What did you buy at the grocery store this week? How did you pay for it – cash or credit? Does that make a difference?
In hard times, we all juggle. It’s the proverbial “rob Peter to pay Paul” as we pull funds from one source to cover another. It’s a sort of hot potato dance, often with borrowed sums, and it’s a jig millions of us are familiar with.
All too familiar.
Assuming debt, Debt assumptions
Once upon a time, I was used to accumulating debt for big ticket items or long term purchases. It was always debt I knew I could pay off. But debt became a way of life only after an expensive divorce and corporate layoff, both of which hit at the same time.
Adding issues with child support and a struggle to find paying work, and assumptions about incurring debt fly out the window. Borrowing habits change because they must. Those assumptions, by the way, are generally derogatory. People who live on credit must overspend, right? Or be frivolous with the pocket book, or incapable of budgeting?
That wasn’t my case. And I doubt it’s the case for many. Debt is a way to survive – plain and simple. Until you have to pay the piper, of course.
Eating on a budget vs Eating on credit
Eating on a budget isn’t a problem around here. Neither is buying on a budget, though there are times it’s exhausting and demoralizing. I amuse myself with a helpful running total in my head as I pick and chose in the food aisles, but I’ve always done that. And continue to do so, whether I slide plastic through a reader or write out a check.
Still, there’s no question that the groceries I buy have changed. Cheaper cuts of meat. Fewer vegetables. Far less fish and fresh fruit. More bread and snacks to feel full. Or simply to feel good.
I could whip up a healthy meal at dinnertime for $15 or less (for the three of us), and do, two or three times a week. But when we’re hungry, our go-to choices – especially when pressed for time – are now processed foods rather than fruit which we love, or healthier options I might prepare myself.
Recently, I’ve gone back to paying cash for food. Or rather, writing a check, knowing the funds are available. Just as I had for 20 years before the end of a 12-year marriage. That’s the direct result of a few professional pokers in the fire coming to fruition, at last.
Purchase behavior, cash vs credit
Yesterday, I read an interesting article in the New York Times which addressed issues of grocery shopping on cash versus credit. The article had its fair share of assumptions, and apparently some of the readers took “cash” literally, without realizing the distinction – as I interpret it at least – as liquid funds (cash, checking) versus borrowed dollars.
Specifically, referencing the Economix blog and a study of 1,000 consumers, the article states:
People who buy food with cash make better choices than people who pay with credit and debit cards.
Yes, there is a mention of debit cards. Still, I took offense at the underlying assumptions. I believe that people make better choices when they aren’t struggling financially. Using credit to pay for food is an indication of financial crisis, not poor judgment.
I will also mention that we don’t all have the time or capacity to run to multiple stores for the best deals. Nor do we have the storage (or brawn) to buy in bulk. Moreover, where I buy in (relative) bulk to save money is Target. But there again, we’re talking about processed foods – soups, frozen meals – a budgetary lifesaver, but far less healthy fare than what we used to eat regularly.
Conclusions? (My household… )
We’re no different than millions of families. Yes, we have yielded our quality and quantity of fresh foods – good meat, poultry and fish, fruits and vegetables. Yes, there are more cookies and cakes to get through long hours at the keyboard for me, or nights of hitting the books for my sons.
Yes, I know we haven’t eaten as well. Simply put – eating healthy is harder to do on less money, and for those of us forced to live on credit, sadly, that comes with the territory.
Hmm…I use credit for food, as well as everything else, for the credit card rewards. Using that credit card for me is in not indicative of financial crisis. I pay my balance in full every month. I find that for me making poor choices (here specifically meaning processed foods vs. non-processed food) is more reflective of time as opposed to finances. I cook a lot because I have time. When I’m pressed for time I cook less.
Good vs. less-good might mean for me Whole Foods v. the regular grocery store, not fruit vs. fruit roll-ups. I have other issues with Whole Foods so I hate to put them completely on the side of “good” but for the purpose of this response, Whole Foods represents more organic, local produce, which I can’t always afford to care about. Being financially strapped might result in rice and beans, as opposed to cookies and cake.
My son always says when he’s broke he’s much more likely to go to fast food as opposed to groceries, a choice I never understand but it sounds like you might.
I’m rambling but I’m going to have to ponder this one. I know your conclusions fit your life but I’m not sure I agree that they’re universal. Very thought provoking!
I Hear what you’re saying, SF. And I know some people who use credit cards selectively for the very reasons you mention, as well as convenience.
I don’t think my conclusions are universal, and I didn’t mean to imply they were. But I certainly don’t think they’re unusual. And I believe the facile conclusions of small samples make for easy sound bites, and far too many assumptions.
It’s so true! And what’s worse is, I remember reading an article a long time ago, but I don’t think that this has changed that grocery stories in low-income areas generally have poorer quality of fruits and veges, but they actually charge MORE for them. It is NOT easy to eat healthy on a budget, that’s for damn sure!
Terrific post, BLW.
I have been working on Michael Pollan-izing (Pollinating?) my food choices and the one thing that has struck me over and over again is how much more expensive it is to buy whole, fresh foods rather than processed foods. (And when I think back to my days of teaching in a low-income neighborhood in NYC, it comes as no surprise that those kids were far more likely to bring a 25 cent bag of chips from the bodega for snack rather than a piece of fruit.)
In the growing conversation about organic and local food, I don’t hear nearly enough attention being paid to cost. And, even though I live in a rural county where there are farms aplenty, produce from CSAs and the farmers’ market is still more expensive than processed options.
What’s a health-minded consumer on a budget to do?
Excellent points, Kristen. And it isn’t just health-minded consumers, as though worrying about looks or weight. Some medical conditions are exacerbated by certain foods, and helped by others, though certainly we are all better off when we eat in a moderate healthy fashion.
We wonder about the obesity problems in this country, and some of the health issues that put such a drag on our “systems.” So many aspects of our culture are interrelated: the economy, unemployment, health care, educational achievement. All of this in our kids, certainly, and in other segments of the population. And tied to all of it – I believe – nutrition, exercise, sleep, stress. Nutrition is hard to manage without bucks. Period.
This might be going off topic; it is cheaper to eat healthy foods rather than processed foods but the trade off is time and planning. I use weekends to slow cook foods like spaghetti sauce, a beef stew in a crock pot, a roast chicken for sandwiches, the chicken leftovers can be converted to broth on their own in a few hours that in turn can become a mulligatawny soup with a quick mirepoix (precut in my freezer), rice, frozen peas, and curry powder. Reheating such food and making a quick salad during the week is just as quick as slitting the plastic on a pre-fab dinner. Cooking pasta with pre-made homemade sauce is 20min tops. The hard part is the planning ahead and always checking the fridge to ensure you are not forgetting about your fresh produce and leftovers, waste is never the cheaper option.
This strikes so many chords with me. I am acutely aware of how so many people struggle to buy fresh foods; of how people buy processed things due to financial need and convenience. I try not to, but I know I take for granted that these constraints are not an issue for me. I should feel much bigger pangs of guilt and conscience when I toss a head of broccoli that has languished too long in the fridge. Thank you for reminding me of this. I feel a renewed sense of obligation to feel grateful for what I have, and mindful of not wasting it.
As for the issue of cash v. credit, we’re credit. We have a great card that deposits 2% of all purchases into our brokerage account, which adds up quickly. We put everything but the mortgage on it. (I even bought my current car on plastic to get the cash back. Then transferred it to a 12-month, 0% card and basically financed the thing for free…) My husband does a great job of keeping track of everything. I’m much more debt-averse than he is, but he’s much more financially savvy than I am.
Two months ago I decided to start eating healthier. I go to the grocery store once a month except for milk and bread. I took myself shopping, purchased fresh fruits and vegetables, better cuts of meat, whatever I needed to keep me away from processed foods.
I spent $283.00, went home and blanched and froze some of the fruits and vegetable so they would last the month. I cooked meals and ate leftovers. The food I purchased didn’t last until the end of the month but cost more than the processed food I normally buy that gets me through the month.
The next month I went back to my old habits (habits I can afford) and spent over a hundred dollars less on groceries. Splitting the plastic on a pre-fab dinner may be quicker but it is not less expensive. I’m not interested in quick, I’m interested in cheap. I live on a very restrictive budget. It has been my experience that eating healthy is not the cheaper route one can take.
If eating healthy were cheaper you can bet I would have found a way to do it because I can sniff out a deal from a mile away and there are no deals like that to be had at a grocery store. Not unless it is on processed goods.
As for buying food on credit I don’t do that because I don’t have credit cards. Don’t believe in them and at this point in my life am glad I don’t. I’ve seen some hard times and can only imagine the debt I would now be in if I had gone the credit route.
Perhaps it is because I did not grow up here but rather in the part of the world where credit cards did not become ubiquitous until very recently, I grew up with the belief that any debt is bad debt. (I am not saying this belief is correct or not!) My husband and I are blessed enough to never have to carry any balance on our credit cards. If we cannot afford something, we don’t buy it. (I am not saying that people accumulating balances are being irresponsible! I acknowledged that we are blessed!… On 2nd thought, if I have to write so many disclaimers perhaps I should not leave a comment for this post at all…) Ok. What I really want to say is that 20%+ interest rate is CRAZY! Again, in the Asian community, you CAN always find some relative or friend who is willing to loan you some money at a much lower rate. There have been studies done on why Asian immigrants have been able to bootstrap themselves and the existence and custom of such an informal “loan” structure plays a big part. I probably went off a tangent with this comment. Sorry. Lack of sleep…
Ah… sleep deprivation, I know thee so well… No worries!
Yes 20% interest is crazy!
Thanks for sharing. After getting myself into deep debt a couple of times in my life I now live a total cash life. I don’t buy anything on a credit card. No cash I go without. That being said I have the luxury to do this because I am in a good financial situation. I have seen people who have had to live off credit cards to get through a financial crisis in their life. Each situation is different. I do think that there is validity to the findings on a general level that when we purchase food with cash that we will make different choices than if we use credit.
So many good points, BLW. I’m the one in the house who scans the weekly mailer from the grocery store for deals, and I’m amazed at how much more expensive some of those whole foods can be when they’re not on sale. (And even discounted, some of the prices give me pause — berries, for example, are one of the few fruits I can eat, but not at the cost for a tiny box!)
I’m glad those pokers in the fire are paying off for you.
I’ll head to the Times to check out that story – interesting premise. But fascinating statistics usually leave me wondering – correlation or cause?
That debit cards are listed alongside credit is interesting because when I use mine, whether at the gas pump or the grocery, I’m spending my liquid money without taking the time to write and deliver a check. I always spend “cash” on groceries because food is a basic expense.
We don’t eat many processed foods, but in general I find the convenience foods – jarred spaghetti sauce, Annie’s Mac and Cheese – to be more expensive than the more fundamental ingredients used to make them, whether it’s tomatoes or pasta. Even canned vegetables seem more expensive per serving than fresh – but I know it actually depends on which whole foods we’re buying. Green beans and lettuce are cheap, but brussels sprouts and asparagus aren’t quite. Apples and citrus are easy, but beyond grapes things get expensive. And good grief, if you’re shopping at an actual Whole Foods? Yikes.
This is great food for thought, Wolf – and excellent conversation among the commenters. Food is such a personal thing, in a way. How we shop for food, what foods we buy, the tradeoffs we’re willing to make, the values we place on different foods – these are fascinating studies. And yes, with the growing discourse on organic and natural and local, the studies only get more interesting and complicated.
I’m very interested in the cash vs. credit discussion. It seems that some people are more willing to spend when they have cash (literal cash) in their wallet, while others are quick to spend with credit cards. I rarely carry cash – and I’m really quite frugal – so I’m not sure I fall into either camp. But the psychology of all this is fascinating.
Today’s “This is Indexed” has a funny food cost graph, thisisindexed.com
Oh, delightful, batticus! http://thisisindexed.com/2011/04/extra-cheese-is-not-a-seasoning/
(You might enjoy checking out Matt Posky. He’s a new discovery for me, and wonderful. http://mattposky.wordpress.com/)