinner, and snacks. It’s pretty amazing the first tier spend on average $60 less per week on food away from home than the top tier.

There you have it, our food expenses are mostly a product of our income, and if we need to get serious and cut expenses, it should definitely be possible. Are you surprised how much the average household spend on food? How much do you spend on food? Make sure you check out the detailed breakdown of food expenses as well.

February 6, 2012

On the surface, Susan Cooper seems like a person who has faced minimal challenges as she leaped her way up the corporate ladder. Her resume contains a laundry list of executive positions many of us hope for – Vice President, Regional Sales Director, and General Manager.

She’s a proven commodity in the leadership and sales fields. She’s learned her limits are only the ones she places on herself. However, it hasn’t Finding Our Way Now - Susan Cooperalways been that way. Since she was a child, Susan has struggled with dyslexia and has had to cope with a mind that is deceived by the puzzle on the paper. For many who struggle with dyslexia, they’re trapped in an endless maze of hopelessness and frustration.

Susan has done her best to deal with it and has never used it as an excuse. In fact, she’s tried her best to hide it from others because she knows what can happen if she doesn’t. Susan mentioned that a dyslexic child is never treated as a smart child because not many people have the patience to understand them. She used her challenge as a motivator for succeeding in life – and succeed she did.

It was a monumental task for her to climb her way to the top; a task that was aided by assistants checking her written word for errors that could have given her away. She developed a strong network of respected colleagues who admire her for what she’s accomplished.

Now, she wants to walk away from it.

What?! Why would you walk away from something you’ve worked so hard for?!

My only theory is that Susan has built a phenomenal amount of courage over the years, and she’s confident she can take on a new challenge and succeed. She’s left her former co-workers confused at her reasoning for stepping off the corporate ladder.

It’s this courage that helped her fight another difficult challenge that forced her to take her first step – she was recently laid off. Her experience and large price tag prevented employers from pursuing her prowess. This made her question if she even wanted to do this work anymore.

Finding Our Way Now - Susan Cooper1

Her mind was already made up – No.

Susan is rediscovering her love for life, which she had previously abandoned. Her artwork has entered a new spring and her love for it has blossomed as she’s renewed her quest for pursuing her passions. She does some incredible things with her iPad – which includes the two drawings on this page!

She’s even doing something else she thought she’d never be able to do – blog. How could a dyslexic person write a blog? The disconnect from what the mind thinks to what the hand writes must be incredibly challenging. Oh wait, we already know Susan can overcome challenges.

Susan has been in the blogging business for quite a few months, but now she’s taking it to a new level. She just launched her new site – Finding Our Way Now – and will use it to help others find their way in life. She’ll write articles to help you find your way and overcome obstacles we’ll all inevitably face. She’s also coaching women on how to succeed in the business world.

Susan was a very successful executive.

How does Susan describe herself now? Let’s ask her:

“I would have to say I am me, Susan Cooper. The artist, writer, businessperson, out of the box thinker, motivator, teacher, and adventurer. I am a person who looks at each day as a new adventure with the anticipation of what each tomorrow will bring.”

Check out Susan’s new website at: http://findingourwaynow.com/

 

February 2, 2012

My wife and I love to travel.  We’ve been very fortunate to experience some incredible places… and we look forward to many news ones in the future.  We use travel as motivation to live with a cash budget and control our money.  Today, I’ll take you through our trip to Dubai.

It’s a city that rose from the desert to a booming metropolis – but at its base is sand.

Dubai Desert Safari 1

The city was masked with a veil of fog when we arrived – only adding to the mystery and intrigue that should come from a city such as Dubai.

Dubai Smoggy City

However, we did manage to find an oasis or two.

Dubai on the river

Aqua Fina?

Dubai Desert Safari 2

After we filled with water, we were ready to hit the dunes. The most exciting part of our Dubai trip was the desert safari. They picked us up from the hotel in Landcruisers, and we set off to a far away land. It crossed our mind more than once that we could easily disappear and never be heard from again!

Dubai Desert Safari 3

The desert safari was incredible – the large SUVs floated over the sand much like a boat floats over water. We rode the waves and hoped our ship wouldn’t capsize.

Dubai Desert Safari 4

However, one group we were with wasn’t so lucky! Their driver decided to create his own tracks in the desert and quickly find out why the others followed previous tracks. It took them about 30 minutes to finally get it out – with a combination of digging and towing from another SUV.

Dubai Desert Safari 5

We continued on our journey through the desert. It really makes you think how anyone survived on the land before modern technology. The heat was blistering.

Dubai Desert Safari 6

We finally find our oasis, with camels and all! Our safari ended in the middle of the desert with camels, belly dancers, and hookah pipes.

Dubai Desert Safari 7

My camel didn’t feel like posing anymore.

Dubai Desert Safari 8