How I Build And Use A Price Book

About a week ago, I made an offhand mention of a price book in my detailed review of The Complete Tightwad Gazette. I compressed several ideas down into a single paragraph, mostly commenting on Amy Dacyczyn’s suggestion on how to do it from the book itself. Several readers wrote in and asked how I do it, so I thought I’d explain how we use a price book in our shopping.

First of all, I’ll say that this procedure is a little bit different than

picking a grocery store when you first move. That’s a nice rough procedure for finding a place to shop at for your first few months as you settle in, but when your life is in a normal flow, you’ll want to really dig in and assemble a true price book to help with your weekly shopping.

Where I live, there are four grocery stores (that

I’m willing to shop at) within a reasonable driving range – a Dahl’s, a Fareway, a Hy-Vee, and a Super Target. I wanted to discover which store offered the best prices on particular items, so I assembled a price book to compare the prices on specific items.

First, I made a list of our thirty or so most essential items. These are items that we buy very regularly at the store – milk, cheese, etc. It was pretty easy to do this based on our regular shopping experience.

Then, for four shopping trips in a row, I visited the four stores, writing down prices on all of the items on the list, regardless of whether or not I was buying them. I was often buying at least some of the items on the list, but it was worth the effort to find the prices on our top ones.

Now, each week, I make up a grocery list, grab the flyers for all four stores, and figure out which store is the cheapest for our list. I usually identify a few sale items from each store to pick up and use to make a few meals that week, like fresh asparagus on sale, for example – these items are obviously different from store to store. I also note any of the items on the grocery list that are on sale at each particular store that week. Then I total them up using Excel and go to the store that will give me the cheapest bill.

What do I save by doing this? There’s usually a $20 spread between the cheapest store and the most expensive store for a given list. Even more interesting: the ranking of the store varies quite a lot. Roughly 30% of the time, either Dahl’s, Fareway, or Hy-Vee is on top; the other 10%, Target ends up on top. Given that, an average week saves me $10 for about twenty minutes of work.

Even more interesting is that by doing this regularly, over time you get a strong innate sense of what sorts of items are cheapest at which stores and you can often use that sense to save time. For example, the meat prices are almost always lowest at Hy-Vee, partially because they have their own meat cutting within the store, so if my list has several meat products, I can basically assume I’m going there.

Another tip: update that price book once a year or so. There is quite a bit of drift over time at the various stores and you’ll find often that your earlier notions are no longer true. I know people who swear that Dahl’s is the cheapest, and they are on some items, but I believe that a big part of this is just habit based on something that may have been true years ago.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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