Making a 21st Century Price Book

If you're serious about saving money on a regular basis, knowing the prices of the items you buy is essential. How else will you know when you've found a deal?

I've come across several articles online recently about how to use a price book to help you know how much to pay for various goods. These articles usually tell you to make a physical "book" by listing the items you buy, the various brands of the items, the prices, and where you found the item. This is a tried-and-true technique for sure, but the legwork involved in setting up a price book can be daunting.
I've found a way to streamline the process. Here's how to construct a much simpler and highly-effective price book. These instructions are based on how I've kept track of diaper and formula pricing over the last six months (see the sidebar):

First, here are some truths about sales and pricing that I've discovered:

1. Stores are predictable. They have one "best price" sale price that comes around every couple of months. They have a "good sale price" that comes around more often. Pampers, for example, has a sale price that ranges from $7.99 on the low end to $9.50 on the high end, but the most common sale price for Pampers is $8.99.

2. Every item tends to go on sale at least once every six weeks.

3. Manufacturers send out coupons when the old ones expire (every month or two).

4. Some brands go on sale more often than others. Some brands put out coupons more regularly than others.

5. Some stores have incentives that bring down a higher on sale price. For example, CVS has ExtraCare Bucks that give you 2% back, and Target occasionally gives out gift cards if you buy two packs of a specific diaper.

I suggest using a spreadsheet for the list and transferring the pertinent info to a PDA. If that's too tech-y for you, get out some paper and a pencil. Start with just a few items you buy regularly and are willing to stock up on. Make a list of the item and the brands you are willing to try (including store brand, if applicable). Most people have favorites or at least preferences when it comes to brands. For example:

Toilet paper - Cottonelle
Paper Towels -Any
Dog Food - Iams
Laundry Detergent - All, Tide

Each time the circulars come out (usually on Sundays), write down the best deals for the items on your list and the store(s) that has them. Only consider the deals at stores you're willing to visit (remember, spending a dollar in gas driving there is like adding a dollar to the cost of the item). I regularly visit four stores, but they're all within five minutes or less of each other.

Again, you don't need to write down the date, the prices at all the stores, or even for all the brands. Just make a note of the best deals. Then get out your calculator and figure out the per-unit pricing (it's the only way to compare apples with apples). Try to use the same units you see on the shelf tags at the stores. If you're using a spreadsheet, write a formula to do the division for you. For example:

Cottonelle - $5.99/12 double rolls (528 sq ft ) Per unit: .50 / roll, .01 / sq ft.

If you don't have access to the circulars, you can get them online for most stores (see "check the ads" on the sidebar). Sometimes it's even easier to use the online circulars because they have a "search" feature. Sometimes you can even sign up to have them delivered to your email inbox or subscribe to an RSS feed (click here for more info on feeds).

If you don't want to use the circulars at all, try shoplocal.com and thecouponmom.com. Simply enter the item you're looking for (I recommend searching for the specific brand to weed out weirdo results) and the sites find the local deals for you. Just make sure these sites search all the stores you visit. Click here for my previous post on how to use shoplocal.com and thecouponmom.com.

You'll also need to write down the storebrand price for items you're willing to go generic on. Storebrands don't go on sale as often (and you don't get coupons), but they don't need to. As is the case with Target-brand diapers at $5.74, sometimes a storebrand price will beat any advertised deal no matter how good it is. Don't assume, though, that with careful shopping and coupons you can't beat it.

Do this every week for two months and you'll quickly figure out how to tell a good sale price from a really good sale price. You'll also learn whether or not it makes sense to stick with storebrands for the items on your list.

The trick is to spend the low end sale price--never more--for this item. And to use coupons whenever possible. Try to have a month to six weeks' worth of that item on hand at all times and you'll never be stuck paying full price. Another benefit of stocking up is that you have a better chance of getting a coupon sometime between purchases.

Finally, write down your best deal price and per unit pricing on an index card and put it with your coupons. I like keeping mine on my PDA because then I have a calculator handy, too.

I have a feeling all of this sounds like more work than it actually is. Remember, all you're doing is writing down the best deals you see for the item(s) you want to track and enough details about the item(s) so you won't be fooled by bulk buys, for example, that aren't a bargain. Once the initial work is done, you'll simply make adjustments when you find a better price on an item so that you'll always know the rock-bottom price.

To be honest, I actually enjoy this method. I think it's the thrill of the hunt and the little endorphin buzz I get when I score a killer deal.