Create a Price Book to Save Money

>> Thursday, April 30, 2009

I was supposed to be making a quick trip to Kroger for supplies for Second Son's birthday party, but something had caught my eye. “Closeout on organic spaghetti. $1.32. Awesome!”

Then I noticed the price of the organic rotini next to the spaghetti. “$1.89. That seems lower than I usually pay, but I can't remember for sure.”

I hadn't brought my price book with me, so I had to call my husband. “I need you to look something up for me. In my price book...How much does it say for organic pasta? $1.99? Great! I need to change that price, and we're stocking up on pasta!”

In a nutshell, that is the point of having a price book. So you always know how much to pay for an item. So you know if a sale is really a sale. So you can compare the price of a name brand item with a coupon to the price of a store brand item at a different store. A price book simplifies your frugal shopping experience.

On Tuesday, I posted my own price book as an example. If you live in the Raleigh area, you are welcome to use my price book to your own advantage. (And if you find prices lower than the one's I've recorded, please let me know!)

But if you don't live around here, chances are that the prices in your area are different, and you'd be better off making your own price book. So here's how to do it:

1. Choose a place to record your prices.

Many people use a notebook or folder. If you use a three ring binder to store coupons, you could put your price book at the front of the folder. You could also use an iTouch, iPod, PDA, or other handheld digital device. Just make sure it's something handy to take grocery shopping.

2. Make a list of all of the foods you buy on a regular basis.

3. Record the price of each item and the name of the store where you saw that price.

If you're not using a digital medium, you should write the prices in pencil so you can erase the entry if you find a lower price.

Remember that your completed price book should only include the lowest price you can find for an item. There's no reason to know that you can get organic flour for $4.69 from Whole Foods and $4.89 from Kroger. You only need to know that you can get it for $4.20 through your buying club.

There are two methods for completing this step.

  • Head to the grocery store and walk up and down the aisles, recording prices as you go. Then, go to another store and check out the prices there, changing your entries if you find lower prices. Repeat at every store you might shop at.
    • Advantage: You can knock out your price book in a weekend and start saving money quickly.
    • Disadvantage: This method requires sacrificing a few days and is best done without kids (unless you have really good kids who love to grocery shop).
  • Do your regular grocery shopping. After each trip, analyze your receipts, recording prices as you go. Also, record prices from sales flyers.
    • Advantage: You'll create a price book without taking much more time than your usual shopping trip, and you can do it with the kids in tow.
    • Disadvantage: This method takes much longer, especially for items you don't buy on a regular basis. Also, you might miss lower prices at stores you don't visit often.
4. When you find an item priced lower than the amount recorded in your price book, make a note of it and stock up.

However, I don't change the official entry in my price book unless I've seen that price more than once. Sometimes stores put an item on sale to quickly get rid of overstock or because they're not going to sell that item anymore, and I may never see that item at that price again. For instance, the $1.32 organic pasta I bought from Kroger was a closeout price, and I probably won't see it priced so low again. If I do, I'll know it's a regular thing and I'll change my entry.

5. Never buy food for more than the price you've recorded in your price book. You know you can get it for that price, so why would you pay more?

Advanced Method for the Obsessively Organized

In my price book, I also included the approximate amount of each item I use in a year. This information is valuable so I know how much to stock up when I find a good sale.

You could also calculate the unit price for each item, which would make it easier to quickly compare prices of items in different size packages.

(Note that in my price book, there's a column listing prices in cooking units – tsp., Tbsp., cup, etc. This information is so I can calculate costs of recipes, not so I can compare prices. If you're going to calculate unit prices to compare costs, you need to calculate the cost by weight – ounces, pounds, etc.)

And that's it! Creating a price book might be time-consuming at the start, but it will end up saving both time and money overall, so it's definitely worth it.

Do you have any tips for creating a price book?

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