How to Create a Price Book
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Couponing, price-matching, and clearance browsing are all valid ways to save big money on the food and supplies you need each week. Many books are written on these tactics, but there is one, less-exciting method that is often overlooked. (See also: Grocery Shopping for the Cheap and Lazy)
What is it? A humble price book.
What Is a Price Book?
A price book is exactly what the name implies: a written record of all the prices you would expect to pay for common household goods to be considered a good value. While many people use their price books for tracking and taking notes, the main purpose of the book is to tell you — at a glance — what you should be paying at the store.
How Can You Create a Price Book?
Whether you use a spreadsheet, notebook, or app, the concept is the same. You want to have a record of the 30 to 50 most purchased items for your household, along with the best average price for each.
Starting Out
Take milk, for example. Visit your local store and write down that day's price for milk in a notebook or a "notes" page in your official price book. Whether you buy it or not, you want to record the price. If it is a sale price, and the "regular price" is listed, write that down, too. Then, each week that a sale flyer comes out with the price of milk listed, make a note of these prices. Any time you visit the store again, make note of the price of milk, as well.
After about two months, you should have noticed a trend on milk pricing, and quite possibly when it goes on sale. At the very least, you should have a rock-bottom price recorded, an average price, and a most expensive price. Your price book would then have an entry for milk with the highest price you should be willing to pay for milk, all prices considered. For many people this is usually a sale price that occurs often (at least once a week for most people given that milk is perishable) or an average between the lowest and the average price. If you see milk go on sale at 50% off during a special 4-day sale, for example, this wouldn't likely be the price you would record, since your odds of getting that price again aren't very good.
Once you have established a price for milk, the same process can be repeated for all the items on your frequent shopping list. If you are busy and can't take the time to write down prices at the store, use old receipts to at least record the prices you've already been paying for various items. Keep in mind that items with a long shelf-life can have a more aggressively low price in the book, since it's possible to stock up and buy infrequently. Lunch meats or fresh veggies have less flexibility, since they don't last as long and may need to be purchased at prices other than rock-bottom.
How Do You Use a Price Book?
Putting the book into practice is simple. Take it with you on your next shopping trip, keeping an eye out for items in your book that you don't necessarily have an urgent need for. If items are priced at or below your price book price, you buy! If you are completely out of something, and can't wait until the price is right, you may be forced to purchase anyway. By stocking up and planning ahead, however, you soon shouldn't have to resort to emergency buying (even for items like milk).
Things to Consider
- Price books are usually good for a year before they need adjusting (or more often in times of hyperinflation or when current events raise prices quickly). Revisit your pricing annually to make sure your price goals are realistic.
- Practice good inventory records at home to avoid overbuying. Even if the price is great, you don't need more than what you can consume before the expiration date.
- "First-In, First-Out" or FIFO consumption guarantees that the oldest items get used before newer purchases, further protecting your great deals from spoilage or quality issues.
Tech-Savvy Options
If you get a hand-cramp just thinking about keeping an old-fashioned, pen-and-paper price book, go high-tech with an electronic version. Snap photos of prices with your cell phone or use scanning technology to get pricing via the store's app. Import your data into a spreadsheet or document that can be accessed anywhere. (Or better yet, use an app designed to do the work for you. Value Tracker and Cart Crunch are just two options that give you intuitive price book functionality at your fingertips!)
Do you keep a price book? Tell us about it in comments!
