Dec 10, 2008

Brick #2 - Do your Homework!

Ever find yourself watching Jeopardy and you get the right answer to a question with no idea how you knew? If you lived with my husband (AKA the Bottomless Pit of Useless Knowledge), you'd know :) But seriously - we have no idea how much information is actually stored in our heads until we need that little nugget of wisdom that was buried under memories of "Gilmore Girls" before it got boring.

My friend Melissa thinks I'm some kind of magician because I appear to have ESP when it comes to knowing where the best prices are and knowing what to look for. Little does she know that my "superpower" is really just the result of diligence on my part! Which brings me to this week's brick:

2. Keep a Price Book - and do your homework!

Last week you came away with your "essentials" list - those 20-odd items that your family uses with absolute regularity every week, and the foods in your diet that are indispensible. If you saved any of your shopping receipts over the last few months, you've already got the makings of a price book on the things you use most! A good price book includes the following basic information:

1. Item (you want to use specifics here - prices do vary brand-to-brand for the same item!)
2. Cost (use the cost including store discounts but NOT cost after coupons)
3. Package size
4. Unit Cost (this is VERY important info!)
5. Store you bought from
6. Date of purchase (helps track sales cycles)

There are lots of ways to set up a price book - in a looseleaf notebook, Excel spreadsheet, 3-ring binder, even a small memo pad. The internet is full of resources to help get you started - check out this printable form, or this downloadable spreadsheet version. This article from the Dollar Stretcher on setting one up has good suggestions, and Organized Home has some good templates to print for a binder. Once you figure out what will work for you, get ready for a little elbow grease!

Fill in as much as you can from the receipts you have on hand. I suggest starting only with your most essential items because otherwise the task can be incredibly overwhelming - once you have the info from the store you USUALLY shop at, you need to make a little time and expand your reading all of the circulars, even visiting other stores on fact-finding missions! When I started out, I knew that Price Rite had the most consistent low pricing of all of my local stores. So I let the hubby watch the baby for an hour, and I went to the store - I didn't buy anything, but I made notes on prices and package sizes for everything I used regularly. This became the gold standard by which all other stores' sales were measured. Over the subsequent weeks I'd watch the circulars and visit other stores...adding comparison info to my notes, until I had a great reference tool built up!

What you want to do is build a list of the lowest pricing that a particular store offers. I keep my book in a spreadsheet so I can change it easily - but if you decide to handwrite, use a pencil so that you can adjust along the way without having to rewrite everything. If in checking your circulars you find that an item on your list is going for a lower sale price than the last time you bought it (or noted the price), change your price book and note the date of the sale. If the price has been high for a while and goes back down to your lowest marked price, change the date. You'll be comparison shopping AND tracking sales cycles for your particular stores. After a while, you'll catch on to trends - maybe your market lowers the price on chicken breasts every 6 weeks...maybe only around the holidays. What you will know for SURE is when you are getting your items at their BEST price (which is a good time to use coupons for even MORE savings!) and when to stock up!

But why is unit pricing so important? As someone with a chronic allergy to math I was hesitant to do that much work. But it has definitely paid off - sometimes by breaking things down to the unit price, I find that smaller packaging is actually cheaper than bulk packaging. Figuring out the unit price points me to the truly good deals, instead of a "deal" masked in smaller sizes. A perfect example was my last diaper purchase. I usually buy BJ's brand diapers because they are cheaper per diaper than most of the rest - $0.16 per diaper for the Boy Wonder's size 4's, and the box of 152 gets me through a couple of weeks. This time, I happened to have a coupon for Luvs diapers, and I did the math just to see if it'd be worthwhile - with the coupon, the Luvs hit that $0.16 per diaper AND they came in a box of 180 - so I paid the same low unit price as the store brand, got a brand name, and a bigger box that will last me longer!

Getting started on a price book is a lot of work, but it'll become more valuable than your wallet after a while! And the more you read the circulars, note the sales, and get familiar with more than one store, you'll find that the process becomes second nature. You'll have an "instinct" for when to hit particular stores. And you'll get your own version of grocery ESP, simply because you paid attention and did your homework along the way!

Next week, I'll talk a bit about setting good guidelines, which will make scanning the circulars go even faster!

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