Monday, February 12, 2007

The Price Comparison Book

When it's time to conserve money in a household, the person responsible for family meals naturally thinks of the grocery bill as an area where pennies can be pinched. The food budget, along with the entertainment budget, is one area where we have enormous latitude in how much we spend. Other large monthly expenses, such as rent or mortgage payments, are much less flexible and farther from our immediate control.

I can't recommend the practice of a price comparison book highly enough to anyone who is trying to trim expenses. It makes sense to price all of the grocery and toiletry products you buy at all of the stores you buy from on a regular basis. The value of this practice is that no one can give you better information on the products you buy in your own area than you can gather for yourself. It's free to gather this information, and it will pay off in spades. A detailed price comparison book allows you to tell the difference between a marketing ploy advertisement and a really good time to stock up on something you'd be buying anyway.

It's okay to start small. Rome wasn't built in a day; it will take a while to gather all the information to transform an ordinary notebook into a powerful storehouse of information. But start today. Get a little notebook and start recording the prices of things that you buy at the store from now on. Record the information in a way that makes sense to you. I keep track of things alphabetically, but you may choose to group things by categories, such as "produce," "baking," "frozen," etc. If you have extra time, walk through the store and write down the prices of things that you buy regularly, even if you don't plan to buy those items on this store visit. This will allow you to buy wisely the next time you need to buy that item. If time is a precious commodity for you, just record the prices of the things you bought based on the store receipt. Keep close tabs on the prices of various items for at least four months. Don't make a special trip to check prices at a faraway store you wouldn't normally shop at. Chances are that any potential savings will be eaten up by the extra gas it takes to get there.

If you are actively gathering information by walking the aisles each time you shop, you should have a very useful collection of information after just a month or so. It will get much better after four months. If you have time just to record the prices from receipts, you should still have good information after a couple of months.

Let me give an example of some price comparisons in my book. Hebrew National reduced fat hot dogs are an easy, reasonably healthy, and cheap meal when I'm ravenous and have no leftovers to heat up. Also, they conveniently store very well in the freezer for months at a time. I started pricing these and was astonished at the range of prices for this standby emergency meal of my home. Here's what my price comparison book showed me:
  • Wegmans regular price: $3.79/12 oz. = $5.05/lb, or 54 cents/serving
  • Giant regular price: $4.79/12 oz. = $6.39/lb, or 68 cents/serving
  • Trader Joe's regular price: $3.49/12 oz. = $4.65/lb, or 50 cents/serving
  • Weis/King's regular price: $3.99/12 oz. = $5.32/lb, or 57 cents/serving
  • Military commissary price: $2.89/12 oz. =$3.85/lb, or 41 cents/serving

As you can see, I like crunching numbers. Gathering this informaiton showed me that the commissary had by far the best price for this item. I can only stock up there via a relative who makes semi-annual trips to the base. The next best price is at a Trader Joe's an hour's drive from my house. This means that I only go when I can carpool with a relative and we end up going there no more than once per month. That's fine for me because I have a large chest freezer and it's easy for me to store a lot of hot dog packages. However, recently Wegmans had a sale on these hot dogs, offering the same pack at just $2.99, for a serving cost of just 43 cents. With four months of data at my fingertips, I knew for sure that this was an excellent price, almost the best available to me from any vendor. So I bought eight packs of hot dogs: the amount I thought we could eat in six months. I also told my mom about this sale. She stocked up on the hot dogs too so she has a cheap meal for my young nephew when he stays at her home.

Your own price comparison book can only be compiled by you. Only you know what foods and toiletries you buy regularly and only you know which stores are convenient for you to shop at.

3 comments:

Sheri said...

It's great to see someone who talks about shopping at stores I recognize for a change. I was beginning to think I was the only frugal person in SE PA! I see Kroger and Meijer and Dillons mentioned on just about every other frugal blog I find. But I must say I was surprised by the fact that Giant had the highest price for the hot dogs. It's time to start my own price book I think.

Danielle said...

Wow what an awesome idea. I am trying to live really cheaply - not because I have to, but because I hate wasting money!

I was having a look around your website and have found some good ideas. Thanks so much. I visited LA once and they had a Trader Joe's there, it was really great. We don't have shops where you can buy stuff in bulk like that in NZ but I think this price comparison book is really going to save me some money :D

Kate said...

Danielle, welcome. I'm surprised to hear that NZ has no bulk shops. What a pity! I'm glad you like the price comparison book idea, and I hope it serves to save you a good bit of coin.