by Christopher A. Straub Henley & Straub LLP
In keeping with this issue’s theme of all things culinary, this article is about the financial side of keeping the family fed and watered. Our two eldest kids are both developing an interest in cooking. In between helping them decipher the recipes (“what’s a cardamom?”) and explaining the lethal danger of the immersion blender, my wife and I have been trying to teach them about the dollars that go into every meal, and how to make choices at the grocery store that stretch those dollars as far as possible.
When we go to the grocery store, we tell the kids to ignore the overall price of shelf-stocked goods, and focus instead on that little teeny number at the bottom of the grocery store label. This number, we explain, tells you how much the product costs per applicable unit (100 grams, millilitre, etc). It’s a great way to show kids the concept of purchasing power: even though the little jar of mayo has a lower overall price, it is significantly more expensive per millilitre than the big jar.
The concept of purchasing power extends through to any number of financial transactions – even ferry tickets get cheaper when you buy them in bulk. But this inevitably brings us to the issue of carrying costs. In a business context, carrying cost refers to the costs associated with storing excess inventory – costs like refrigeration, warehouse space, etc.
In the household context, it is the cost associated with buying more of something than you need at that moment. Those costs can range from credit card interest (“hmmm … maybe we didn’t need that whole pallet of Cheetos …”) to storage costs (yes, it’s cheaper to by half a cow than it is to buy individual steaks, but then you need a new freezer) to food spoilage (that five pack of romaine from Costco isn’t so cheap if you only get around to eating two of them).
We explain to our boys that the key to getting the best bang for your buck at the grocery store is to pay attention to the “little numbers” on the price label and to balance the cheaper option against the potential carrying costs.
This sounds like a pretty bland exercise, but when they’re in the store figuring out their dinner budget, they catch on remarkably fast. The sound of an eight year old muttering “we’re never going to eat that much hot sauce” in the middle of Thrifty’s is music to my ears.
Through their adventures in cooking, I’m proud to say that our kids not only know what cardamom is: they also know that the cost per gram is off the charts, so they’d better measure carefully!