Ask an Economist (Post #1005 and counting)

[Julian Delphiki]

I just read that from newspaper that food bill for an average UK family will rise 1500€ this year. We're seeing quite hefty inflation here as well, last month 3.9% iirc. Cheaper cars and consumer electronics did keep number lower than what the % actually is for normal living costs.

Increase in housing prices has been quite low recently, and with that kind of inflation real value of apartments is probably falling.

 

[Supermath]

I just read that from newspaper that food bill for an average UK family will rise 1500€ this year. We're seeing quite hefty inflation here as well, last month 3.9% iirc. Cheaper cars and consumer electronics did keep number lower than what the % actually is for normal living costs.

Increase in housing prices has been quite low recently, and with that kind of inflation real value of apartments is probably falling.

Wait -- Pounds or Euros?

 

[Julian Delphiki]

Euros, as it was converted to € in Finnish paper.

 

[EdwardTking]

Bumping because Britian's housing market is going bust right now

Yes, the imaginary economy has changed from fantasy to nightmare.

 

[Fifty]

What are the scope and limits of the ceteris paribus clause in economic theories, and how do you reconcile the need for falsifiability with the epistemic blank check that is granted by the ceteris paribus clause?

 

[JerichoHill]

The limit of "ceteris paribus" is that its great for theory, but bad for practice, because economics is very difficult to reduce into a laboratory setting. Experimental economics is trying to change this.

"Ceteris paribus" is an attempt to isolate onto one variable. Now, since the real world isn't stagnant, "ceteris paribus" essentially becomes a what-if fantasy. It's a useful tool, but its problem occurs when folks over-rely on its conclusions for real world policy prescriptions.

How does one reconcile it? Well, you can have your theory, your prediction, your isolated effect, and then through observation a reasoned logic, see if its effect actually occurs. A combination of math-proof economics and interocular economics, so to speak.

 

[Martacus]

I'm currently in the process of buying a house. I don't have many worries--the payments on the house we're getting are going to be lower than the cost of renting in this town, even after accounting for taxes and insurance. So it's certainly better to buy than rent in our case. As first-time homebuyers, we've qualified for about $10,000 in downpayment assistance (this is on an $83,000 home), and we've got additional assets to be able to cover the remainder of a 20% down payment.

Things could be tight for a little while though, so we're trying to come up with ways to save money. A few things I've come up with so far after visiting Get Rich Slowly:

1. Make a budget and try to stick to it (of course). 1st month or so might be tough as we won't be sure exactly how much we'll spend on essentials as food, gas, etc.

2. No cable service. I never watch TV myself, and my wife tends not to watch a whole lot either. Internet service is a must, however.

3. Try to grow most of our own vegetables. Again, first few months will be tougher, since plants need time to grow. I've got Square Foot Gardening on hold at the library, so I'll be studying up on that before way too long.

4. Change my own oil. It's a savings of only about $25 per month, but it's still $25 I could put toward something else.

5. Getting our furniture secondhand. My wife works at a clothing co-op and employees get first pick on most stuff--we've already got a recliner, love seat, several tables, dishes, and cookware: all of it free. Add in bedroom furniture we're bringing from home, and we've fully furnished our house for absolutely no cost apart from fuel used to transport items. All the appliances came with the house and are in good repair.

6. Limit utility usage. Watch less TV/other electric entertainments, cook multiple items in the same pot, shower less often (gross as it sounds), use high-efficiency bulbs, other little things. The house gets a good amount of natural light in, so we won't need to use a lot of lights.

Any other big things I'm not taking into account here?

 

[T.A JONES]

I just read that from newspaper that food bill for an average UK family will rise 1500€ this year. We're seeing quite hefty inflation here as well, last month 3.9% iirc. Cheaper cars and consumer electronics did keep number lower than what the % actually is for normal living costs.

Heres the answer to counter all that inflation . Become a commodity miner.

This guy's bonus goes up faster then any loaf of bread can. believe that

 

[Stolen Rutters]

I'm currently in the process of buying a house. I don't have many worries--the payments on the house we're getting are going to be lower than the cost of renting in this town, even after accounting for taxes and insurance. So it's certainly better to buy than rent in our case. As first-time homebuyers, we've qualified for about $10,000 in downpayment assistance (this is on an $83,000 home), and we've got additional assets to be able to cover the remainder of a 20% down payment.

Things could be tight for a little while though, so we're trying to come up with ways to save money. A few things I've come up with so far after visiting Get Rich Slowly:

1. Make a budget and try to stick to it (of course). 1st month or so might be tough as we won't be sure exactly how much we'll spend on essentials as food, gas, etc.

2. No cable service. I never watch TV myself, and my wife tends not to watch a whole lot either. Internet service is a must, however.

3. Try to grow most of our own vegetables. Again, first few months will be tougher, since plants need time to grow. I've got Square Foot Gardening on hold at the library, so I'll be studying up on that before way too long.

4. Change my own oil. It's a savings of only about $25 per month, but it's still $25 I could put toward something else.

5. Getting our furniture secondhand. My wife works at a clothing co-op and employees get first pick on most stuff--we've already got a recliner, love seat, several tables, dishes, and cookware: all of it free. Add in bedroom furniture we're bringing from home, and we've fully furnished our house for absolutely no cost apart from fuel used to transport items. All the appliances came with the house and are in good repair.

6. Limit utility usage. Watch less TV/other electric entertainments, cook multiple items in the same pot, shower less often (gross as it sounds), use high-efficiency bulbs, other little things. The house gets a good amount of natural light in, so we won't need to use a lot of lights.

Any other big things I'm not taking into account here?

Wow that's an affordable house. Good job.

Also from getrichslowly...
Get a home in a walkable neighborhood. If you can walk to the grocery store, you can save even more money on gas.

Something I need to work on myself...
Instead of showering less often, you can also take more efficient showers (quicker showers, with a shower head shut-off to turn off the water when you soap up.) Military-style showers are theoretically only a minute long or so, and the water is on less than half that time. (How they pre-heat up the water that quick, I have no idea.)

 

[Martacus]

Wow that's an affordable house. Good job.

Also from getrichslowly...
Get a home in a walkable neighborhood. If you can walk to the grocery store, you can save even more money on gas.

Something I need to work on myself...
Instead of showering less often, you can also take more efficient showers (quicker showers, with a shower head shut-off to turn off the water when you soap up.) Military-style showers are theoretically only a minute long or so, and the water is on less than half that time. (How they pre-heat up the water that quick, I have no idea.)

Well, it's not a very walkable neighborhood from what I can tell. But then, Fort Wayne is not a walkable city. At all.

Shutting off the water while I lather up does seem to be a better option; thanks for the tip.

 

[Cutlass]

Ride a bicycle whenever it's practical for small errands. Keep the thermostat at no more than 68 in the winter and go without AC as much as possible. A programmable thermostat is a good investment. If money is that tight for now you probably can't do a lot of home improvement, but some of the cheaper fixes have big results, like weatherstripping any windows and doors that leak and putting up plastic over the windows in the winter. And if you have forced air heat, seal up all the cracks in the ductwork. Insulate your hot water pipes that you can get to.

Get an auto repair book for your car and unless you feel completely out of your depth try to learn to do the basics beyond oil changes. Wash the car yourself, no car washes.

If the refrigerator is more than 10-15 years old, replace it even if it works fine. In many homes energy audits find that the fridge is the single biggest user of electricity.

Unplug: Many types of devices commonly used now, chargers for everything, tv, vr, dvd player, stereos, computers, lots of stuff, have a stand by power draw that benefits you not at all. shut them all the way down when not in use.

Utility companies often do free energy audits. Check if yours does and take advantage of it.

Eat cheap. Which means all meals made at home. Bag your lunch for work. Shop sales. stock up on stuff that's on sale. Clip coupons and buy stuff that doesn't spoil when the coupons and the sales match up. Buy store brand for anything you can unless you flat out don't like it.

Learn to do as much of your own work around the house as possible. If there's a good hardware store near your house, consider shopping there instead of a Home Depot. The prices may be a little higher, but you would be amazed at how much advice you can get to do repairs that you didn't know you could do.

You can get at least some clothing second hand as well, and some other items.

Use the microwave instead of the stove for those items that can be cooked very quickly.

 

[JerichoHill]

Lots of good advice on homebuying. I got 40 bucks more a month because i replaced my gas powered mower with a manual mower, thus giving me 2 good days of exercise and allowing me to cancel my gym membership.

Making your own food is not only cheaper, but much healthier. Especially if you grow it.

 

[Norseone]

haha I reccomend every subsistence farm their backyard this summer. All the cool people are doing it.

 

[JerichoHill]

Norse, I've got about 60 sq ft of raised gardens,about 15 sq ft of hanger gardens,and about 25 sq of container gardens.

I grow so much I sell it at profit.

 

[Hygro]

You stopped going to the gym? But I thought that was the source of all your power

 

[Homie]

Making your own food is not only cheaper, but much healthier

I disagree. If you are a big family, then it would work, otherwise it is more expensive because you´ll only use a little bit of the produce you buy for a meal, and the rest might go bad before you make another meal with it. Eating healthy and making your own food is more expensive than junk food if you are single, which is unfortunate.

 

[JerichoHill]

For all those who really have enjoyed the AAE threads, please subscribe or visit my new blog:
http://jericho-hill.livejournal.com


Homie, you're right about spoilage being one of the biggest unseen costs of mass quantity food production.

In my case, I buy from local shops rather than a supermarket, and what excess food I have I sell during the growing season at our farmer's market to recoup my seed / planting costs.

 

[I'm Cleo!]

Homie,

I don't know. It's striking how much cheaper it is to cook for yourself, even if you're on your own. If you spend Sunday (provided you can see the games from the kitchen) cooking things like stews and soups to refrigerate / freeze for the week, you'll save a ton of money.

Cleo

 

[Cutlass]

Even when you don't have recipes that are sized to one or 2 people, or you are making semi-prepared meals like Rice-a-Roni, it still works out pretty well if you are eating your leftovers instead of tossing them. It can be a little dull, but with tupperware most all dishes can be refrigerated for a couple of days or frozen for a week.

So make a rice dish one day, a potato dish the next, leftover rice the 3rd and so on to lighten up the boredom a bit.

Unfortunately, fresh fruit and vegetables have a high likelihood of spoilage for the person living alone unless it's convenient to buy just a couple of things every few days. Large bags of frozen veggies on the other hand are very easy to use. Just place the amount you want for that meal in a microwave dish with a bit of water or 3 minutes or so in the nuker and it comes out fine.

There was a recent newspaper article about a couple who tried to save money eating out and measured the money very carefully and found that even gourmet grocery shopping was less expensive than medium quality restaurants. I'll have to look when I have a bit more time and see if I can come up with it online.

 

[JerichoHill]

*Rummages around Yodlee's Money Center for Food XP totals*

Since going local I've reduced my entire food bill (eating in + eating out) by 150 dollars a month, about a cost savings of 30%