While the U.S. holds its breath to see if the government bailout of the banking industry works, or if the country is headed for a Second Great Depression, you don't have to sit around and wait and see if the economic mess will affect you (or rather, HOW it will affect you). A bad economy eventually trickles down and affects everybody. If you aren't directly affected by the loss of a job or by taking a hit to your stock portfolio (my stocks have been hammered...actually ALL stocks have been hammered...but I'm still buying stocks on the cheap. They will recover...eventually) then someone who buys from you or your business or provides a service to you may be affected. Either way, it's best to be prepared for any worst-case scenario.

By now, you may have taken steps to get out of debt and reduce the amount of your regular monthly spending. For a lot of people, that means starting with something they can easily control, such as their family's food and grocery budget.

Over the past five years, I have had to double the amount of money my family spends on groceries. Food costs have skyrocketed, particularly meats, dairy and produce. Still, there are ways of making your food budget stretch, and there are a few staples that should be in everybody's "emergency pantry":

Stock up on cheap dry goods: I can buy 50 pound sacks of rice and 25 pound sacks of dried beans at some of our local Asian and Hispanic grocery stores, and the price is still cheap. Rice and beans can be used for numerous dishes, and if store properly, will last for months and months.

The Dollar Store is Your Friend: I actually buy a lot of canned grocery items at the Dollar Store. The food is comparable to what I would find at the supermarket. In fact, a lot of Dollar Store items are just overstock items from supermarkets. Recently, I got salad dressing, balsamic vinegar, pasta, spaghetti sauce and roasted red peppers from the Dollar Store. I would have paid much more at the supermarket. Just make sure that you couldn't actually get the items cheaper elsewhere before purchasing them at the Dollar Store. It's possible some items could be less than a dollar somewhere else.

Make meat a side dish: For the most part, the U.S. is a "meat and potatoes" culture. Meat is expensive to produce, and lately, expensive to buy. Purchase and prepare meat sparingly. Use meat as an ingredient to soups, stews, sauces or chili. Use it as part of a casserole. Or, get your protein sources from things like beans or tofu. Meat is a huge part of the grocery budget.

Purchase powdered milk: I always have powdered milk in my pantry. I mainly use it for cooking, not for drinking. However, when I purchase powdered milk, the liquid milk I purchase at the store for cereal or drinking lasts longer, because I'm not dumping it into my cooking or baking recipes.

Make cheap items go further: This is where the soups, stews and casseroles come in handy. There is a link to the Campbell Soup casserole page at SavvyFrugality.com. One site, HillBillyHousewife.com, has an emergency menu which can be used to feed a whole family of 4-6 people for $45 per week.

Ditch the snacks: Most Americans eat too much food in the first place. I was one of them. I recently lost nearly 30 pounds, mainly by ditching snack foods and walking more. Stick to three square meals a day. You'll save money by eating less food, and your waistline will show improvement.

We'll continue our series on Emergency Saving tomorrow, when we discuss saving money on automobile expenses.


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