Managing money nowadays can mean managing what you put on your table and into your mouth. SInce many of the people who consult with me in my bankruptcy law offices around the state of Indiana are not yet prepared to file bankruptcy, but want to learn more about ways to manage their finances, it’s inevitable that we discuss the food budget, which takes such a large part of the money the earners brings home. Then, clients who have successfully filed bankruptcy with my help now need to carefully rebuild their finances, and, once again, food budgets become part of the conversation.
There’s a lot of talk about the price of gasoline, but food prices have also been rising at a very fast pace. Since, as a consumer bankruptcy specialist, I’m always studying up on economic factors and financial matters, I understand that weather disasters have some effect on food prices, but it’s not just that pushing up prices by an estimated 4 1/2% this year. Higher fuel prices make it cost more to get the food to the grocery stores. Demand for U.S. exports of food to other countries is rising rapidly as those other countries develop, and that pushes up prices. Ironically, the manufacture of ethanol (which is supposed to help lesson our dependence on foreign oil) takes corn, which means there’s less corn to use for actual food products. As I frequently remind readers of my bankruptcy blog, I am certainly no economist. I just work hard at staying on top of news about economic matters that can help me better advise my Indiana bankruptcy clients.
To put all this bad news about food prices in perspective, I remind myself (and you) that we in the U.S. still spend a much smaller percentage of our income on food than just about any other country in the world. Even with all this food price inflation we’ve been hearing so much about, we still spend under 8% of income on food. (In Europe, by contrast, people spend almost a quarter of their income on food, and in many countries it’s more like 40-70%. Having said that, the fact is food inflation is the worst it’s been for the past two decades.
For people trying to stay financially afloat, managing the food budget is one important place to start. For all the reasons we’re mentioned here, eating out costs more. Workplace cafeteria eating costs more. Packing a lunch and avoiding “snack runs” to the corner coffee shop or fast food place start to sound like very smart pieces of advice. And, as Kathleen DeChiara, CEO of the Community Food Bank of New Jersey, adds, “You may want to add an extra cup of water to your soup.”