If you want to save money on groceries but don’t want to cut anything, a price book should be your frugal weapon of choice.
Making a grocery price book can help you save a lot of money on your grocery bill. What you do with that money will depend on where you are in the financial baby steps. With a price book, you’ll know when something is really a good deal and when it’s just marked as one to fool you. After a while, you’ll even know how much to get of something to last you until the next sale.
Listen to the Podcast Episode on Creating a Grocery Price Book
Amy Dacyczyn of The Tightwad Gazette fame (affiliate link) set out to record the prices at different stores. Dacyczyn noticed how much prices varied from store to store and wondered if the large number of brands and sizes for each item was really just a huge conspiracy to confuse the customer. She claims that the price book “… revolutionized our shopping strategy more than anything else we did” (p.33) and those are big words coming from the queen of tightwads.
The Moment I Became a Price Book Convert
“That’s it! I’m going to make a price book” I told my husband, as I was standing at the cooler seeing the very same can of croissant dough (a rare treat in our house) for 2 DKK less than at the other store.
My husband looked at me like I was crazy, and asked me to explain the concept of a price book.
List all the items you regularly buy with columns for each of the stores you frequent. You record the regular price at each store and the best sale price when you come across a sale and soon you’ll know exactly where to get what and when.
The Grocery Sale Cycles
Did you know that there’s a system behind when things go on sale? You probably know that certain foods go on sale leading up to a holiday (and are sometimes even cheaper after it).
That’s not the only system though. Most items have a cycle of their own where the price fluctuates from highest to lowest. For most things, it’s 12 weeks, but some are 6 and some 8. When you track the prices in a price book, you quickly find out how long it is between rock bottom store prices.
Have you ever looked at a ‘super cheap’ sales price and wondered how much you usually pay for that item? It’s no fun to come home and discover that what you thought was a great deal due to the marketing, actually cost more than what you generally spend at another store. That only leads to buyer’s remorse. With a price book, you’ll never make that mistake again.
Getting Started with Your Price Book for Groceries
The biggest secret behind a successful price book is using a format that works for you. There are four main options:
- a small spiral notebook
- a printed template in a binder (there’s a free template in the resource library)
- a grocery price book spreadsheet you can access easily on your phone
- a mobile app to keep your grocery price book list in
The key here is that you need to use a format you’ll actually bring with you to the store. I’ve made a handy template for you, which you can find at the free resource page. You can print off as many copies as you need. If you don’t know what format will suit you best, I suggest starting with the template and then customising it as you get used to recording prices.
Jump Start the Price Book Process
If you think you’ll need to go to your favourite store and spend a couple of hours recording the prices of the grocery items you buy the most, then think again. Unless that sounds like a fun way to spend a couple of hours, there’s no reason to do it.
If you have some of your receipts from the past few weeks then you are golden. If they are itemised you’ll be able to see exactly what you paid for each thing. Note the price, store and date on your sheet to get a starting point.
The store we frequent the most here is called Rema1000. I can’t be bothered to write that all the time so I just write R. The second most used store for us is Kvickly know as K in my price book. You get the point. Developing your own shorthand will not only make your entries quicker but also make you more likely to keep up with it.
Why Units Matter
Don’t just note down the price, note the amount as well.
There was a sale on 2 packs of bacon for 25 DKK ($4). Each pack consisted of 5 smaller packs, which means I got 10 packs of bacon for 50 DKK ($8). When I break that down to the unit price it gets really clear just how good a deal that was. Every pack of bacon cost me 5 dkk ($0.80).
When the bacon is not on sale, it costs 40 DKK ($6.43) for a 5 pack, so I would have spent 80 DKK ($12.86) for the 10 packs total, making the unit cost 8 DKK ($1.29). Just by having a price book, I knew I had to stock up because I was saving 3 dkk ($0.48) per unit.
You need to add the unit in amounts too. A pack of bacon is not just a pack of bacon. Some may have 100g in them and say 8 slices, others may have 125g and 12 slices. You will have to make a decision about what you are going for based on the dishes you normally cook.
Is anyone else a little hungry after all that math and bacon talk?
Price Book Recap
To recap, the info you need in your price book is:
- Size (oz, kg, ltr, product count, etc.)
- Per unit price
Keeping Your Price Book Organised
Whether you opt for the printable, a spiral bound notebook, a spreadsheet or something else, organising it is the way to success.
Break your lists down in as much detail as makes sense to you. You might want to start by department or product type, like meats, dairy, produce, cereal, toiletries, etc. Or make one sheet for just one product If you want to get really detailed.
Let it Age
Letting your money age is one of the best ways to financial success. Letting your price book age is equally important to the success of lowering your grocery budget.
At first, it seems like a lot of work to record the prices of all the things you buy and use – because it is. Stick with it for at least 4 months and you’ll really see the impact it can have on your grocery budget. You will no longer be entering a ton of things every time you go grocery shopping.
You just have to make an entry if you find a price that’s lower than the lowest price you have listed for the item. Now you’ll know exactly when to buy what and how much to buy to last you until the next time you find it at your buy-price.
Determine Your Buy-price Based on your Price Book
Determining your buy-price or target price for an item is easy. Once you make your very first entry into your price book for an item, that becomes your buy price. You now know that you shouldn’t spend more than the listed amount on that item. Every time you observe a lower price for the same item, you write it down and that becomes your new buy-price.
As Danes, we eat a lot of rye bread. A loaf of good rye bread at the store is around 15-18 DKK ($2.41-2.90). In our favourite store, they regularly have rye bread that’s close to its sell-by-date. They discount that bread the day before or the day off and we can get it for 5 dkk ($0.80).
After starting my price book, 5 dkk ($0.80) became my buy price for rye bread. Occasionally, I have to pay full price if I haven’t been able to get some at the low price (and yes, I hate when that happens).
In general, by buying the nearly expired bread and freezing it in smaller batches, we save at least 40 dkk ($6.43) a month on just that one item. This alone saves us 480 dkk ($77.16) a year.
Stock up and Embrace the Pantry Principle
As you’ve already figured out by now, the way you get the most out of your price book is to buy enough at the lowest price you’ve seen to last until the item cycles back to that price again.
If you’re used to making a meal plan and going out to buy what you need for it every week, or maybe even stopping by the store daily as you try to answer that nagging “What’s for dinner” question your children keep asking, then you will have to make some changes. You’ll have to embrace the pantry principle to really save big.
Once you start shopping based on your price book (and you start doing that the day you make your very first entry) you need to consult your pantry, fridge and freezer before deciding on what’s for dinner.
You then start buying food to replenish your pantry instead of what’s for dinner that day, week or month. Essentially, this results in a sort of in-house personal grocery store, where all the items stocked were purchased at the lowest possible price.
There’s really no excuse for not having some kind of pantry. My husband and I lived in a 28m2 (301 sq ft) studio for years and still managed to build up a functional pantry.
Pick the items you use the most or with the biggest savings and stock up on those. Get creative with where you store things. We had our pantry on shelves above the doorways. You can keep things in nice baskets if you don’t want to look at them.
The point is, you can do this no matter your situation.
It’s Okay to Opt for a More Expensive Option
I want to make one thing very clear: If you can afford to, then it’s perfectly acceptable to opt for a more expensive option if you prefer it. We do this with numerous things. One example is organic eggs, which are a good deal more expensive than regular eggs.
There used to be a time when we couldn’t afford the organic eggs and my husband made me vow that as soon as we could afford it, I would only buy organic eggs. To my husband, they signify wealth, health and doing our bit for the laying hens and making my husband happy is a good deal any day.
Don’t forget to download your free template so you can begin to save money right away.