Price Books for the Digital Age

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I’m lazy. Let’s get that over with.

One of the current things I’ve seen going around the personal finance community is the idea of a “Price Book”. And there are some great tips for building your price book already out there. However, once again I am lazy. I know up-front I’m not going to carry that book into the store, I’m not going to write down prices, and I’m not going to spend a ton of time on something that saves me pennies.

Enter the internet, and the magic of receipts. Spending an hour each weekend the past month, I’ve managed to get a good idea of what deals I should be able to get. I’ve also easily expanded this method to clothing articles like underwear and socks. Of course, the most important thing is finding out what will work for you, but in the interest of increasing the ideas out there, here is how I did it (and am still doing).

1. Write down items that you buy often. For me, things like bread, cereal, milk, fruit, and meats went here, along with canned vegetables and things like laundry detergent and toiletries. However, cross the cheap items like bread off the list. I know that generic bread costs $0.99 or so, and I can spend more if I want. There’s no reason to spend an hour trying to save five cents on bread. The opportunity cost doesn’t add up. List items that are reasonably expensive (detergent) or that you buy many of at one time (canned vegetables).

2. Make sure you visit a different store each week (or each few days if you shop several times per week). Grab the store’s flyer while you’re here, and be sure to either purchase or write down prices for each thing on your list. If you purchase something, the price is on your receipt, so you don’t have to worry about writing them down. If it’s in the flyer, you don’t have to write it down. See, it’s all about being lazy.

3. Check prices online. Many stores put their circular (the sales flyer) online, so you don’t even have to go inside the stores or make a trip. I imagine you can do a decent price book from the comfort of your desk chair. Also check online bulk retailers such as Amazon, especially for things like laundry detergent, toiletries, and diapers. You may find it’s just as cheap to purchase online and get them shipped directly to your door!

4. Break open Excel, make a list of each product on the left, list each store along the top. Fill in the grid with prices. For the lowest price of each item, highlight the cell yellow. For those with experience, you may be able to use conditional formatting and basic functions to automate the highlighting

5.  Pick two stores that seem to have a good mix of prices. For example, if Wal-Mart seems to have good prices on toiletries, and Publix has good prices on food staples, it’s not a bad idea to visit both, especially if they are both nearby your house. Going 7 different places, however, is not a good idea; you spend more in gasoline than you save. If you can get almost everything cheaper at one store, just choose the one store. If you can save money buying online, then do that.

6. Compile and print a list of each item and their respective price. I was able to shrink it down to the size of a business card. This way, if you happen to be at a store and see a cheaper price or sale on one of your products, you can buy it right then, or if the price is permanent you can make a note to update your Excel file. Keep in mind your list is better if it includes things that can sit in the cabinets for awhile, like canned goods.

7. Pay attention to seasonal trends, especially when it comes to fruits and vegetables. You may choose to track the prices of items over time and realize that it may be cheaper to buy strawberries in winter and spring, and switch to bananas for summer and fall, or vice versa. Know and adjust your purchasing trends accordingly. Baking goods may go on sale after Thanksgiving and Christmas due to surplus, so you may stock up on vanilla extract, baking powder, and things like that. Your Thanksgiving turkey may actually be cheaper in spring, so if you have the freezer room, you may purchase early (though this doesn’t mean a deep freezer will pay off).

I have found that things like socks, underwear, toiletries, and such are usually cheaper online. I’ve also found that buying in bulk does not save money for the things I purchase; going to a CostCo makes me spend more by purchasing things I would not normally get. For others, it may save them money on everything. The point is to make no assumptions; you may be able to get everything cheaper at Wal-Mart, someone else may find the local grocer has everything for cheaper. You may have a store nearby that is always cheaper, but is too dirty for you to walk inside. That’s ok. You may love the convenience of online shopping even if it costs a few more dollars. That’s perfectly fine. Know what you’re willing to do, and what you’re willing to sacrifice. I’ve found that just by sitting down and taking a look at the small prices, you can easily save $10 on weekly shopping. It’s the concept of small changes adding up quickly. That’s $40 per month in savings, which is quite worth the few hours it takes to accomplish.

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