I read somewhere that the "optimal" approach to buying a money-saving appliance that you're not sure how much you'd use is to keep track of how much you waste by not having it; when the total of waste reaches the cost of the appliance, you buy the appliance. This way, your worst-case expenditure is twice the cost of the appliance, and your best-case expenditure is nothing. And, with this policy, it's very likely that you'll buy the appliance if it will save you money, and you won't if it won't.
This actually works for any constant factor of the cost of the appliance. You could buy the appliance when your total potential savings reach 75% of its cost, or 200%; the underlying principle is the same. Depending on your priors (how likely it is you'll keep doing what you're doing) and your time preference for money, it might make sense to adjust the factor.
Presumably whatever benefit you'd be getting more cheaply with the appliance is more valuable than the amount you're wasting by not having it --- say, having a washing machine might save you $25 a week in laundry-service costs, but having clean clothes to wear is presumably worth more to you than the $25; and having a camper bus might save you $100 a night in hotel-room fees when you travel, but presumably if traveling isn't worth $100 a night, you wouldn't be doing it before buying the camper bus.
Some other possible strategies have, in some sense, an unlimited downside. "Never buy" can cost you an unlimited amount of money --- $100 a night for all eternity, say --- and while "buy just in case" won't cost you an unlimited amount of money, the ratio between the benefit you get and the cost is unlimited. For example, you could spend $40000 on a camper bus you never use. If you use it for just one night, you'd have gotten better value for your money by spending $10000 on a really nice hotel room. (Not that this is a reasonable strategy.)
The buy-when-costs-reach-predetermined-multiple-price strategy omits a couple of significant factors, though: the cost of owning the appliance, and its lifetime. The cost of ownership can be substantial if you have a small house and move frequently, or if it requires a lot of maintenance. (This is much on my mind at the moment, because I'm living in a small apartment --- effectively an efficiency with a storage room --- and I've moved six times in the last seven or eight months; and my refrigerator and bicycle need some serious maintenance.) These are not too hard to add in to the model, though, and you still have a strategy that guarantees you a worst-case expenditure of a constant factor of the cost of the appliance.
Another case where a constant-factor extra cost gets you something valuable is error-correction coding. For some constant factor in coding expansion, you can reduce the probability of storage errors in your data to an arbitrary degree. The simplest realization of this is "disk mirroring", where you store the same data on both disks. If one disk dies, the other still has your data. (In theory. Right now, some of my data is on a RAID where one disk has died, and I haven't gotten around to replacing the dead disk, so I could still lose my data at any moment.)
It's well known that you can buy sufficient nutrition for a dramatically lower cost than a normal diet. On August 16th of last year, after the national statistics bureau had created a furor by deciding on a poverty line of about AR$6 per day, I went to Carrefour on Independencia in San Telmo to price out some food and calculate the lowest-priced macronutrient-balanced diet. Here's what I came up with. None of the prices are sale prices.
| | Soybeans | Salt | Sunflower oil | Flour | Total |
|------------------------+----------+------+---------------+-------+-------|
| g/day | 200 | 5 | 33 | 430 | 668 |
| kcal carbohydrates/day | 54 | | | 1238 | 1292 |
| kcal protein/day | 280 | | | 155 | 435 |
| kcal fat/day | 420 | | 297 | 39 | 756 |
| kcal/day | 754 | | 297 | 1432 | 2483 |
|------------------------+----------+------+---------------+-------+-------|
| AR$/kg | 7.98 | 6.30 | 5.10 | 2.48 | |
| AR$/day | 1.60 | 0.03 | 0.17 | 1.07 | 2.86 |
| US$/day (at AR$4.50) | 0.36 | 0.01 | 0.04 | 0.24 | 0.64 |
(The whole spreadsheet, in Spanish, is at http://canonical.org/~kragen/comida.gnumeric. Due to rampant inflation, Argentine prices have gone up since then.)
The idea is that you boil the soybeans with a little salt, or maybe sprout them, and use the flour, rest of the salt, and the sunflower oil to make what are called "tortas de parrilla", a sort of unleavened flatbread which is commonly for sale in the streets here, cooked over charcoal in metal pans on shopping carts. You can see that the result is hearty; what may not be obvious is that the soybeans provide enough fiber and omega-3 fatty acids to avert what could otherwise be serious nutritional imbalances, and that their protein is of an especially high biological value, i.e. its amino-acid mix is close to optimal.
There are a couple of obvious questions about this diet:
There's also the question of how much space you need for food storage.
The flour (whose extremely low price is, I think, a result of government subsidies) is fortified with a variety of vitamins as required by law. But all-in-one multivitamin pills cost about US$0.02 per day, or AR$0.09 at the time, and provide all the micronutrients we're known to need. So it's possible to solve the micronutrient problem very cheaply.
Bulk buying is indeed necessary, although all the prices above are for units of one kilogram or less. (You might be able to get better prices if you buy in real bulk.) It turns out, though, that even if you're actually so poor that you can't ever afford to buy US$5 of food at a time, you can work up to bulk buying with a constant-factor-worse strategy. If you're buying sunflower oil, say, by the 250mℓ bottle and getting a 20% worse price as a result, you can gradually build up a stock of sunflower oil by buying an average of, say, 10% more than you need. 250mℓ might last you 7½ days, so buy a new bottle every 6¾ days on average, rather than every 7½. Every week, more or less, you'll accumulate an extra 25mℓ of oil; after about six months, you'll be able to buy the 500mℓ bottle instead of the 250mℓ bottle, and your sunflower-oil investment will start paying dividends. Another year later, you'll be able to buy a liter at a time.
You could argue that this is not a realistic view of life in poverty; more typically you have no money coming in for a long time, like a month or six months, and then you finally get some, which you can use to buy things you've been putting off; and the critical thing to focus on is not efficiency but resiliency, i.e. making sure you have some way to get some food when you need it. This actually just happened to me, and I went to the supermarket and bought two kilograms of rice, some mayonnaise, butter, spaghetti, rice, pears, and so on, after living for much of the last weeks on whatever dried foods I had stored up and whatever my girlfriend bought for herself. But I'm getting ahead of myself.
The lack of variety is a more serious problem. It tempts you to go off-budget and eat an AR$5 hot dog or something, because you just can't face the thought of another lunch consisting of soybean pancakes. And there may be health problems caused by such a monotonous diet, even if they don't come from deficiencies of known macro- or micronutrients; for example, there might be a pesticide used on the soybeans that your body can tolerate if you're eating 200g of dry soybeans once a week, but not every day, or you might be getting some vitamin in a form that your body finds particularly hard to absorb.
The same constant-factor-worse strategy applies, though. If you can manage to buy 10% more soybeans than you're eating, then after a short time, on some shopping trip, you can buy another nutritionally similar low-priced food instead --- around here, that would be lentils, split peas, or garbanzo beans, or possibly polenta or whole-wheat flour. As long as you can keep buying a constant factor more than what you're eating, whether it's 5%, 10%, 50%, or 100% more, the variety of foods stored in your pantry will continue to increase, and therefore so will the variety of your meals.
(Practically speaking, you might also want to spend some of that constant factor on things other than macronutrients: spices, MSG, onions, sesame oil, herbs to plant, and so on --- things that go a really long way to rendering otherwise unpalatable dreck edible. Tonight, for example, I ate about 100g (dry) of boiled split peas, which were AR$8.50/kg and therefore cost about AR$0.85; I added an AR$1 packet of dried soup stock, which is mostly MSG and salt but also had some basil and garlic flavor, and it made a huge difference. Ajinomoto has a line of mixed-condiment packages that are similar but even cheaper. The one I used earlier today came in a package of 12 5-gram packets for AR$4.85, I believe, so each packet costs AR$0.40.)
This also gradually reduces the risk of hunger shocks where you have nothing to eat for a few days, or weeks, because of an unexpected expense, delay in getting paid, or jump in prices. That is, if applied assiduously, the constant-factor-worse strategy eliminates some serious risks to your food budget.
Building up a stock in this way also increases the probability that you'll be able to buy food when it's on sale or even gratis.
This ignores, though, the cost of storage and the limits of lifetime --- as the constant-factor-worse appliance-buying strategy does. If you eat 200g of soybeans a day and buy 100% more, 400g (or, more practically, buy 2kg of soybeans every five days), your stock of stored soybeans will grow at 200g per day. If you somehow followed this strategy for a year, you'd have 73kg of dried soybeans stored. How on earth are you going to store 73kg of dried soybeans? And stored flour will eventually go rancid, especially if it's whole-wheat flour.
This is a real limit, but it's not as bad as it sounds, unless you're bouncing from one temporary accommodation to another, as I am. (In that case, maybe you should ask a friend to store your soybeans and stuff in their house.) See below about space requirements.
Independent of how consistent or inconsistent your food buying and income is, you can adjust how much of your constant factor is going into building up a stock for the future and how much is going into buying "luxury" foods that are more expensive than the bare minimum. I think the optimum fraction for building up a stock for the future, in the absence of storage and lifetime considerations, would be about half of the total. As shown above, this is feasible if you're spending more than about US$1.28 per day on food. The total investment needed to build up a one-year stockpile would be about US$234.
No, soaking and boiling soybeans and frying up griddle cakes is not a lot of work. It requires planning and discipline, which can be difficult, but it doesn't take much time or toil.
Buying 10% or 20% or 100% more food than you would have been buying otherwise and bringing it home and putting it away is more work, but it's not much more work. It's about 10% or 20% or 100% more work. It's only a small constant factor worse.
Most people digest gluten well. Some people don't. Some people are so sensitive to it that they have to avoid it entirely or face serious health problems. Avoiding gluten increases the cost substantially, and because of the vitamin fortification, increases the risk of micronutrient shortages. From the same spreadsheet, here's my cheapest gluten-free version:
| | Polenta | Brown | Soy | Salt | Sunflower | Total |
| | | rice | beans | | oil | |
|--------------------+---------+-------+-------+------+-----------+-------|
| g/day | 240 | 180 | 200 | 5 | 33 | 658 |
| kcal carbos/day | 691 | 562 | 53 | | | 1306 |
| kcal protein/day | 108 | 58 | 280 | | | 445 |
| kcal fat/day | | 45 | 420 | | 297 | 762 |
| kcal/day | 799 | 665 | 753 | | 297 | 2514 |
|--------------------+---------+-------+-------+------+-----------+-------|
| AR$/kg | 5.56 | 5.17 | 7.98 | 6.30 | 5.10 | |
| AR$/day | 1.33 | 0.93 | 1.60 | 0.03 | 0.17 | 4.06 |
| US$/day (@AR$4.50) | 0.30 | 0.21 | 0.36 | 0.01 | 0.04 | 0.90 |
That is, cutting out gluten increases the price of the minimal diet by about 42%, to almost a dollar a day.
Earlier, I said that by buying a constant factor more than what you eat, you will gradually build up a stockpile, which will allow you to buy food only when it's on sale, buy food in bulk for better prices, and keep a wide variety of stored food on hand to avoid dangerous dietary monotony. But such a stockpile takes up space. Is it an unreasonable amount of space?
I'll investigate this, plus the question of managing stored food lifetimes effectively, in depth in another post. For now, the outline is this:
These foods will last at least a year in storage. At the 600 to 700 grams of stored food per day described above, a year's supply is about 237 kilograms. That's a small enough amount of food that you could store it under your bed, in your coffee table, or possibly in shelves that already exist. So if you're not moving around a lot, it won't take up an unreasonable amount of space.
240 kilograms is enough to have about four kilograms each of about 60 different foods, so it can provide plenty of variety.