Monday, September 1, 2008

Saving Money - Some Simple Math

With food prices higher than ever, most of us need to take a closer look at how we spend our grocery dollars. One of the best ways to do that is to simply do the math.

Take starches, for example. Unless you and your family are on the Atkins Diet, you spend some amount of your hard-earned cash on carbs. The basics are: bread, pasta, rice, potatoes.

In my area, both bread and pasta run about $1/lb. Rice, between 50¢/lb. and 99¢/lb. Potatoes? 40¢/lb. Got that? Rice is cheaper than bread or pasta. Potatoes are cheaper than either one. Plan your meals and your shopping list accordingly. Also, check out this book:

My second point isn't as specific, but it is equally important, and it is this: Don't be fooled by packaging tricks. This means to always, ALWAYS check the price per pound pricing on items you're considering buying. Think that buying in bulk will save you money? It certainly *can*, but it doesn't always. Somehow, sometimes buying something in lots of little containers is actually *cheaper* than buying something in bulk. I've noticed being the case with both paper towels and tuna recently. Crazy but true.

Next, don't assume that your big box club (Costco, BJ's, Sam's Club and the like) is really saving you money. Once upon a time this was definitely true, but in today's marketplace, you can often find better deals elsewhere, whether it be online, at your regular grocery store, department stores like Target or K-Mart, or even drugstore chains like CVS. The point is, don't assume, CHECK. You might well find some surprises.

Finally, while it's often true that you can get a better deal by driving more, beware! With high prices at the pumps, doing the math is more important than ever. Here's how:

Take your average miles per gallon* and determine how many miles out of your way you would drive for the sale. That should tell you how much of or how many gallons you'll use getting there. Multiply that by the current cost of gas per gallon (and don't forget that most gas pump prices are sneaky - $3.59 is actually $3.599. Round up to $3.60) and voila! You've learned how much gas money it will cost to get you to the sale(A). Now decide how much savings you'll get at the sale(B). Is A bigger than B? If it is, don't go! You'll just be ripping yourself off in the long run. Is B bigger than A? If so, then go enjoy the sale!! Remember to use this formula when deciding whether to drive farther for cheaper gas, too.

So - don't cheat yourself, or allow sneaky marketing to cheat you! Do the math!

*If you don't already know this number, it is well worth your time to work it out. Find out your gas tank size (usually in handbook). Fill it up. Set your trip counter to zero. Drive until you are on empty. Take the number on the trip counter and divide it by the size of your gas tank. Tada! Your average miles per gallon!