Saturday, August 18, 2012
I recently came across information on the National Standards for Food, Clothing and Other Items that the IRS uses when trying to figure out how much people can afford to pay when trying to make up for back taxes.
According to the page
National Standards have been established for five necessary expenses: food, housekeeping supplies, apparel and services, personal care products and services, and miscellaneous.
The standards are derived from the Bureau of Labor Statistics (BLS) Consumer Expenditure Survey (CES) and defined as follows:
Food includes food at home and food away from home. Food at home refers to the total expenditures for food from grocery stores or other food stores. It excludes the purchase of nonfood items. Food away from home includes all meals and snacks, including tips, at fast-food, take-out, delivery and full-service restaurants, etc.
Housekeeping supplies includes laundry and cleaning supplies, stationery supplies, postage, delivery services, miscellaneous household products, and lawn and garden supplies.
Apparel and services includes clothing, footwear, material, patterns and notions for making clothes, alterations and repairs, clothing rental, clothing storage, dry cleaning and sent-out laundry, watches, jewelry and repairs to watches and jewelry.
Personal care products and services includes products for the hair, oral hygiene products, shaving needs, cosmetics and bath products, electric personal care appliances, and other personal care products.
The miscellaneous allowance is for expenses taxpayers may incur that are not included in any other allowable living expense items, or for any portion of expenses that exceed the Collection Financial Standards and are not allowed under a deviation. Taxpayers can use the miscellaneous allowance to pay for expenses that exceed the standards, or for other expenses such as credit card payments, bank fees and charges, reading material and school supplies.
Here’s the table of expenses for up to four people across all categories.
|Expense||One Person||Two Persons||Three Persons||Four Persons|
|Apparel & services||$86||$162||$209||$244|
|Personal care products & services||$32||$55||$63||$67|
I checked my stats for this year, and my total for food, including restaurant food eaten when I’m too lazy to cook and also the money I spend on food for Scrap Exchange Third Friday (full details on that below), is averaging out to $153.80 a month ($86.86 grocery store food + $27.04 convenience food + $39.90 Scrap Exchange food).
The amount of money I spend on restaurant food because I’m too lazy to cook moves in lockstep with how much work I have going on — when I’m working more, I’m much more likely to eat out. This is because (a) I have less time/energy to devote to shopping and cooking, (b) there are more days when I’m out and it’s easier for me to get food out than to come home and get food, and (c) I enjoy eating out occasionally and if I am making money, it’s harder to talk myself out of it.
The Scrap Exchange food situation is more complicated.
The Scrap Exchange has a monthly gallery opening that I started providing food for a few years ago. We have a monthly budget of (I think) $60 for food and drink. When other people were handling the food, they would buy food and submit the receipts and get reimbursed. However doing it this way seemed inefficient to me, there tended to be a lot of waste and also I felt like we were spending kind of a lot of money for not such great food. We would have leftovers that no one wanted to take home, and then the next month we’d start over from scratch.
So a year or two ago I decided to take things into my own hands and handle the food shopping and prep myself, and make things I like, so that if anything is left over, I can bring it home and eat it with the rest of my regular food. I also started buying soft drinks in cans instead of two-liter bottles, so if they didn’t get used up we could bring them back next month instead of having half-full bottles of flat soda pop filling the refrigerator in the party room. (I also dream getting what I need to use the leftover wine to make vinegar, but I haven’t managed to get that going yet.)
This has generally worked well, we have good food at the openings and for the most part I enjoy doing it — not to mention the fact that I have an excuse to make things like homemade Snickers bars and graham crackers. However the overall strategy has made my accounting somewhat complicated.
If I have Scrap Exchange pay for everything, even though I’m bringing leftovers home and eating them, then my grocery bills will be artificially low. (Plus it feels weird to me to have Scrap Exchange paying for my groceries.)
If I am paying for all of it myself, but giving a bunch of it away, then my grocery bills will be artificially high. (And I am using my grocery money to feed half the town, which doesn’t feel quite right either.)
The compromise I came up with is to track the spending and bill Scrap Exchange for it quarterly based on what we used and what I ate.
Things that I know I will not use at all — like wine and ice — I code to “reimburse” and that doesn’t go onto my books at all. Things that I use some of for Scrap food and some of for my food — like butter and brown sugar for cookies, yogurt and sour cream for dips, etc. — I prorate based on how much I used for Scrap and how much I used for me. Things like pretzels and crackers that we use at Third Friday but don’t get completely eaten and then I eat the leftovers I also prorate. Things we use all of at Third Friday, I put at 100% reimburse. Then I do a quarterly accounting and submit an invoice.
Yes, I know that is a ridiculous system. It is hard being me.
This is the first year I’ve used this approach — last year I just bought food and made it and donated all of it. This year, for a variety of reasons, I decided I needed to keep better track of it.
Overall this is raising my grocery expense because I’m buying and eating things that I wouldn’t get if I weren’t making food to serve at an opening — things like chips and pretzels and crackers that are generally more expensive than most things I buy. (It is also not so great for my waistline, though that’s a separate issue.)
It’s worked out to about $80-$90 a month for my food and $40-$50 for Scrap food, for a total of $130 a month, which does not seem like an unreasonable amount to spend on food, especially given that there is a big party in the middle of every month with nice snacks that I share with anyone who wants them.
And now I will return to the point of this post … apologies for the digression … which is to say that even with my Scrap Exchange food, I’m way below average, spending just about half of the national average for one person. However I’m considering trying to spend $301 on food next month, what the IRS says is the “national standard” amount, to see what that looks and feels like. It actually seems like kind of a challenge, I’m not even sure I’d be able to do it.
But I’m thinking about it, it might be interesting.