JLP over at All Financial Matters pointed out an MSN article that says family cookout costs are soaring. Given the higher price of gas and groceries are a hot topic as of late, I just had to check it out. Just as JLP had mentioned, I found the sources for this study to be a bit odd. It is a list of food items, yet aside from the price of ground beef coming from the National Cattleman’s Beef Association, the only other sources are Home Depot and 7-Eleven. Does Home Depot sell any of the items on that list?
But I don’t want to dwell on their source of statistics, but rather talk about how the media, or anyone, can paint whatever picture they want when throwing around percentages. They correctly state that a typical family BBQ will cost around 6% more this year compared to last year. By now it is no surprise that food costs have increased significantly on a percentage basis compared to the more conventional inflation indicator. That isn’t news. But to claim that costs are soaring might be a bit much.
What a 6% Increase Means in This Example
Looking at their chart of the cookout items, right away you’ll be drawn to some of the high price changes from last year, such as hamburger buns at over 16%. Yes, a 16% increase is pretty high, but let’s put things into context. Some basic math shows that the article did correctly point out that overall, the cookout cost is about 6% higher, but what is left untold is that this results in a $1.65 increase.
Yes, your family BBQ is going to cost less than $2 more this year. You might want to call off all your plans, because clearly, with these soaring prices it will be impossible to have an affordable cookout.
How Hard Would it be to Save $1.65?
If you’re headed to the grocery store to pick up the items you need for your cookout, do you think you could find a way to save $1.65 from your bill? I’m willing to bet that you can, and could probably save even more. All you have to do is walk down the bread isle and see the hundreds of choices available. Next time you are at the store, look at the number of different brands of hamburger and hot dog buns. There are probably a dozen or two different brands to choose from. Some may be $2.50 a package, and others may be 99 cents. Some could even be on sale. There are enough choices out there so that you can find an affordable option that will fulfill your needs.
The same goes for anything on that list. Some items are bound to be on sale, while others may not be. You might be able to buy three pound batches of ground beef for 30 cents a pound less than buying a single pound. Cook one pound on the grill, and freeze the rest for meals later. There are countless ways that you can shop smart and save money.
Higher Prices Force Better Decisions
I already ascertained that higher food prices may actually be good for some of us, but the example shines through in this story as well. Look no further than to Tony’s comment in the story:
I’m finding myself questioning every purchase, wondering if it’s gonna get eaten or if we really need it.
So people have to actually question their purchases and make sure they are only buying things that they need and will eat? This is terrible! What were people like Tony doing before? Just walking down the isles and piling whatever sounded good into their carts? This not only results in wasting money on food that isn’t eaten, but it is probably just adding to people’s waistlines as well.
The funny thing is that even though prices may be higher, since people are paying closer attention to what they are buying and sticking to what they know they need and can reasonably eat, they are probably actually spending less on food this year. Again, it is a shame that it takes a quick price increase to cause people to act in a more responsible manner.
The Frugal Are Rewarded
For those people who have always been smart shoppers, this trait is becoming increasingly helpful. You already know how to sniff out bargains and buy only what you reasonably expect to use. This means you probably aren’t being forced to make drastic shopping habit changes like others who have taken grocery shopping and prices for granted in the past. Thanks to a family cookout costing $1.65 more this year, people like Tony realize buying only what you need and finding a sale is the cool thing to do.
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.
