This post is part of a series called “The margin”. If you missed the introduction, you can go back and read it here. In this part of the series, I will talk about building in a financial margin when you consider your budget for expenses. This is the second installment on the financial margin. If you missed the first one you can read it here.

A clarification before we begin again
After talking with a friend about yesterday’s installment, I realized my advice about the margin could be taken as a cavalier suggestion to simply spend more. That would constitute irresponsible and insensitive advice, especially when so many of us are doing the best we can with limited resources. Let me clarify, please, before continuing.
When I urge you to consider building a margin into your budget, please note, Dear Reader, I’m not suggesting that you budget or spend more than you can afford on the items discussed in this series. I’m merely asking you to think about the costs you can’t fully anticipate, and factor those in by adding a margin for error.
When you get real about the repairs your car could need, vet bills your pet could incur, the appliance that could blow at any minute, etc… you may find that there’s not as much room in your budget for the other things you’d like to spend some money on but don’t really need to. I would argue that that’s okay. If costs are going to come up that you will need to pay for regardless of whether you or not you want to, then better to cut back on cable service now and be ready to pay the mechanic, if that’s what it will take. Capice? Okay, let’s roll.
Part II: Food and clothing
1. Food
As a nation, Americans spend far less on food than people in other countries and less than prior generations of Americans (thanks in part to heavy agricultural subsidies that make much of the food supply relatively cheap). However, expenditures on food still make up 11% of our take-home income, on average, and a lot more if you’re poor. Furthermore, it’s an area in the budget where we can exercise more discretion. The choice of exactly what and how much to buy is entirely in our hands. And then there’s the whole needing-it-to-survive thing. So for many reasons, food prices matter a great deal to a lot of people. Continue reading Things I’ve learned so far: The financial margin, Part II – Food & clothing →