The Lowdown on Price Books
Saving for retirement and college educations for your kids may seem out of reach if you're juggling such family finances as daycare expenses and mortgage payments. But you may have more dollars to put away than you realize. The best way to find out? Try a price book.
It doesn't take much to start. Simply take a notebook and write down every purchase you make -- from groceries to even the little things like paper clips -- and the price you paid.
What's the catch? You need to stick with it, consistently, for at least six months.
Six months will give you a clear picture of the variety of expenditures your household faces, from regular bills such as food, utilities, and rent or mortgage, to the more infrequent costs including insurance payments or property taxes.
"It's very important to get a pulse of where your money is going -- that's what starts the budgeting process," says Mike Furois, president of The Planning Associates, a fee-only financial planning business in Phoenix, Arizona. "If you don't know where your money is going, you can't make any improvements to it."
"When you see your spending on paper, it quantifies and clarifies the money you have and what your financial goals are," Furois says. "It's just prioritizing. It's lifestyle decision making."Here are few suggestions for setting up a basic price book:
- In a small notebook, draw three columns.
- Label the first column "Name of Item"; the second one "Price"; and the third one "Date."
- Every time you go shopping, sit down with your receipts afterwards and fill in the columns for each item you purchased.
If you're using this to create an overall household budget, write down your other bills as well, including utilities such as gas and water, your rent or mortgage, and optional services like cable.You can use your price book to help you track where you get the best deals. Try the following to help you do this:
- After the "Date" column in your book, add another column labeled "Store".
- Each time you buy a particular item, like milk or a toiletry such as shampoo, compare the price you paid with previous purchases, and circle the lowest one in your column. Look in the "Store" column to see which one gave you the lowest price. That will tell you where you got the best deal.
Make it easy: Get our printable Family.com Price Book PDF.
Remember, no matter what type of price book you keep, it's important to maintain it for at least six months to get a clear sense of where you're spending your cash.About the Author:
Christine Dunn is a freelance writer and founder of Savoir Media Co., a media training and consulting firm in Massachusetts. She worked for more than a decade at Bloomberg News, and currently also regularly contributes to Compliance Week.