A weak dollar and growing economies in emerging markets (like China and India) continue to send food and energy prices higher and these factors are unlikely to change anytime soon.
The question is when is stockpiling supplies a good investment of your time and money?
According to the government, inflation is 4.2% while bank saving interest rates are averaging 1% and bank CD’s are about 3.5%. Putting your money in a bank CD will result in a return on your money that is just under inflation – at least according to the government. Some economists argue that inflation is actually more like 8%-10%.
Stockpiling supplies is about betting against future prices. If future prices continue to raise 3-6 months from now, you can save money by stocking up on supplies today. To get started, you need to find a place within your home to put your items. Then, you need to add some shelves for organizing your items.
There are several ways that stockpiling supplies can save you money, here are a few;
- You can save money by getting lower prices today for items that would cost more in the future.
- You can save money on gas, by taking fewer trips to the store
- You can save money by taking advantage on discounts when buying in bulk
What items can be stockpiled?
Lots. The real question is what items cannot be stockpiled? Most household items, excluding perishable food items, can be stored. Here is a short list;
- Foods: Canned fruits and vegetables and soups, boxed and bagged food items, bottled water
- Papers: Paper plates, cups, towels, napkins, toiletry
How much money can be saved?
The money that can be saved depends on how fast prices (and gas) are increasing. If you reduce your trips to the store to one per week and save an average of $20 per shopping trip, you are perhaps saving $25 per week, or $100 per month – which is about $1200 per year. Inflation on food and energy is closer to 30%, therefore you are saving as additional $1200 x 30% = $360 per year, bringing your total savings to $1560 per year.
What can go wrong?
Stockpiling supplies does have some drawbacks and sometimes you can lose money. For example, food items may expire before you have a chance to eat them or something may spill and contaminate several other items within the storage area. The best way to avoid these pitfalls is by trial and error. For example, if you buy too much of something that goes bad, you have just learned an important lesson. Over time, you will make fewer mistakes as you learn what items your family consumes and what items give you the largest savings.