Just, not exactly the way I’d planned! I’m writing this in case I get hit by a bus or something in the next few years and my next of kin stumble across my remaining toilet paper holdings and think that I was carried away by the corona virus panic of 2020. I was not. It was more of a different kind of panic, which started maybe six years ago…
In the years leading up to my retirement, the economy sucked. (Thanks, Obama!) One of the uncertainties I faced was the cost of healthcare. I had a great plan at the company where I worked, but figured I would have to purchase coverage in the aftermath of the Obamacare apocalypse. Wasn’t sure how much to budget for. Plus, investment opportunities matched the economy. Interest on savings accounts were less than one percent. CDs were maybe 3% if you wanted to tie your money up for five years, so I used a different strategy: I would invest in household goods and food.
I had raised five children on a single, sub optimum salary, so I know a little bit about shopping for value. I looked for purchases that would give me a better than 3% return on the investment. Plus, if my income really sucked in retirement, I still wanted to eat, have the luxury of TP and whatever else I could squirrel away. So let me tell you about my adventures and misadventures in investing for my retirement. (This was all in addition to my 401K contributions, so it wasn’t completely squirrelly!)
First of all, you have to pay off all your credit cards. If you are paying 20% interest and making minimum payments, you need to buy everything at 20% off just to break even. The first month. With credit cards, compound interest is not your friend. All my credit cards were paid off and paid in full every month. That’s the only way one should ever buy groceries with a credit card, if you can avoid it. With five kids, who expected to eat regularly, that wasn’t always the case with me. Get there. Pay off the card with the lowest balance and then start applying that payment to the next lowest balance until you are out of debt. Rinse and repeat.
With that in mind, you need to know what a good price is for everything you buy. The store advertises its sale prices, but they probably mark up other things so they can make a good profit. If you’re pinching the pennies until Abe squeals, you need to know the difference. Also realize that driving five miles to save a nickel a can on something won’t save you money either!
So, scout a couple of markets if you need to. Compare the prices on stuff you normally buy. Consider buying stuff you DON’T normally buy. I’d never bought “wax beans” until about six months ago, but they were cheaper than green beans and taste about the same. Variety is the spice of life, right?
First, I would wait until the supermarket had a genuine sale on what I wanted to buy.
I would combine that with a manufacturer’s coupon, if available, or a store coupon, or both.
I would buy at a market with a cash back incentive, a “club card”, if you will.
And I would make the purchase on a credit card that gave me cash back.
When applicable, I would add items, that met the criteria, to obtain bonuses the markets would set for a minimum purchase.
There was nearly always a Manufacturer’s coupon on my favorite brand of TP, and my local store was big on incentives to spend a minimum amount, so I’d often add a pack of toilet paper to my list to get the additional discounts. That’s the good news! Multiple discounts on every purchase added up!
Now, the down side: inventory control. Or the lack thereof. I had a special place to store Kleenex. I would buy it at the lowest possible price and store it in the hall closet. Turned out to be about a two year supply. I’ve purchased Kleenex twice since running out. I bought a lot of canned pasta before I retired. Stored in my kitchen cabinets. Chef Boyardee ravioli. Heat up in the ‘wave with some shredded cheese across the top. Ate canned pasta for about two years. All gone.
Toilet paper, on the other hand…storage was a little more casual. After I retired, I decided that all the TP should be in one place, so I started gathering it. Seems I’d placed it in at least six different closets, the garage and the family room. Much more than I remembered buying. I did not contribute to the panic buying of 2020, because I haven’t bought TP in the last two years. And will not again in the immediate future!
Overall, I haven’t had any money problems in retirement. I make my insurance payments on time and my mortgage payments ahead of time. I have not lacked for material goods and have had enough left over for giving to charity and gifts for my children and grandchildren and I was even able to buy a new car last December, all while eating regularly!
I would not typically recommend buying household goods and food as a cushion for your retirement, but sometimes, you have to make the best of a bad situation. I will continue to shop frugally, because then, that frees up cash for the things I enjoy. Just don’t ask me if I need any toilet paper!
Mike writes at Proof Positive