Professional Purchasing

Ever since I began using a DOS version of another program called Smart Home Shopper I have really been able to cut my grocery expenses but have yet been unable to justify using coupons because my program doesn't have this feature for analyzing their effectiveness (I have found I have spent too much time with coupons for very little savings). I have looked at other computer programs for grocery shopping and haven't been able to find one that is designed to compare current sale prices to prices last paid at various grocery stores, and also what coupons you have available (that haven't expired) for the same type of food under consideration.

In other words, the program should take all of the guesswork out of whether your least costly current purchase is to buy at the sale price, to buy a store brand, or to use the coupon on a name brand. Ideally, the program would really "sound off" when a sale item is considered and you have a coupon for it.

I have a system for grocery shopping that saved me $1,000 last year and required very little sacrifice from our family of four but did require some planning. For years I have been involved in sales and purchasing as a profession but not in groceries. For some reason I never applied the principles I used on the job in my personal life. My customers would rarely buy from me if my prices were 5, 10, 20% or more higher than my competition, but that is exactly what I was blindly willing to pay when it came to groceries until I began monitoring the price of every item I purchased. One day as I was struggling with paying the bills I realized that with all of the experience I had in my job I was too smart to be duped by the variable price game when it came to buying food for my family.

I began building my system by using a rather old DOS version of a shareware computer program called Smart Home Shopper. This particular program allows you to record the price of every single item you purchase at up to five locations. The lookup, retrieval, report, clear order, and automatic selection of the best buy features make this program fairly complete. However, since it is one of the original shareware grocery programs it does not allow for coupon monitoring.

The first step is to write down every food item you have in the house at the price shown on the product. Be sure to include HBA (House and Beauty Aids), paper products, and medical as these can really add up! Enter this information into your data base. Then the next time you go to the store be sure to record the prices paid for any of these items you purchase. Record only the lowest price paid and add records to the data base for anything new. Before you go shopping each time (preferably only once a week), take the grocery ads from the newspaper for the week, circle what you might need or want, add to it any items you have written down during the past week that you ran out of or are getting low on, then enter these items into the computer to generate a shopping list and compare this week's sale prices with your last paid price. If the price is equal to or less than what you paid before, it is O.K. to purchase that item. If the price is higher and you don't really need the item this week, wait!

For anyone who is involved in retail sales it's commonly known that most products are sold at what is called a variable price. This means that 20% of the items that generate 80% of the sales are generally sold at a competitive price. The remaining 80% of the "blind" items are sold at a much larger profit margin. Also, products are promoted in cycles that have to do with seasons, manufacturing schedules, competitive environment, marketing strategies, etc. What this system does is allow you to spot the cycles and to buy accordingly. Once you have used a computerized program such as this for a while you will rarely run out of food but will save $$$'s each time you buy. You must be willing to buy enough food to get you through one cycle (Such purchased hot dogs this week at 39 cents per pound, and then not buy them again for approximately six weeks until they drop back to the same or lessor price). Cereal is another example of a big money saver using this system. (You will need to allow for inflation as time passes).

I know there are alot of skeptics out there who will say the big savings is in coupons. If you are willing to make the best buy based upon price per unit and ingredients, you will begin buying alot more store brands and generics. Rarely will national brand coupons get you low enough to compete with these products when they are on sale. Try the system. Take your "purchase order" to the store after to have prepared it at home with this system. You are in for a real learning lesson in retail marketing.

I am also an avid user of Quicken for Windows. This is my third version of Quicken and I use it religiously. It may seem foolish to some people when they ask if I record every penny of income or expense but I treat my personal finances just as I would if I were running a business (It's not foolish for paid professionals of accounting departments to record every penny).

You might ask how I handle the accounting for the other members of my family? My wife keeps track of her own income and expenses. She turns these in at the end of each week for me to reconcile. (This would be like a salesperson records his/her finances while on the road). The only accounting I keep for the kids is any expenses paid on their behalf such as allowances, school meals and activities, clothing, etc. that we are responsible for as parents. I also keep a payables account for each one of the kids that is a record of money borrowed from us as parents. This works real well for those times when they say, "Can I borrow some money. I'll pay you right back!" but, of course, hardly ever do. In our household every debt is collected! Another request kids ask is, " I didn't get my allowance this week". A quick lookup in Quicken confirms they did. There are times when we owe the kids more than they owe us, but this is no problem as their accounts reflect the balance between us and them. The kids use this as a savings account when they let their allowances accumulate. In the case of our teenager entering college, we have been paying for his college expenses which he will reimburse us for as he earns the money. We both know at any point in time exactly what the balance in his account is so we can both plan our finances accordingly.

Recently I came across some new financial planning information. Since I don't close out my accounting periods in Quicken, it was real easy to print out my financial figures for the past three years, analyze and plan for the future. It may seem like a lot of work at first but once the discipline is established it becomes a habit to keep your finances up-to-date in Quicken.

Do you have a time or money saving idea that wasn't included in this article? Please send it to tips @stretcher.com. We get the best ideas from our readers!

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