Understand Food Product Dating and Save Hundreds on Food Expense

You go to great lengths to get a good value for the food dollars you spend: you use coupons, purchase store brands, apply the buy on sale not when you need it and the buy on sale and stock up strategies to lower your grocery bill. Yet, misconceptions about food product dating may be causing you to throw out good food needlessly, costing you hundreds of dollars annually, dollars you can’t afford to lose.

You are not alone; Americans waste 160 billion pounds of food per year according to Jonathan Bloom author of American Wasteland. That is edible food that goes uneaten. Bloom estimates that food waste costs an average family of four from $1,365 to $2,275 annually. A 2013 study conducted jointly by Harvard Law School and the National Resources Defense Council (NDRC) determined that widespread misconceptions surrounding food product dating contribute to food waste and that a clear understanding of the meaning of food product dating could significantly reduce food waste and save consumers money.

Food product dating is not about food safety

The primary misconception about food product dating is that it is related to food safety. People think that food is not safe to eat after the date on the package. The truth is, the dates that appear on food packaging have nothing to do with food safety. Food product dating is meant to convey information related to the freshness and quality of the food. In an effort to protect the reputation of their product brands, food processors date food products to encourage consumption at peak freshness and quality. The food is still good to eat significantly past the date on the package. In fact, it will become unpalatable due to spoilage long before it is unsafe to consume.

Definitions of food product dating terms

General explanations of the meaning of common food product dating designations, according to the authors of the joint study conducted by Harvard Law School and the NDRC,  follow. Notice that they have nothing to do with food safety.

  • “Production” or “Pack” date: The date the product was manufactured or placed in final packaging.
  • “Sell by” date: This date is used by retailers for stock control. It is the last day that the product can be sold and retain a reasonable amount of shelf life at peak quality for the consumer after the purchase.
  • “Best if used by” date: The estimated date at which the product will no longer be at peak quality.
  • “Use by” date: The last date recommended for the consumption of the product at peak quality.
  • “Freeze by” date: The last date the product can be frozen to maintain peak quality.
  • “Enjoy by” date: This designation has not been clearly defined.

Food storage in the home determines useful shelf life

How a food product is stored in the home is a more important determinant of useful shelf life than the date on the product. Minimize the time perishable food is exposed to temperatures in the danger zone (40 degrees to 120 degrees Fahrenheit), and avoid the exposure of non-perishable foods to air, moisture, heat, and light to extend their useful shelf life. Freeze food products to maintain their freshness.

How we use food product dating 

Rosa and I use food product dating to determine the relative freshness of the food products we buy at the store and for the purpose of rotating food inventory in our pantry. Food dating is a helpful reminder to us to use up a product before it goes bad, but it is not an indicator of when the food is no longer palatable. We regularly use food products long past the package date as long as our senses tell us they are still edible. In fact, we will purchase non-perishable food (snack crackers, pretzels, cookies, and such) that are past the date on the packaging if the price is right. We have found that freezing these products for 24 hours extends their shelf life and gives us ample opportunity to consume them before they become unpalatable.

Stop throwing money away!

Don’t discard food products solely because they have exceeded product dating. Nothing is wrong with them except that they may not be at peak quality. Use your senses to determine when it is time to throw out the product. Does it smell bad? Does it look old or spoiled? Does it taste bad? Let your senses be your guide and save money.

K. C. Knouse is the author of True Prosperity: Your Guide to a Cash-Based LifestyleDouble-Dome Publications, 224 pages

How Much House Should You Buy?

When most people talk about how much house to buy, they talk about how large of a mortgage they can qualify for, because they intend to purchase as expensive a house as their credit will allow. A few years ago, that is also what most people would have been encouraged to do: buy the most house for which they could qualify. The thinking went like this: inflation and career advancement boosts income over time; a mortgage payment that might be a stretch today will be a piece of cake five or ten years into the future and ridiculously small twenty years down the road.

Take into account long-term costs

The thinking regarding how much house to buy has changed since the collapse of the national housing market and financial crisis that followed it in 2008. Homeowners learned the hard way that incomes don’t always keep up with inflation, careers can stall, and houses don’t always appreciate in value. Now homebuyers are advised to take a longer view of the cost of homeownership and anticipate how it will affect their ability to save for retirement as well as the amount of money they will need for a secure retirement.

Charles Farrell, Chief Executive Officer of Northstar Investment Advisors and the author of Your Money Ratios estimates that over the long term a house actually costs 2 1/2 times the purchase price when interest, property taxes, insurance, maintenance, and improvements are taken into consideration. For example, a house that sells for $200,000 will actually cost the owner a half a million dollars.

Housing costs affect the availability of money for retirement saving

The difference between the cost of buying a house that sells for $300,000 versus one that sells for $200,000 isn’t the $100,000 of additional purchase price but actually $250,000 over the long term. That’s $250,000 that could be added to retirement savings if the less expensive house is purchased.

Housing costs affect the amount of money needed for a secure retirement

Not only is there less money available for retirement saving if a more expensive house is purchased, the more expensive house adds to the amount of money that will be needed for a secure retirement, because the additional cost of property taxes, insurance, utilities, and maintenance for the more expensive house will require more income in retirement. It is estimated that the combined annual cost of property taxes and insurance alone equals about 2.5% of the value of the house. In our example, the $300,000 house will add $2,500 per year or $208 per month to the cost of housing in retirement versus the $200,000 house.

What does that $208 represent in terms of additional retirement savings? Darrow Kirkpatrick who writes about personal finance issues on CanIRetireYet.com uses a rule of 300 to arrive at the figure: simply multiply the monthly expense by 300* to arrive at the amount of retirement savings needed to fund the expense. Using our example, the additional $208 in property tax and insurance expense for the $300,000 house in retirement will require an additional $62, 400 of retirement savings over what would have been needed if the $200,000 house had been purchased.

The total long-term impact of choosing the $300,000 house over the $200,000 house is a difference of $312,200 ($250,000 in additional long-term cost for the house plus $62,400 in additional retirement savings needed to pay for the increased cost of housing in retirement.).

How to avoid buying too much house

To avoid buying too much house, Farrell says to purchase a house priced at no more than 2 1/2 times your gross income. So if you make $75,000 per year, following Farrell’s guideline, you would purchase a house priced at $187, 500 or less. Should a dual-earner household base the calculation on their combined incomes? Whether you follow Mr. Farrell’s guideline or not, I recommend against it, because basing the purchase of a house on both incomes puts the dual-earner couple in a precarious position should one of them experience an interruption in income. It also limits their options: no going back to school full time to pursue an advanced degree or to complete one; no quitting a job to start a business or to take care of an ailing family member; no downsizing to part-time work to be more available to the children; reduced financial flexibility to deal with inflation or to fund saving. Dual-earner couples should make home purchase decisions based on one income to give themselves the best opportunity for financial security and financial freedom.

Beyond guidelines

Guidelines can be helpful when planning the purchase of a house, but I prefer that a person determine how much house he or she can afford by taking into consideration personal values, spending priorities, and long-term financial goals as reflected by the budget. How much can be spent on a house consistent with one’s values and without jeopardizing spending priorities and long-term financial goals? That is a very personal calculation that defies general guidelines.

Advantages of buying a less expensive house

Regardless of how you arrive at an answer to the question of how much house to buy, there are definite advantages to buying a less expensive house:

  1. More money is available with which to fund retirement savings and other needs.
  2. Fixed living expenses are lower which makes it easier to deal with an interruption in income, catastrophic medical expense, and other financial setbacks.
  3. Enhanced financial flexibility to take advantage of opportunities such as starting a business, changing careers, pursuing advanced training, taking time off to pursue an interest outside of a career, and so forth.
  4. The need to downsize prior to retirement is reduced.
  5. Fixed living expenses in retirement are lower which reduces the amount of savings needed for a secure retirement.

Be true to yourself

When thinking about how much house to buy, keep in mind Mr. Farrell’s guideline and the 300 rule; reflect on your values, priorities, and goals, list the non-negotiable features you must have in a house while remaining true your values, priorities, and goals; then purchase the least expensive house that meets your criteria.

*Mr. Kirkpatrick arrives at a multiplier of 300 by converting the monthly expense into an annual expense (monthly expense x 12) and then, assuming a 4% annual withdrawal from retirement assets, determines the amount of principal needed to pay the annual expense (annual expense x 25):  12 x 25 = 300.

K. C. Knouse is the author of True Prosperity: Your Guide to a Cash-Based LifestyleDouble-Dome Publications, 224 pages

GoodRX.com Email Drug Price Updates Save Time and Money

In an earlier post, I described how Rosa used the GoodRx prescription drug discount card and website to save money on her generic maintenance drug prescriptions and how GoodRx also offered pricing updates via email.  I’m writing this post to report Rosa’s experience with the email drug price update feature.

How email price update works

Rosa signed up for the free email drug price update feature.  When there is a price change affecting one of the drugs that Rosa has listed on GoodRx, she receives an email.  For example, she was notified that one of her drugs was added to the Walmart list of drugs that sell at the $10.00 per 90-day supply price.  Through her insurance, she had been paying $5.00 per 30-day supply for that drug, so the price change update saved her $5.00 per 90-day supply.  Another time, she received an updated discount price for a 90-day supply of a different drug that had only qualified for a 30-day supply discount previously.  By taking advantage of the 90-day discount, Rosa saved $4.00 every 90 days. So far, the email price updates have reduced Rosa’s prescription drug costs by $9.00 every 90 days or $3.00 per month.

No more drug price research

In addition to the price savings, the email updates save Rosa time: she doesn’t have to research the price of each drug every time she refills a prescription, and she doesn’t have to check with Walmart repeatedly to determine which of her drugs are on the $4.00 30-day supply and the $10.00 90-day supply lists.

Save money and time when purchasing maintenance prescription drugs by utilizing the GoodRx email drug price updates.

K. C. Knouse is the author of True Prosperity: Your Guide to a Cash-Based LifestyleDouble-Dome Publications, 224 pages