One of the first things I did when I adopted a lifestyle of Savvy Frugality was to take a close look at the money I was spending on recurring expenses, such as groceries, household bills, gasoline, etc. I figured if I could save even $20 a week by ensuring I was paying the absolute lowest price for these items, I would be well on my way to living below my means.

I started using what a lot of frugal zealots call a "price book". For me, it was a simple spiral bound notebook that I used to keep track of the prices of items like a head of lettuce, a can of coffee, cereal, bread, milk, etc. After writing down the price that I usually paid at my favorite grocery store, I kept my eye out for prices that would beat it. Eventually, I was able to identify the 2 or 3 stores that consistently had the lowest price on the items I normally bought. Often, it was a store brand, but sometimes it was an item I could get during a sale, or with a coupon.

This method can be used for non-grocery items as well. I kept track of my monthly phone usage, and then found a VOIP plan which consistently beat the cost of my land line phone. I even kept track of the price of socks and underwear. That may sound extreme, but I have been able to save hundreds of dollars each year by keeping track of the lowest price, and only shopping at the stores which offer them. Those "convenience" trips for bread, milk, eggs, etc. can be budget busters. I eventually got to the point where I had a lot of prices memorized, and didn't need the price book.

Now I'm about to revisit the price book. I have a couple of major ticket items at home which will need replacing within the next year. My refrigerator is a model I purchased used for $80. It still works, but it's becoming more difficult to regulate the temperature. The items in the back on the top shelf freeze if they are left there too long. I can't help but think this older model is also costing me more money on electricity. And, since we are moving, my wife wants to get a new refrigerator which has an ice and water dispenser.

This isn't an expense I take lightly. I'm going to start saving $50 from each paycheck, and keeping track of the price of refrigerators in my price book. Once I locate the store which consistently has the lowest price on the model I want, I will make a purchase when I have saved enough money for it. I won't be putting this on a credit card. I'll pay cash.

The other items we'll need in the next year or so are a TV set and a computer. They both work, currently. The TV is 11 years old, and it the tube-type model. My last TV, which was a similar model, lasted about that long before the picture tube went out, so I figure it is just a matter of time before it will need to be replaced. The computer is also several years old. It works, but doesn't have the features, disc space or memory newer programs require. I'll also be setting aside money for these items as well, and keeping track of the best prices in my price book. Between these three items, I should be able to save several hundred dollars by being patient, shopping around and buying when the time is right.

The price book method isn't for people who want instant gratification, but it can definitely save you a lot of money in the long run.

3 comments

  1. MP // January 10, 2008 at 7:42 PM  

    If you have the cash, why not put it on a credit card to get the miles/rewards/etc., then pay it off pronto for a credit rating boost?

  2. SavvyFrugality // January 10, 2008 at 8:50 PM  

    You could do that, but I prefer to use credit cards sparingly. My cards don't have miles or rewards, and I prefer to keep the balances low, if I carry any at all. For me, and this may not apply to everybody, using cash is best in order to avoid racking up debt, especially with big ticket items like appliances and TVs.

  3. MP // January 11, 2008 at 6:49 AM  

    Thanks for the quick reply. Yeah, I agree if debt avoidance is your top priority, you're right to control the potential for debt (rather, the potential to change your mind about your payment schedule) by going with the cash.

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