Monday, June 18, 2007

Grocery Musings

Recently we moved to Charlottetown and with that comes a myriad of new expenses. Food is obviously one of the more important ones and as anyone that has moved before knows, that first few weeks of groceries can get pretty expensive.

With that in mind, I made up a shopping list of items we would need for our first foray back into the supermarket scene. Once I had the list, I decided to go through it at each of the two main supermarkets, The Atlantic Superstore and Sobeys to see which place had the cheaper product. This was done prior to actually going out to purchase items so there is an extra travel cost associated with doing this. As well, it takes a long time if you have a big list. I spend about an hour at each place finding items as well as calculating their unit cost.

I found that around 75% of the items on my list were cheaper at Superstore, while the remainder was less pricey at Sobeys. There seemed to be a general trend that the items that we needed which required freezing or refrigeration such as frozen veggies, extra lean ground beef, and margarine, were cheaper at Sobeys. Staple items such as canned goods, fresh produce, and toiletries could be found at lower cost at Superstore.

Naysayers to this method may state that their time is too valuable to be doing this every time you go shopping. Well to save a trip the following week, we went to Superstore first, priced our new list there and the following day went to Sobeys, priced items and purchased them at the same time if they were cheaper. However, this run we noticed that no items on our list were cheaper at Sobeys, so back to Superstore for us.

As well, despite taking time and effort to determine the location of cheaper goods, that time is only overhead for the first few months at most. Once you've done that and collected a good database of information about the prices of items you regularly buy, then a simple comparison of grocery list vs. spreadsheet can tell you where to go. So over the long run, you will save money and time.

Some additional points should be mentioned. In addition to the basic cost of goods, both stores have flyers every week that should be looked at and factored in to where you will shop. Both stores also have reward plans for shopping: Superstore has PC points and Sobeys has Air Miles. Both points can be redeemed for merchandise other than groceries, though with Air Miles the selection is much broader. If these plans would influence where you shop, make sure you pick the one that makes the most sense for you.

In closing, I'm still on the fence about doing price checks again as it does take a fair bit of time and I haven't convinced myself that the potential savings are worth it. As well I can say one thing for sure: If you are shopping at Superstore, you are probably already saving money. I say probably because the amount of items that are more expensive is so low, that the savings you generate from other items outweigh their extra cost or at least break even.

Monday, June 4, 2007

A Good Feeling

Last week I performed an action that felt very rewarding. This was the first time I did said action and it's everything everyone says it is. What action is it, faithful readers? That of paying yourself first.

If you've noticed the growing list of financial advice books on the sidebar, you know that I have been acquiring knowledge at a reasonably brisk pace. The common theme throughout many of the books is the importance of paying yourself first. This is also known as The Golden Rule. In short, look at your gross income on your paycheck and take 10% of it and set it aside in a savings account or in some sort of investment. Doing it automatically would be an even better idea as it takes the thinking and sitting-down-to-do-it-ness out of it. The idea sounds simple (and it is) but rarely do people put it in action. It is a key step in setting yourself up for financial freedom/independence in the future.

What I have done prior to last week was pay all our (fiance and me) bills, not spend very much, and what was left at the end of the month was dumped into our PC 4% savings account. This did work out pretty well because our monthly expenses are rather low. We have no rent, no groceries, and no utilities because we are living with my parents. A fine system with which to save money. Many people have the mentality that they will save what ever is left over from paying the bills, but often time there is none left. Little things come up that eat away at your income and erode your potential savings.

So even though our savings were growing every month, I was still paying everyone else first, as if they are more important than us. They aren't. Pam and myself are the two most important people in our lives and as such, we should come first. Thus, last week I looked at our paystubs, figured out 10% of our gross income and transferred the amount into the savings account. No thought was given to car insurance. I couldn't care less about a cell phone bill. I was putting money away for the first time that would help ensure that we will be able to retire early. And it felt good. Try it yourself and I think you will agree.