06 Jul On Budgeting, Oil Busts & Booms, etc.
Photo by Jason Briscoe on Unsplash.
I will confess: I love any type of food-related flipping show. Kitchen Nightmares. Bar Rescue. Restaurant: Impossible. Love ’em. I actually learned to cook by watching the British version of The F Word. (The American version wasn’t even half as good as the British one – sorry GR.) One thing I appreciate about Restaurant: Impossible is that Robert Irvine teaches the owners and kitchen staff about food costs. If you go to his website, you can find a nice breakdown of the concept:
“Typically, a package of hot dogs is 1 pound and has 8 hot dogs included. If we want to break down the cost per hot dog, we can use basic math to do so.
$4.00 per package/8 hot dogs per package = $0.50 per hot dog
We can also calculate this in a different way by looking at cost per ounce.
1 pound is equal to 16 ounces. Since we have 8 hot dogs, we can calculate ounces per hot dog as
16 ounces/8 hot dogs = 2 ounces per hot dog
Since we already know each hot dog is $0.50 we can now calculate cost per ounce as
$0.50 per hot dog/2 ounce per hot dog = $0.25 per ounce.”
–https://chefirvine.com/uncategorized/understanding-food-costing
In the same blog post, he also writes:
“The majority of you reading this however, don’t own a restaurant, so have likely never thought about food costing. You shop for your groceries, make your recipes at home, and move on. Understanding the cost of your food can make a huge impact on your grocery budget, allow you to purchase more upscale ingredients, and move you away from picking up fast foods that may seem cheap and easy, but are actually more expensive (and often less healthy) than making it yourself.”
YAAAAAAASSSSSSSSSS.
As we continue to deal with inflation – including at the grocery store – I believe it’s very important to create a budget and stick to it. And knowing your cost per meal can be truly helpful. IMHO, this is not the time to go in any store without a budget planned out. Flying by the seat of your pants financially might be OK during a bull market / boom time / hot economy, but in a recession or a period of stagflation, no.
I’ve lived through various downturns, including the Dot Com Bust and the Great Recession, and it’s not fun. I’ve also lived through boom/bust cycles in the oil & gas market and that can bring its own set of challenges. I saw plenty of people who wanted to live as though the boom cycle would last forever… obligating themselves for all sorts of things: houses, cars, trucks, RVs, boats, ATVs, electronics, giant TVs, etc. Then when the bust came, the repo men kept busy.
I remember Q3 and Q4 of 2014 and how insanely busy I was. Just like The Great Resignation, money was flying out of these energy companies like they had their own printing presses. In the summer of 2014, oil was over $100/barrel and hiring was hot (no pun intended). I even had candidates interviewing over the Christmas holidays! I also had candidates asking for large pay increases and getting them with no one batting an eye. There was an EE who asked for $70K fresh out of school and got it. If you were living in oil & gas country, you could be a lousy recruiter and make a living. If you were good, you could make good money. If you were excellent, fuggetaboutit. The world was your oyster.
But then something happened. As it ALWAYS does. Along about August or September, oil prices started to drop. Hiring remained strong because, as I’ve told you before, there is a lag time between what occurs in real time versus what is reported to the general public. So I was still crazy busy even over the holidays. But come January, what a mess. (I closed on a house in January of 2015, so I know a little something about being on the hook for a higher mortgage payment in the middle of an economic poop storm.)
Contractors were terminated left and right. Energy companies would call and ask for everyone on a contract or temp assignment with them to be termed ASAP. Some of the perm placements got the axe, too. It was awful. Having to call masses of people and tell them, “I’m so sorry to be the bearer of bad news…” is a terrible experience for everyone involved.
So why am I talking about this? Because, as GI Joe said, “Knowing is half the battle.”
Know your finances. Know your budget. Understand how you can live beneath your means if at all possible. IMO, if you can avoid getting yourself obligated for unnecessary doo-dads and gadgets RN, you’ll be better off.
I’m not a financial planner or advisor and I can’t give you financial advice. If you need professional help, then consult a professional. In terms of free resources, here a few you could check out:
https://www.nerdwallet.com/article/finance/how-to-budget
https://consumer.gov/managing-your-money/making-budget
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