Friday, February 16, 2007

How to save by costing your meals

Yesterday I posted about baking at home to save money on breakfast items. I wrote about comparing the price of my favorite store-bought cereal to morning glory muffins and other goodies I baked at home. Today I'm going to explain the costing process in detail, in case others want to know exactly what a given meal is costing them per serving. To do these calculations, you'll need a kitchen scale and a calculator.

Let's start with costing a serving of breakfast cereal, because with only two ingredients to measure and price, this is a fairly simple cost analysis. I used to eat Special K red berries cereal with organic milk. To figure out how much each serving cost me, I first calculated the cost per ounce of the cereal, which is sold by weight. (I no longer have a copy of my own calculations, so I'll work with hypothetical figures from here on.) Checking my price comparison book, I saw that the best price I could find for this cereal was at a wholesale shopper's club, at $3.41 per pound. That works out to about $0.2131 per ounce. Then I calculated that my organic milk was costing me about $0.39 per cup. This is just a little complicated here, because we're mixing weight pricing with volumetric pricing. But bear with me.

Next, I used my kitchen scale to find out how much cereal I consumed on an average morning. The portion sizes indicated on the side of the box were irrelevant to me. I needed to know what I actually ate - not what the marketing wonks "recommended." My kitchen scale has a tare function on it. That means that I could set my bowl on the scale, and set the weight to zero, so that the scale ignored the weight of the bowl and only paid attention to the cereal I was about to pour in. Let's say that my serving size was 4.6 ounces. Then I poured a cup of milk into a clear graduated measuring cup. I poured milk into the bowl as I normally would and measured what was left: a little less than 1/4 cup. I called that 0.8 cups and sat down to eat my cereal.

When breakfast was over, I ran a couple of quick calculations. Multiplying my 4.6 ounces of cereal by 0.2131, I found my cereal cost of about 98 cents. Taking 0.8 cups of my 39 cents per cup milk, I found that the milk for my cereal cost me about another 31 cents. Thus, my cost for breakfast that morning was $1.29. This of course excludes miscellaneous costs like washing the breakfast dishes or the gas needed to go buy the groceries. It seemed to me that $1.29 per day was a good starting point, and that I could surely find ways to save money on this meal.

I moved on to costing some of my own baked goods. With a lot more ingredients, these items were much more complicated to price out. Some of the items I wasn't able to get an exact price on at all, so I had to estimate for those costs. Below, I've tried to show how I did it.

Morning Glory Muffins

3 cups organic white flour 0.938 lbs x $0.745/lb. = $0.655

1 cup organic whole wheat flour 0.344 lbs x $0.81/lb. = $0.279

2 cups organic white sugar 0.925 lbs x $0.84/lb. = $0.777

1/2 cup organic steel cut oats 0.188 lbs x $0.74/lb. = $0.139

4 tsp. baking soda (unknown price)

4 tsp. cinnamon (unknown price)

1 tsp. salt (unknown price)

4 cups grated organic carrots 1 lb* x $0.798/lb = $0.798

1 large organic apple, grated 0.77 lbs* x 1.99/lb = $1.53

1 cup organic raisins 0.3125 lbs x $2.59/lb = $0.81

1 cup organic walnut pieces 0.288 lbs x $8.51/lb = $2.447

1 cup organic unsweetened coconut flake 0.1 lb. x $2.71/lb = $0.271

5 large organic eggs 5 x $0.241/each = $1.20

1 1/2 cups organic vegetable oil 12 oz. x $0.244/oz. = $2.933

4 tsp. organic vanilla extract 0.660 oz. x $1.998/oz. = $1.33

Spray oil for muffin tins (unknown price)

*Note that I needed to weigh the carrots and apples before I peeled, trimmed and grated them. I didn't use the scraps to cook, but I still had to pay for them. So I needed the entire weight to calculate my costs.

You can see that I had some gaps in my price chart. I didn't have a good way to calculate the exact cost of the small amounts of baking soda, cinnamon, salt and spray oil. I knew that cinnamon is a fairly expensive product, while all the others are relatively cheap. To come up with a figure, I made a wild guess and put down 50 cents for all these ingredients combined. If I come up with a good way to exactly figure these prices in the future, I'll revise my cost analysis.

So adding up all the known costs plus my estimate, I came up with a total cost for the entire batch of muffins of $13.669. When I baked off this double batch of muffins, I got 35 muffins out of the batter. So I divided $13.669 by 35 to come up with my cost per muffin of about 39 cents each. This seemed fantastic to me. By eating one muffin instead of a bowl of cereal, I could save 90 cents each day.

But doing all this analysis also allowed me to see just how much some of these ingredients were costing me. The vanilla and walnuts were among the most expensive ingredients in the recipe. I didn't want to take out the vanilla, because I suspect it adds a lot to the recipe. But I had to admit that the walnuts really weren't all that noticeable in the muffins. So the next time I made the recipe, I left them out. Neither my husband nor I seemed to miss them. I recalculated and found that my price dropped to about 35 cents per muffin.

Since then I've also costed out the recipes for my apricot-oatmeal buttermilk scones and English muffins. The scones come in even cheaper than the morning glory muffins, at about 30 cents each. English muffins on their own cost me only about 11 cents to make, but I haven't yet figured out what the butter and jam costs. And besides, they aren't the healthiest breakfast, so we don't eat them all that often.

I hope this explanation is helpful to someone out there. You can apply the same procedure to any meal you prepare at home, so long as you have gathered the pricing information on the majority of the ingredients. Please leave me a comment if you have any questions or remarks.

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