Almost every list of suggested money saving strategies touts the brown bag lunch. For years, personal finance gurus have urged people to do the brown bag lunch thing as a means of saving substantial dollars.
While it is true enough that a worker can blow through a lot of money eating out each day, brown bag lunch savings are not the sure thing they used to be. Long gone are the days when the mere act of taking your lunch would all but guarantee a five to ten dollar savings per day, or three thousand dollars a year.
A couple of reasons account for the narrowing of the savings gap. First, the price of traditional brown bag lunch staples has risen significantly in recent years. Bread, deli meats, and popular frozen food entrees have all seen substantial mark ups over the years, in part because of the spike in gasoline prices. While restaurant prices have also risen, the net effect has been less noticeable, in part because popular chains have mastered the art of combo meals. Finally, as consumers have grown more and more lazy, more expensive convenience foods are finding their way into lunch bags. Those packaged cups of cut fruit and conveniently packaged Healthy Choice entrees add up. The combination of these factors makes the art of frugal brown bagging trickier than it once was.
Fear not, however, because brown bagging can still produce great savings if done correctly, and I am going to show you how to do it correctly over the next few posts. First and foremost, you have to remain on high alert to the role of price increases. For some reason, we tend not to this in the grocery arena. We all notice when gasoline prices rises at the pump, but grocers have little problem sneaking five and eight cent price increases by us. The next thing we know, we are paying $3.35 for the same loaf of bread that cost $2.59 a few years before.
The media does us no favors in this regard. Think how many times you have heard over the last several years about inflation being “extremely low,” “negligible,” and, my favorite, “virtually non-existent.” It is true enough that the overall inflation rate remains low, but the inflation rate for food has been significantly higher. That low inflation rate we hear about is based on a broad sampling of consumer goods, most of which have nothing to do with food. Consequently, even when overall inflation is tame, the price of specific categories of products can be rising fast and furiously. Just look at the price of gasoline during this period of dormant inflation. Then look at food prices, and you will see that the inflation rate for food is a good two to three times that of the general inflation rate. Worse, it is expected to go higher in the coming months due to the drought conditions that plagued the United States this summer.
The good news is that not all prices in a given category inflate at the same time. This is certainly true for groceries. By paying attention, we might notice, for instance, that even as the cost of beef is rising, the cost of chicken or fish might be stable or, better still, dropping.
So what is a frugal consumer to do? Pay attention to prices and trends, and steer away from products that have inflated in price. Take tuna, for example. Its price bounces around significantly, and there is no reason to buy it during the upswings. Similarly, when the price of oranges spikes because of the unexpected cold snap that hit Florida over the Spring, it’s probably a good time to switch to peaches. If bread prices are going through the roof, it’s probably a good time to give sandwiches a break from your lunch menu rotation.
Paying attention to price increases and trends is rule number one for effective brown bagging. I’ll have more specific strategies for you later this week. Be sure to come back, as I show how a few of my previous posts dovetail neatly into this topic.