RPF0512-Price

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00:00:29.800 | Today on Radical Personal Finance, we talk about how to decrease your expenses, how to

00:00:37.920 | build and use a price book to save you money in the short term and the long term, and perhaps

00:00:44.920 | most importantly, to train your frugal muscles for a lifetime of getting more for less.

00:00:52.560 | Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge,

00:01:12.520 | skills, insight and encouragement you need to live a rich and meaningful life now while

00:01:16.880 | building a plan for financial freedom in 10 years or less.

00:01:20.480 | My name is Joshua and I am your host and today we're going to be very, very practical, continuing

00:01:25.480 | our quest of helping you to save money by talking about price books.

00:01:29.160 | I'm going to explain to you what a price book is, talk about the benefits of having one,

00:01:33.080 | how to build one and share with you some of the surprising results of my own work in this

00:01:37.520 | area.

00:01:38.520 | I've stated recently several times that one of my goals for 2018 is to cut our grocery

00:01:46.400 | budget, our family grocery budget substantially.

00:01:49.320 | My personal target is to see if I can trim out about 2,000 bucks this year off of the

00:01:52.720 | money that we spend in groceries.

00:01:54.320 | A little hard to track sometimes because of course we have a pantry and I don't have it

00:01:59.720 | exactly perfectly figured out.

00:02:01.500 | But that's kind of the mental goal in my head.

00:02:03.480 | I'm going to trim a couple thousand bucks out of our grocery budget and knock this thing

00:02:07.600 | out of the park.

00:02:08.600 | In order to do so, I have to go back to the fundamentals.

00:02:11.600 | I have to go back to the basics and pick up some of those things that I have let go.

00:02:17.160 | I think frankly this is something that we find in many areas of our life.

00:02:20.040 | When we get out of shape, we have to go back to the fundamentals.

00:02:22.960 | When we start getting fat, let's say that you are fat and then you got skinny and then

00:02:27.040 | you get fat again, well, you got to go back to the fundamentals.

00:02:29.720 | The same thing with saving money.

00:02:31.400 | I've frequently found that I have to go back to the fundamentals.

00:02:36.080 | One of those fundamentals for helping you to do a better job with your spending is the

00:02:41.000 | use of a price book.

00:02:42.520 | I'm going to be using the example of a price book today in the context of groceries because

00:02:47.760 | all of us buy groceries in some form or another.

00:02:51.560 | That's probably the most practical way for us to use this information.

00:02:56.200 | But of course you can and should use this in other areas.

00:02:59.600 | So what is a price book?

00:03:00.980 | In essence, a price book is your own personal record of what things cost in different places

00:03:08.900 | at different times.

00:03:11.280 | That's the philosophical sounding dictionary definition.

00:03:14.120 | But basically it's a notebook in which you write down what the stuff that you regularly

00:03:18.960 | buy or want to buy costs you at different times and in different places.

00:03:25.680 | So it would be as simple as having a notebook and if you're going to shop for green beans,

00:03:30.840 | you write down how much green beans cost at the different stores that you go to.

00:03:35.700 | You write down if there's a sale on green beans and if there's not a sale and you calculate

00:03:39.600 | how much green beans cost per pound and that helps you to figure out where to buy your

00:03:43.280 | green beans.

00:03:45.560 | Because some stores will regularly have green beans priced more cheaply than other stores.

00:03:50.380 | It will also help to guide you on when to buy your green beans.

00:03:54.760 | You may find that at the end of the harvest season where you live, there are dramatic

00:03:59.880 | sales on green beans and you can buy boxes and boxes of them at a 50 or 70% discount.

00:04:05.160 | If you can figure out how to either use them or to store them, that may be a really good

00:04:09.860 | way for you to get the valuable nutrition and food content of the green beans at a cheaper

00:04:14.800 | price.

00:04:15.800 | Of course, there are some other products that you may buy regularly that you can use sales

00:04:20.040 | and coupons to know when to stock up.

00:04:21.960 | Maybe you buy coffee in a big can, a number 10 can at your local store or maybe you buy

00:04:27.440 | jars of peanut butter and they're having a sale at the store and you need to know, "Oh,

00:04:32.520 | should I buy a dozen jars of peanut butter or should I just buy one or two?"

00:04:37.400 | And if you'll start to do this over time, it'll allow you to always pay the lowest possible

00:04:41.280 | cost for the items that you want to use, but you have to have the data.

00:04:46.920 | A price book is so valuable because it helps you to know which stores give you those best

00:04:53.840 | prices and when to stock up.

00:04:58.380 | One of the trends that you should observe in your own life and in others' lives is

00:05:04.800 | as you go from poverty to wealth and as you continue in that journey, you should take

00:05:11.480 | advantage of your wealth in order to buy larger amounts of product that you're going to

00:05:16.680 | use at lower prices.

00:05:19.760 | If you study the poor people all around the world, you'll find that one of the things

00:05:23.160 | they do is frequently buy very small quantities of things because their cash flow is very

00:05:28.960 | limited.

00:05:29.960 | They can't afford to trot down to Costco and buy a giant box of 50 or 100 rolls of toilet

00:05:36.320 | paper.

00:05:37.320 | They go down to the local store and they buy one little roll of toilet paper because they

00:05:40.200 | don't have $20 to spend on toilet paper.

00:05:42.520 | They have 30 cents to spend on toilet paper or 50 cents.

00:05:45.720 | By the way, Costco toilet paper costs 50 cents a roll – sorry, 53 cents a roll and that's

00:05:50.080 | one of the benefits of having a price book is to know that every time you put a roll

00:05:53.400 | of toilet paper on, how much that actually costs depending on where you are purchasing

00:05:58.760 | it.

00:05:59.760 | So when you don't have a lot of money, you have to buy things in small quantities.

00:06:02.800 | But when you buy things in small quantities, you usually pay the highest possible price

00:06:08.200 | per unit, the highest possible price per roll of toilet paper because – and this isn't

00:06:14.160 | so common in the United States.

00:06:15.840 | Although it does exist, but in many parts of the world, if you go into a barrio or a

00:06:20.960 | neighborhood, a ghetto of some kind where there are many, many poor people congregated

00:06:25.280 | together, you'll find that they do their shopping in the local corner store.

00:06:29.240 | Whatever they're called in your neck of the woods, whether it's a pouperie or a

00:06:32.720 | sorry-sorry store or a rabe du coin or a dollar general or whatever the local iteration of

00:06:38.720 | it is, you have a shopkeeper who takes and buys large packages and splits them up.

00:06:43.360 | Very convenient and helpful for poor people but pricey when considered on the unit prices.

00:06:49.920 | So as your wealth grows, you should look at the things that you buy and you should be

00:06:54.360 | willing to purchase larger quantities of them as long as you're going to use them if you

00:06:59.480 | can get a better price.

00:07:02.080 | But the price book is what tells you when you should stock up.

00:07:06.760 | Either when in the season – one of the strategies everybody can implement is just do your shopping

00:07:12.920 | off-season.

00:07:14.520 | Purchase your lawnmower if you need a lawnmower in the fall.

00:07:18.920 | Purchase your snowblower in the spring.

00:07:21.600 | Purchase your winter clothing in the spring when it's being rebated and discounted.

00:07:26.640 | One of the best times to go shopping for your Christmas presents for next year is right

00:07:31.680 | after Christmas this year.

00:07:33.960 | The next best time to buy your candy for next year is right after Valentine's Day or right

00:07:38.240 | after Halloween this year.

00:07:41.020 | Look for the – to be out of time and look for when the best time to buy certain things

00:07:48.840 | is that you can stock up.

00:07:51.020 | As long as you're dealing with products that aren't going to go bad, that's going

00:07:54.380 | to be helpful to you.

00:07:57.180 | And also stock up anytime you find a good buy, whether that's a good buy that you

00:08:00.820 | can manufacture, create, buy a discount that you find or coupons that you can apply, rebates

00:08:06.720 | that you've discovered or a good buy just simply in terms of a good sale and the price

00:08:11.300 | book tells you how to do that.

00:08:14.100 | Now with regard to food, I think this is the best place for us all to start because most

00:08:18.880 | of us have a dizzying number of options available for where we can actually purchase our food

00:08:25.220 | and what kind of food we can buy.

00:08:26.580 | I live in a food oasis.

00:08:28.580 | I talk about food deserts which is the idea of living in a place where there aren't

00:08:32.660 | a lot of great options available for you to buy good food.

00:08:35.420 | I live in a food oasis.

00:08:36.780 | It's almost embarrassing within a very reasonable – within ten minutes of my house in the

00:08:42.620 | car, much of it within five minutes.

00:08:45.580 | I've got bunches of grocery stores.

00:08:48.060 | There are Publix.

00:08:49.060 | There's a Winn-Dixie.

00:08:50.060 | These are regional southern grocery stores like Kroger.

00:08:53.100 | There's Aldi nearby.

00:08:55.900 | Then there are tons of elite stores where I live.

00:08:58.140 | We've got Whole Foods, Fresh Market, Trader Joe's.

00:09:00.860 | I've got health food stores, independent nutrition supermarkets and health food stores

00:09:04.660 | where you can purchase all of the crunchy stuff.

00:09:07.420 | I've got a great ethnic market, big ethnic – a couple of big ethnic supermarkets that

00:09:12.500 | live where I live, one that's targeted towards Latinos.

00:09:16.220 | Everything is in Spanish.

00:09:17.220 | All of the food is from Central and South America, all the Central and South American

00:09:24.260 | brands.

00:09:25.260 | One that's targeted towards – it has a lot of Hispanic food but a lot of Arab food,

00:09:30.540 | a lot of Indian food, a lot of food from the islands.

00:09:33.900 | Obviously, if you need to buy live crabs or jellyfish tentacles or if you want to get

00:09:39.620 | a frozen goat head for your dinner tonight or purchase a package of cow's feet, that's

00:09:45.540 | the store you go to.

00:09:46.540 | I love taking my children there because we're usually the only white people in the store.

00:09:51.180 | They love to look at all of the little animals and things that you can buy.

00:09:55.500 | I've got fruit and vegetable stands.

00:09:58.540 | We've got Walmart.

00:09:59.540 | I've got the big box stores, Costco and Sam's Club and BJ's and various green

00:10:04.540 | markets.

00:10:05.540 | The one place where we lack, what we don't have is we don't have access to a lot of

00:10:09.620 | local producers or a lot of local farms.

00:10:12.740 | Where we live, the green markets are kind of hoity-toity posh affairs rather than places

00:10:18.100 | where you can actually go to get a deal.

00:10:20.500 | You pay through the teeth when you go to the green market because usually you're buying

00:10:24.860 | the fanciest, most artisan food.

00:10:29.820 | That's not a great place to save money.

00:10:31.100 | That's a good place to go for the experience.

00:10:32.620 | We live in so many of these.

00:10:34.380 | I have an abundance of riches where I live in that regard, but it's hard to know what

00:10:40.500 | to buy where.

00:10:41.500 | It's hard to do this in your head.

00:10:43.140 | Let me walk you through the process of creating your own price book and then I'll tell you

00:10:48.860 | some of the examples of the results of me going back to this.

00:10:53.500 | My wife and I first married.

00:10:54.580 | I used to have a price book at that time, but our food shopping was so simple that we

00:10:58.940 | just kind of gave it up and quit.

00:11:00.460 | But now, I'll go back to that fundamental.

00:11:03.240 | What you do in my recommendation way is start on paper.

00:11:06.400 | What I prefer is a three-ring binder.

00:11:08.660 | The reason I prefer a three-ring binder is it makes it easy to change the order of the

00:11:13.980 | pages.

00:11:15.420 | I used a simple notebook paper.

00:11:17.580 | You're going to designate a page to each type of food that you buy.

00:11:22.780 | What I would do is if I'm trying to figure out where to buy green beans, I'll just write

00:11:28.300 | at the top of the page a very natural category listing.

00:11:30.900 | For me, it would be beans, green.

00:11:33.820 | I'll alphabetize the pages based upon the product.

00:11:37.420 | I know that my beans are going to be on one page.

00:11:39.780 | I'll have beans, green.

00:11:41.860 | Of course, on that green bean, I won't put it out into string beans or all the different

00:11:47.300 | varieties.

00:11:48.300 | I'll just put basically things that are kind of like green beans.

00:11:50.660 | Then I would have a page for dried beans, things like that.

00:11:54.500 | I would have a page for peanut butter and a page for eggs.

00:11:58.020 | The value of this three-ring binder is that you can infinitely sort and shuffle your pages

00:12:03.140 | and keep them alphabetized so it's quick and easy to find.

00:12:06.380 | You can do this with a notebook, but it's harder because in a notebook, you're not going

00:12:10.120 | to know the exact categories as you create it.

00:12:14.620 | It's a little bit harder to create an ad hoc category.

00:12:17.180 | Recently, I was looking and thinking about getting an extra battery jump pack for my

00:12:22.780 | vehicle.

00:12:23.780 | So I just created ad hoc a page for a battery jump pack in my vehicle.

00:12:28.460 | There was a rebate on one at Costco – excuse me, it was on sale at Costco.

00:12:32.060 | I wrote it down and then I came home and started researching other ones to see where the best

00:12:36.060 | price would be on that type of item.

00:12:38.660 | That's the benefit of a three-ring binder.

00:12:40.580 | The disadvantage of a three-ring binder, which you should be very aware of, is that it's

00:12:47.100 | a bit more unwieldy than a small notebook.

00:12:50.540 | A three-ring binder, in order to use it, has to be opened up.

00:12:54.500 | Now, if you shop by yourself, this is relatively simple just to perch it on the cart and to

00:12:58.780 | use it.

00:12:59.780 | But if you shop as I do with a bundle of young children, it's a little bit harder sometimes

00:13:04.660 | to keep that three-ring binder out and open where you need it.

00:13:07.620 | So you might need to either shop by yourself or use a notebook.

00:13:10.540 | But just have a simple three-ring binder.

00:13:13.100 | And in that binder, write down the items of what you buy and start to track the place

00:13:18.940 | that you buy it and start to track what's going on with the sales.

00:13:21.960 | What I do is I write down the date that I am looking at so that I know what's going

00:13:28.300 | on at a certain time and I can track the dates.

00:13:30.740 | Then I write down the store that I'm shopping at.

00:13:33.720 | You can just jot the name or come up with your own little abbreviation code for knowing

00:13:38.700 | which store you're in.

00:13:40.180 | Write the item and write the package size.

00:13:43.940 | So if it's an 18-ounce item and it's $5 or $1, then go ahead and just write that

00:13:51.100 | down so you're clear on what that is.

00:13:53.100 | Then I make a note if there's a rebate or something on it right at the moment.

00:13:56.740 | I make a note of the standard price and the rebate amount.

00:13:59.300 | And then calculate the unit cost.

00:14:01.300 | The way you calculate the unit cost is you take the price of the item and divide it by

00:14:08.660 | the number of units that you want to calculate.

00:14:12.580 | Sometimes that'll be per pound if you're dealing with something that is easily measured

00:14:17.700 | per pound.

00:14:19.660 | Sometimes it'll be per ounce if you're dealing with something that's most easily

00:14:23.700 | measured in per ounce.

00:14:25.580 | Sometimes it might be measured in the actual number of units.

00:14:29.620 | So each – for example, I was recently pricing out bagels.

00:14:34.580 | And so I didn't use the ounce.

00:14:36.100 | I used the each and I calculated how much each bagel costs and – or some other thing

00:14:43.300 | that's appropriate.

00:14:44.300 | So just divide the price by the number so that you can get a unit price.

00:14:46.860 | And that unit price is important so that you can compare items across different quantities.

00:14:52.500 | I know just a moment I'll – well, here would be an example of a comparison of one

00:14:58.200 | of my categories would be raisins.

00:15:01.700 | We enjoy eating raisins and of course, most people do.

00:15:05.760 | Raisins are not inexpensive.

00:15:06.760 | I find – in my opinion, they're pretty expensive.

00:15:09.740 | But I have different supplies that I go to with raisins and different types of raisins.

00:15:14.740 | And I'd prefer to buy larger packages of things if that gets me a discount.

00:15:20.260 | So just two prices for you as of current prices.

00:15:23.060 | At Costco, they don't sell non-organic raisins anymore.

00:15:26.180 | They only sell organic raisins.

00:15:28.500 | And one of the things that you want to do in your price book is always note the exact

00:15:32.220 | type of thing that you're talking about.

00:15:33.900 | Now, I don't think this should be separated by page.

00:15:36.460 | For example, if my page is dedicated to raisins, I'm not going to have a page for organic

00:15:40.700 | raisins and for conventional raisins.

00:15:42.940 | I'm just going to write down raisins.

00:15:45.060 | But write down the cost of organic and conventional on that page so you can choose to make whatever

00:15:49.440 | quality choice you think is appropriate.

00:15:51.820 | But you can be aware of the prices.

00:15:53.860 | So at Costco, they sell organic raisins for $2.72 per pound.

00:15:58.460 | They come in packages of two 23-ounce bags for $2.72 per pound.

00:16:04.820 | If I go to my local restaurant supply store where I do a good amount of shopping, I can

00:16:11.020 | buy a 30-pound box of conventional raisins for $1.43 a pound.

00:16:15.580 | So almost a – about probably what?

00:16:18.900 | 40 to 45 percent savings there from $2.72 to $1.43 per pound.

00:16:23.760 | But the difference is I'm going to go from two bags of raisins, which Costco in this

00:16:28.900 | case is actually what I consider a small amount, to a 30-pound box of raisins, which is going

00:16:34.100 | to require much different handling in terms of how you're actually going to deal with

00:16:38.380 | a 30-pound box.

00:16:39.820 | But you only can get that price comparison if you'll split it out into a per pound cost.

00:16:44.580 | So make it intelligent and make the per pound cost or the per ounce cost a number that's

00:16:49.260 | useful for you.

00:16:50.260 | Now, as part of your kit, what I recommend is just attach a calculator, a permanently

00:16:54.580 | attached calculator to your binder or to your notebook or make that the standard thing that

00:16:58.620 | you keep in your pocket.

00:16:59.620 | Of course, you could do the calculation on your phone or you can use the calculator on

00:17:07.220 | your phone or you can use a separate one.

00:17:08.540 | But I think it's a lot easier just to have a separate small calculator there.

00:17:12.820 | And I find it useful to shop with a calculator, period, just so that the amount of food that

00:17:18.380 | I buy doesn't exceed the budget.

00:17:21.300 | It's much easier to do that with a calculator.

00:17:23.940 | As you put an item in your cart, you just quickly add the total to it.

00:17:28.180 | Now, for those of you who are nerds, this is where reverse Polish notation – I actually

00:17:33.500 | really love it.

00:17:34.540 | It's much better to use a calculator.

00:17:37.180 | I always just use one of my financial planning calculators.

00:17:40.980 | But it's much easier to do – I think it's more intuitive to do this when you have reverse

00:17:45.280 | Polish notation on your calculator system when you're in the grocery store.

00:17:49.340 | So there's a hardcore nerd detail for you on the most convenient type of calculator.

00:17:57.720 | If you don't want to deal with a three-ring binder, all is not lost.

00:18:00.540 | There are a couple of ways that you can do this or you can do these strategies in addition

00:18:03.620 | to your three-ring binder.

00:18:05.360 | One of the beautiful things about living in 2018 is that the cost of taking pictures has

00:18:10.780 | fallen to in essence zero where you can take pictures with your phone.

00:18:15.900 | And so as you're in the store, whether you're buying something or not buying something,

00:18:20.220 | just use your phone and snap some pictures of the item and the price.

00:18:26.620 | Make sure that in the photo, you're able to get the actual item so that you can see

00:18:31.500 | the quantity, the size of the item or the number that's in it and the price.

00:18:36.820 | Then when you get home, you can go ahead and enter the data there.

00:18:39.540 | I frequently find that especially if I'm shopping with my children as I frequently

00:18:44.140 | do, I frequently find that it's easier for me just to go ahead and snap pictures with

00:18:47.100 | my phone and then update my price book when I get home.

00:18:51.980 | It's easy enough to sit at my desk and flip through the pictures and write down the exact

00:18:55.580 | numbers and a little easier than balancing a book or a notebook in on a cart.

00:19:00.420 | So feel free to try that out.

00:19:02.500 | In the long run, I think keeping the data in a spreadsheet is perfectly fine, especially

00:19:07.780 | if you're a spreadsheet nerd, but it's unnecessary.

00:19:10.620 | And in the short term, I think it's better to do in a physical binder or a physical notebook

00:19:17.380 | because you don't need that much data to actually start to inform your decisions.

00:19:22.420 | You just need a little bit of data.

00:19:23.940 | And once you have the information on which stores have what prices, then the only time

00:19:28.740 | you're going to be adding more transactions is when you run across what might be a good

00:19:33.700 | deal.

00:19:34.700 | So you run across something that's on sale or discounted, rebated, et cetera.

00:19:37.940 | You have a bunch of coupons.

00:19:39.620 | When you run that across, that's when you go and look in your price book and see, is

00:19:43.140 | this a good deal?

00:19:44.820 | So there are in essence two phases to using a price book.

00:19:47.420 | There's the initial construction and during the initial construction, you'll start to

00:19:50.660 | make certain decisions about your usage pattern.

00:19:53.740 | Let me give you another example from my own.

00:19:55.740 | I was recently looking at dishwasher detergent.

00:19:58.780 | Now, what I've usually done is purchased dishwasher detergent at Costco.

00:20:05.500 | And so Costco sells a present, a Cascade Advanced Power Gel and it's 7.5 cents an ounce for

00:20:11.920 | dishwasher detergent.

00:20:13.420 | But in constructing my price book, I was looking at Walmart.

00:20:16.340 | Walmart sells Cascade Complete for 8 cents an ounce.

00:20:20.500 | I don't know what the difference is between Cascade Advanced Power Gel and Cascade Complete.

00:20:24.820 | But in my mind, they're probably the same thing.

00:20:27.620 | It's hard for me to imagine there's that much additional technology in Advanced Power Gel

00:20:32.540 | versus Complete.

00:20:33.540 | I think that's just a marketing name.

00:20:35.860 | But I was interested to see that Walmart, right next to the bottles of Cascade Complete,

00:20:40.940 | sells a bottle of Great Value brand dishwasher detergent.

00:20:46.160 | Same size bottle, same green bottle as the Cascade Complete.

00:20:49.600 | My guess would be it's made by Cascade and it's exactly the same stuff.

00:20:52.700 | But the Great Value brand is 4 cents an ounce instead of 8 cents an ounce.

00:20:58.240 | That informs my decision because now I need to get a bottle of the Great Value brand,

00:21:02.980 | test it for efficacy, and see can I get the same results from my dishwasher with the same

00:21:09.620 | amount as the Cascade Complete for half the cost by choosing the Great Value brand.

00:21:16.260 | If so, then that would become my standard item to be purchased.

00:21:21.640 | So if I'm writing these things down in my price book and I'm creating it for the first

00:21:24.940 | time, I'm going to create a page.

00:21:26.380 | It's called "Dishwasher Detergent."

00:21:28.260 | I'm going to look around at my options.

00:21:29.940 | I'm going to look for – at Costco.

00:21:31.220 | I'm going to look at Walmart.

00:21:32.220 | I'm going to look at the grocery store.

00:21:33.460 | I'm going to look at some different brands and try to figure out what brands are available

00:21:37.420 | and what's their cost per ounce or if necessary, you would do cost per load.

00:21:42.500 | Something like laundry detergent, you would need to try to figure out cost per load.

00:21:46.580 | But skip laundry detergent.

00:21:47.580 | It's way too complicated to try to figure out an answer there because there's no uniform

00:21:51.340 | standard mechanism for comparing how much laundry detergent you would use to get your

00:21:57.780 | clothes a certain level of clean.

00:21:59.180 | Stick with something simple while you're learning these skills.

00:22:03.820 | Once I've decided that if by way of example, Great Value brand is the standard, then that

00:22:09.100 | becomes the knowledge.

00:22:10.420 | I buy Great Value brand.

00:22:11.580 | It's four cents per ounce.

00:22:13.260 | If while you're out shopping, you stumble across something, you just quickly compare

00:22:16.500 | it back to that.

00:22:17.500 | It's not cheaper.You don't need to continue collecting more data and continue writing

00:22:22.060 | things down.

00:22:23.280 | You would only make additional entries if you had to make a different brand choice or

00:22:27.700 | if something became cheaper and you find out that, wait a second, every three months, Costco

00:22:32.860 | puts their Cascade on sale and there's such a good rebate that it makes sense to go ahead

00:22:39.280 | and purchase it from there.

00:22:40.780 | You would only add new information as you have new data that would become cheaper.

00:22:46.220 | So there's no problem with keeping this physically, especially in the beginning.

00:22:51.180 | And then in time, you could choose whether you wanted to keep it physically or digitally.

00:22:55.140 | I have looked for application solutions in time past.

00:22:58.660 | I looked for digital apps and there are a few apps that advertise themselves as being

00:23:03.020 | useful for a price book.

00:23:04.580 | I did not find them to be functional for me.

00:23:07.320 | But if you're an app user, you can do that.

00:23:09.780 | One of the benefits if you did choose a solution that were digital, especially if it were digital

00:23:14.340 | and it were accessible from your mobile device, you would find that that's always with you.

00:23:20.660 | And you want to make sure that your price book is with you when you're out shopping.

00:23:24.420 | Very few of us would forget our phone.

00:23:26.720 | Many of us would easily forget our physical price book at home.

00:23:30.860 | So consider an app.

00:23:32.820 | What I think is probably the best long-term solution is use a paper one for a while.

00:23:36.840 | And then as you're standardized, go ahead and just set up a simple spreadsheet.

00:23:40.700 | And I anticipate in the future, once I work out the kinks over the coming months, I'll

00:23:44.860 | go ahead and just digitize my price book, set it into a spreadsheet.

00:23:49.540 | And my ideal spreadsheet design in this case is just to keep a very simple, probably one

00:23:53.980 | sheet, spreadsheet, and to use it in a digitized solution.

00:23:58.180 | Of course, Google Docs would work easily and well here.

00:24:02.300 | But if you wanted a non-Google solution, something like Zoho should work well or perhaps Excel

00:24:08.780 | if synchronized through the Office 365 solution, some kind of digital solution that allows

00:24:16.980 | you to maintain your spreadsheet so it's right there on your phone.

00:24:20.020 | That probably is the best solution long-term.

00:24:22.740 | So you don't always have an unwieldy book.

00:24:25.740 | But there's nothing wrong with a physical, physical book.

00:24:30.200 | One final suggestion for you is as you're tracking these unit prices, consider going

00:24:34.340 | ahead and just adding the information to your financial software, especially as you are

00:24:38.420 | learning and developing the skills.

00:24:40.740 | Figure out how much a roll of toilet paper costs you so that you're aware of it, not

00:24:46.220 | just the unit price but figure out, okay, that's how much it costs or figure out how

00:24:50.700 | much a – running the dishwasher costs per load.

00:24:55.340 | Figure out how much a jar of peanut butter costs and figure out how long that takes you.

00:24:59.580 | And that can be just well-tracked in the memo portion of your financial tracking software

00:25:06.180 | if that's what you use.

00:25:07.860 | But to start with, keep it simple.

00:25:09.620 | Let me give you a few examples of just some surprising – to me, surprising results that

00:25:15.140 | I've learned from my recent reintegration of my price book into my budget.

00:25:21.700 | This will show you how this can affect your purchasing habits.

00:25:26.900 | And then I'll close the show with some tips on how to kind of turbocharge your results

00:25:31.180 | to help you save money and a quick discussion of if it's actually important and worth it.

00:25:37.220 | By comparing prices, you'll find surprises.

00:25:40.820 | I recently was looking for asparagus and I was interested to see that asparagus sells

00:25:47.260 | for $5.99 per pound at one of the local grocery stores, $5.99 per pound.

00:25:53.800 | But at Costco, they're presently offering asparagus for $3.52 per pound in a frozen

00:26:00.260 | steamable bag, $3.52.

00:26:03.380 | So let's just call it $3.50 versus $6 a pound.

00:26:05.940 | That's probably about a 45% savings by purchasing it frozen.

00:26:09.740 | Similarly, when pricing green beans, I found that I could buy in my local grocery store,

00:26:14.300 | I could buy green beans, fresh, conventional green beans in bulk for $1.69 per pound.

00:26:22.020 | But for $1.34 per pound, I could purchase organic frozen bags of green beans at my local

00:26:27.740 | Costco.

00:26:30.100 | That's instructive because my understanding is frozen food is perfectly nutritious.

00:26:36.180 | In some cases, it's more nutritious because it's fresher.

00:26:39.620 | When a food processor freezes food, they harvest it and they do their best to harvest it at

00:26:45.780 | the height of freshness and then it's very quickly flash frozen, which should result

00:26:52.920 | in the maintenance of all of the nutrition.

00:26:55.820 | If you leave the food, it may be fresh, but if you leave it and if it starts to break

00:26:59.120 | down over time, then that broken down food, it loses some of its nutritional quality if

00:27:06.660 | it's not preserved properly.

00:27:09.060 | It's also very helpful for me to maintain my freshness if I can purchase frozen food

00:27:14.620 | as compared to fresh food.

00:27:16.460 | It also will help to cut down on spoilage and wastage.

00:27:19.660 | I hate wasting food.

00:27:21.780 | Unfortunately, if you buy large quantities of food that spoils, like large quantities

00:27:26.780 | of vegetables, frequently you'll find that something goes bad on you because you just

00:27:30.780 | didn't get around to it.

00:27:31.780 | You planned your menu, but then you wound up eating out more or going to friends' houses

00:27:35.380 | more than you anticipated.

00:27:36.740 | Next time you turn around, your green beans are black and moldy and you can try to save

00:27:40.780 | them at some point, but at some point, you just have to toss them.

00:27:43.460 | That's annoying to me, but it's also costly.

00:27:47.420 | It also costs more.

00:27:49.540 | That's a major component in many of our budgets, thankfully.

00:27:52.980 | Most of our budgets are significantly larger than the failure of some green bean storage,

00:28:00.020 | but it's an unnecessary waste.

00:28:02.380 | I don't like to waste valuable food.

00:28:06.280 | Buying something frozen, if you get it cheaper up front, maintains the same nutritional quantity,

00:28:10.740 | has less spoilage, and in this case, in the case of green beans, could actually be an

00:28:14.700 | organic product which can help to encourage the organic food industry, which I'd like

00:28:20.940 | to see more of, to encourage companies to move in that direction.

00:28:27.660 | That's great.

00:28:28.660 | Now, on the flip side, here would be a counter example with a price book, which is pricing

00:28:33.340 | out sweet potatoes.

00:28:35.600 | At Costco, you can buy a 10-pound bag of sweet potatoes for $0.78 a pound, but at the same

00:28:42.500 | grocery store that I was shopping at, you could buy sweet potatoes for $0.49 a pound.

00:28:50.700 | The only measurable difference between them was that the Costco sweet potatoes are larger,

00:28:54.580 | which could be a virtue if you were either using a recipe in which those were more valuable,

00:29:00.540 | you're eating stuffed sweet potatoes, something where you wanted them to have a stronger,

00:29:03.500 | bigger skin that you could take them out and then stuff them back in, or if you needed

00:29:07.580 | a big sweet potato, but in my case, I don't need a big sweet potato and they're the same

00:29:11.340 | product.

00:29:13.620 | Instead of essentially $0.80 a pound at Costco, you can buy them for $0.50 a pound at the

00:29:17.180 | grocery store.

00:29:18.180 | Now, of course, I also priced in the 40-pound box at the restaurant supply store and that

00:29:23.140 | comes out to be cheaper than either of those.

00:29:25.340 | Let me give that as a good example.

00:29:26.740 | Let's talk about eggs.

00:29:28.500 | One of the valuable things about a price book is starting to understand if you get a benefit

00:29:33.540 | from a bulk buy.

00:29:35.300 | I have frequently in the past purchased – my family in the past, we've eaten a lot of

00:29:39.900 | eggs.

00:29:40.900 | We've pulled back on our egg consumption recently, but we've eaten a lot of eggs.

00:29:43.900 | At different times, I either buy the fancy and high-quality eggs or the cheaper eggs

00:29:48.660 | that are mass-produced.

00:29:49.660 | I'd love to have a source for better quality eggs.

00:29:54.620 | My preference would be that all of my eggs came from my chickens scratching around in

00:29:57.900 | my backyard, eating nothing but bugs and what they find out in the wild and a little bit

00:30:01.780 | of supplemental high-quality feed.

00:30:03.700 | But until I can get back to that solution, then I got to figure out where do I get my

00:30:07.240 | eggs from and it's hard to find a local producer that gives any decent quality and

00:30:11.340 | so I'm restrained to purchasing eggs through the standard means.

00:30:16.220 | I frequently in the past purchased boxes of 15 or even 30 dozen eggs at the restaurant

00:30:21.180 | supply store because they were inexpensive.

00:30:26.020 | That's fine as far as saving on a per egg cost, but it's extremely inconvenient to

00:30:32.260 | have 15 or 30 dozen eggs filling up your refrigerator.

00:30:38.560 | That's very inconvenient.

00:30:41.140 | I did the calculations and I found out that if I were to buy 30 dozen eggs at the restaurant

00:30:46.980 | supply store for 10 cents an egg, I could do that.

00:30:51.300 | That was the cheapest price total.

00:30:52.780 | But I could also go down to Walmart and purchase the exact same generic conventional eggs at

00:30:59.780 | the same 10 cents per egg cost and I could buy them in packs of 18.

00:31:04.620 | Now I don't like the Walmart packaging because it's all styrofoam.

00:31:07.300 | I prefer a cardboard or a less package intensive use.

00:31:11.700 | But in essence in terms of the cost, it's the same cost, 10 cents an egg.

00:31:16.980 | A lot more convenient for me to buy eggs 18 at a time and store a couple packages of those

00:31:22.240 | than to buy 15 or 30 dozen eggs at the restaurant supply store.

00:31:27.360 | By the way, if you're interested, this also gives you the data to compare perhaps a higher

00:31:31.600 | quality form of egg.

00:31:33.660 | So I can no longer buy packages of the same inexpensive eggs at the local Costco but you

00:31:40.500 | can purchase – they have more of the higher quality ones.

00:31:42.620 | Their basic cage-free option, which whatever that means is one of those things where until

00:31:47.220 | I've actually been to the farm, I don't trust the labels.

00:31:49.840 | But I'm sure that Costco is doing their best.

00:31:51.540 | A cage-free set of eggs at Costco comes out to 14 cents an egg.

00:31:55.540 | So you can calculate.

00:31:56.540 | Do I get additional benefits?

00:31:58.380 | Is this additional cost worthy of me supporting it, paying my money as a nutritional?

00:32:04.500 | Is there an additional nutritional value there?

00:32:06.340 | Is there an additional ethical value there of encouraging cage-free egg production instead

00:32:10.920 | of standard egg production, which is pretty atrocious?

00:32:14.820 | You get that info from the data.

00:32:16.660 | You can also calculate then your daily cost of egg and it's a lot easier to do that

00:32:19.860 | if you know that each egg is 10 cents and your family uses a dozen a day.

00:32:23.420 | There's $1.20 every time you make eggs.

00:32:27.180 | Good data to have.

00:32:28.940 | A couple of other interesting examples would be something like bagels.

00:32:32.620 | I recently had purchased some bagels as a special treat for my family down at one of

00:32:37.980 | the local discount food stores.

00:32:39.380 | It was a day-old bread store and I popped in there and I thought I was getting a good

00:32:43.220 | deal.

00:32:44.220 | I got two packs for four bucks.

00:32:45.220 | They came out to be 40 cents each.

00:32:47.140 | But I also found however that it wasn't that good of a deal.

00:32:50.140 | At Costco, I could purchase them for 42 cents each and actually a bigger bagel.

00:32:55.460 | But I found the cheapest price there was actually Walmart at 31 cents a bagel for a cinnamon

00:32:59.100 | raisin bagel.

00:33:01.120 | One more interesting example that was surprising to me was chips, tortilla chips.

00:33:07.260 | I hate buying chips, period, because they're just – in my mind, one of the most overpriced,

00:33:14.260 | non-valuable food items that we love in our culture.

00:33:17.740 | They're bad for you.

00:33:19.140 | They have almost no nutritional content.

00:33:21.340 | They taste great but they're crazy expensive.

00:33:23.800 | But I do give in on tortilla chips, enjoy eating tortilla chips and the cost of tortilla

00:33:27.300 | chips is so much lower than some of the other ones that I think it's reasonable.

00:33:30.900 | The cheapest source that I had found for tortilla chips was the restaurant supply store where

00:33:35.300 | for $1.59, I could get a 12-ounce bag of tortilla chips.

00:33:38.820 | It comes out to 13 cents an ounce.

00:33:40.380 | But when I did the math, I actually found that the Kirkland brand at Costco, their organic

00:33:44.660 | tortilla chips they sell comes out to 12 cents an ounce.

00:33:49.220 | Cheaper, very delicious chips and organic.

00:33:53.740 | That's what a price book tells you.

00:33:56.220 | If you start to integrate the use of a price book with nothing more than the cost of a

00:34:03.780 | little bit of time up front, you'll make smarter buying decisions.

00:34:10.380 | This can substantially help you to cut your bills.

00:34:15.140 | Now here are some tips for you on how to actually do this and how to turbocharge your results.

00:34:20.260 | First, I recommend that you track everything as long as you're not the kind of person that

00:34:24.300 | gets overwhelmed by that.

00:34:26.260 | I don't get overwhelmed by data.

00:34:28.100 | I enjoy it.

00:34:29.100 | I enjoy the minutiae.

00:34:30.580 | It's fun for me.

00:34:31.580 | I'm a nerd.

00:34:32.840 | It's fun.

00:34:33.840 | I enjoy knowing that an egg costs 10 cents.

00:34:37.180 | So if I'm going to make a breakfast of scrambled eggs and we're going to have 15 eggs, then

00:34:40.740 | there's $1.50 in eggs and 32 cents of cheese.

00:34:43.220 | I think that's interesting.

00:34:45.500 | I think it's fun.

00:34:46.500 | A lot of people don't.

00:34:48.900 | So if you're the kind of person who is totally overwhelmed by all this data and all this

00:34:52.780 | minutiae, just start taking notes on a few things and just keep it very, very simple.

00:35:00.180 | But do go ahead and start tracking some things.

00:35:03.220 | If my systems don't work for you, figure out some system, but write some things down and

00:35:07.140 | start to track them.

00:35:08.300 | So at least with your normal decisions, you can start to know where you get your best

00:35:13.260 | deal and do it on the stuff that you regularly consume.

00:35:17.480 | Many of us know, "Hey, there's a shirt.

00:35:19.940 | Let me go ahead and pick up that shirt and buy it."

00:35:24.240 | We know what our price is for a shirt or a pair of shoes or something like that.

00:35:30.100 | But we often don't know it when it comes to jars of peanut butter.

00:35:34.060 | Another big benefit of maintaining a price book is you'll automatically start to delay

00:35:39.420 | your purchases a little bit.

00:35:43.300 | It's very valuable for you in controlling your outflow to stop and to think before you

00:35:51.660 | spend money.

00:35:54.300 | Impulse buying destroys many people's budgets.

00:36:00.060 | One of the very good methodologies of controlling impulse buying is to give yourself a time

00:36:07.060 | delay.

00:36:08.200 | You can buy anything you want.

00:36:11.220 | Give yourself a rule like this.

00:36:12.620 | You can buy yourself anything you want as long as you have the money for it and as long

00:36:17.620 | as you write it down on a list and leave it there on the list for an appropriate period

00:36:21.180 | of time.

00:36:22.180 | Maybe it's seven days.

00:36:23.180 | Maybe it's 30 days, something like that.

00:36:27.020 | Different people have come up with different rules.

00:36:28.620 | Anything you want in excess of $20, et cetera.

00:36:31.620 | But the point is by writing something down on a list that you want to buy and not impulse

00:36:38.040 | buying it, you can have the enjoyment of knowing that you're probably going to be able to buy

00:36:44.260 | it but you can also give time for your emotions to die down so you don't have so much buyer's

00:36:49.580 | remorse.

00:36:50.580 | Interestingly, the research psychologists related to money have found that this actually

00:36:55.940 | enhances people's enjoyment of the things that they do buy.

00:37:00.660 | Part of the fun of buying things is the anticipation of buying it, the waiting for it, and then

00:37:05.420 | the enjoying it when you have it.

00:37:06.780 | If you just buy everything all the time, things quickly – they lose some of their emotional

00:37:10.820 | enjoyment.

00:37:11.820 | So one of the bits of data that I've seen in the money psychology perspective has been

00:37:16.980 | if you want to increase your enjoyment of things, put limits on yourself and give yourself

00:37:20.940 | time to wait.

00:37:22.220 | Put down a buy list so that you wait.

00:37:25.060 | Well, tracking the prices of things and putting it in your price book gives you in essence

00:37:30.500 | an automatic buy list where you're writing something down and doing your research in

00:37:34.700 | it.

00:37:35.700 | So feel free to put anything in there.

00:37:37.060 | If you need a new air compressor for your shop, write it down and start looking around

00:37:41.540 | and shopping.

00:37:42.820 | It also gives you an idea of what your solutions are.

00:37:47.460 | That's really, really valuable.

00:37:50.740 | It's good for you to price different options and to know different things that are available

00:37:56.640 | to you.

00:37:57.640 | Don't restrict it to just the new stores.

00:38:00.500 | Example, shirts.

00:38:02.540 | My preferred shirt – I don't enjoy wearing t-shirts.

00:38:05.420 | I prefer to wear a button-down shirt.

00:38:07.500 | In my mind, they're more comfortable.

00:38:08.500 | They're more comfortable because they just naturally look better.

00:38:11.340 | They make me feel better.

00:38:12.340 | They make me feel more confident and I prefer to have a pocket.

00:38:15.700 | Years ago, I started buying Brooks Brothers button-down shirts.

00:38:19.300 | It's a superior shirt, good fabric quality and the most important thing is that the Brooks

00:38:24.660 | Brothers non-iron shirts are – they don't need – obviously, they don't need ironing

00:38:31.500 | but they're actually a good non-iron shirt.

00:38:33.660 | Now there are other ones that are excellent as well and I've purchased a number of different

00:38:36.620 | brands but the great thing about a Brooks Brothers non-iron shirt is that you know you

00:38:41.100 | can just count on that tag and it's a pretty good quality but they cost 80 bucks new.

00:38:49.860 | I would consider doing that if I had a job where again I was wearing a suit every day.

00:38:53.820 | I would consider doing that but I would probably wait for the once a year sale and get it for

00:38:58.980 | 60 bucks new.

00:39:01.180 | But I'm also well aware that if I just go into the local thrift store as I did just

00:39:05.140 | recently and go into the local thrift store, I can go in and I can find regularly Brooks

00:39:09.380 | Brothers shirts for 5 bucks each on the sale day and they're perfectly fine.

00:39:17.980 | It takes almost no time to go into the local thrift store and when you know a brand that

00:39:21.500 | you're looking for, I just go boom, boom, boom, boom, boom, boom right through.

00:39:23.980 | You find the tag, find the tag, find the next size.

00:39:26.660 | If the next size fits me, I know it will fit me.

00:39:28.780 | So brand, choice, 5 bucks, out the door, done.

00:39:33.260 | That $5 becomes the buy price for shirts, for me anyway.

00:39:41.500 | Then anytime it's cheaper than that, you stock up.

00:39:44.180 | Anytime it's more expensive, you don't.

00:39:46.260 | But by writing it down and knowing the difference, now I'm going to have extra incentive to go

00:39:49.800 | to the thrift store instead of just going to the Brooks Brothers store.

00:39:54.100 | Let me point out one quick thing on that strategy for shirt buying.

00:39:58.660 | The only reason that works for me, the only reason that I can actually purchase things

00:40:02.340 | like that at the thrift store is because in the way that I wear the shirts, sleeve length

00:40:08.380 | doesn't matter.

00:40:10.100 | For men's shirts, the big thing is fit and that fit has to come down to neck size and

00:40:16.460 | sleeve length.

00:40:17.460 | Those are the big things and I have unusual sizes.

00:40:20.260 | So I can almost never find an appropriate neck size and sleeve length in my actual size

00:40:26.820 | in a thrift store.

00:40:28.140 | But since I'm not currently wearing ties, the neck size is less important.

00:40:32.860 | Since I don't currently wear a suit coat every day, the sleeve length is less important

00:40:37.100 | and 99.5% of the time, I roll up the sleeves anyway.

00:40:40.980 | So I can find the shirts with an appropriate body size at $5 each.

00:40:46.140 | I couldn't do that if I were in a professional environment wearing a suit every day where

00:40:51.020 | I needed neck size and sleeve length to be proper, which is another example of substitution

00:40:56.300 | to show that there are certain things that are valuable.

00:40:58.860 | To me, the valuable thing is fabric quality, non-iron, having a decent reasonably attractive

00:41:05.620 | shirt that's comfortable.

00:41:08.020 | But by way of substitution, you can change out those neck size and sleeve length, which

00:41:11.800 | are crucial in a professional environment but not crucial in my current environment.

00:41:16.980 | I guess if I'm in a non-professional environment, what does that mean?

00:41:20.700 | I don't know what that means to you.

00:41:23.700 | Back to tips.

00:41:25.600 | This type of shopping is time intensive up front, especially if you've never done it.

00:41:30.380 | It takes time to do this.

00:41:32.780 | That's not a bad thing.

00:41:35.220 | Remember, you're talking about saving money and my personal goal is to cut $2,000 off

00:41:41.280 | my grocery budget this year.

00:41:43.860 | Now, $2,000 off my grocery budget, what does that actually mean?

00:41:48.180 | Well, first of all, I can't deduct my groceries.

00:41:52.180 | So I'd have to automatically add to my $2,000 grocery budget.

00:41:55.900 | I'd have to automatically add whatever I have to earn in pre-tax wages or profits in order

00:42:06.420 | to pay those groceries.

00:42:08.380 | Let's say that I were at a 30% effective tax rate.

00:42:12.020 | Well, that means that I have to earn $2,600 in order to pay for that $2,000 of groceries.

00:42:19.860 | It's a lot of money.

00:42:21.500 | Now, pretend that I want to do that in retirement.

00:42:24.220 | Well, let's take 25 times $2,600.

00:42:28.700 | In order for me to support a habit of an extra $2,000 of expenditures in financial independence,

00:42:42.060 | I would need to have $65,000 in the bank.

00:42:46.900 | The way I got there is just take your annual expenditure.

00:42:48.700 | In this case, because I went ahead and used the $2,600 number to account for income taxes,

00:42:55.900 | that would change, but – and multiply it times 25 and that gives me the amount of money

00:42:59.580 | that I would need in savings in order to support that on an annual basis.

00:43:05.860 | That's $65,000.

00:43:08.200 | So is it worth me investing, say, 10 to 15 hours of time over the first couple of months

00:43:14.620 | to build this, to avoid my having to build a nest egg of $65,000 because I was sloppy

00:43:22.200 | with my spending?

00:43:23.200 | Absolutely, it's worth it.

00:43:24.900 | Then once I've invested that, say, 10 to 15 to 20 hours of time, I've looked around

00:43:28.920 | some different stores, I've looked for deals, and then I established my baseline in each

00:43:32.380 | category, there's no additional time required to maintain it or to look at it.

00:43:38.660 | I just simply have my own data.

00:43:40.180 | I look.

00:43:41.180 | Is this a good deal?

00:43:42.180 | I move on.

00:43:43.180 | So it's only time-intensive up front, but over time it doesn't add additional time

00:43:47.260 | to your schedule.

00:43:48.260 | It's worth the money – sorry, worth the effort and it'll save you money.

00:43:54.660 | Group things in a way that makes sense to you.

00:43:57.860 | Don't go with other people's categories.

00:44:00.980 | Make up your own and be willing to change them.

00:44:04.240 | In our household, we don't eat a lot of bread.

00:44:05.860 | So for me, bread is just one giant fill-all page.

00:44:10.560 | That includes bread, bagels, tortillas, all of the above because I'm not regularly shopping

00:44:15.680 | for different kinds of bread.

00:44:17.680 | It's just an every now and then occasional purchase.

00:44:21.500 | But for you, maybe bread is very important and you're going to put on there where you

00:44:24.780 | get your French bread and where you get your Italian bread and where you get your harvest

00:44:28.460 | oat bread and then you're going to calculate how much it costs you to make bread and you're

00:44:32.220 | going to have a page for bread and a page for bagels and a page for tortillas and you're

00:44:36.060 | going to have all that data.

00:44:38.840 | Use it for you.

00:44:41.160 | Another example for me, I put things like oats, rolled oats, steel-cut oats and granola

00:44:47.020 | all on the same page.

00:44:49.200 | The granola of course is obviously going to be more expensive because it's a value-added

00:44:52.780 | product but I put it on the same page so I can calculate the cost of making my own granola

00:44:57.180 | – rolled oats, raisins, a little bit of sugar, honey and you're basically done – versus

00:45:02.160 | purchasing the pre-manufactured solutions and running that.

00:45:05.060 | So I don't mind grouping the bulk ingredients and the value-added retail product together

00:45:11.960 | because they form the same function.

00:45:16.080 | Group things in a way that makes sense to you.

00:45:19.120 | Recognize a danger of buying big packages.

00:45:23.240 | Sometimes big packages result in your using more.

00:45:28.480 | And so either account for that in your usage standard or make a different choice.

00:45:37.360 | Example from my life would be cheese.

00:45:39.720 | I buy big blocks of cheese from restaurant supply store or different places because they're

00:45:45.440 | inexpensive.

00:45:46.440 | That's the cheapest way to get them.

00:45:48.480 | But recently, we had bought a tiny little block of cheese from Aldi and I was putting

00:45:53.920 | it on the eggs and I realized that I put about half as much – I shredded about half as

00:45:58.640 | much cheese onto our scrambled eggs with the small block as I do with the big block.

00:46:04.240 | And I realized that just having that big block of cheese results in my being more liberal

00:46:08.640 | with the amount that I use.

00:46:09.640 | Well, that's not going to save you money.

00:46:13.160 | And if it's something that you don't necessarily need more of – I don't need more calories

00:46:16.440 | from cheese, I don't need to have tons of cheese on it – then sometimes choosing that

00:46:20.920 | smaller package will actually be a saving.

00:46:23.600 | So recognize that sometimes having a big package will result in you using more.

00:46:28.560 | If you buy a 30-pound box of raisins or you buy a little 16-ounce container of raisins,

00:46:33.760 | you're probably going to be less liberal with a 30-pound box.

00:46:38.560 | Sorry, wrong way.

00:46:41.680 | You're going to use too many with a 30-pound box.

00:46:43.560 | So package it up yourself.

00:46:45.640 | Factor in all of your costs to your price book.

00:46:48.440 | So for example, maybe you have to pay a warehouse club membership fee or there's a distance

00:46:53.580 | to drive.

00:46:54.840 | Remember, those things can be mitigated.

00:46:57.520 | A warehouse membership club fee can be particularly valuable if you're going to get substantial

00:47:03.440 | savings.

00:47:04.440 | If you're going to drive a far away away, then make sure that you're doing that when

00:47:07.040 | you're actually driving there for other purposes.

00:47:10.720 | If you're just getting started, then just ignore some of those things until you get

00:47:14.880 | an idea.

00:47:15.880 | But after you've figured out what your baseline is or if you have certain products that are

00:47:19.000 | similar, figure out, "Was it more convenient for me just to buy this here?

00:47:23.520 | Because I can do it in one place or it's close to my house.

00:47:25.680 | I don't have to make three stops or because I can avoid a membership fee."

00:47:30.500 | In the same way, factor in all of your savings.

00:47:33.840 | This is probably going to be done after the case.

00:47:37.320 | But stack in any kind of specific store discount that you may have or a specific buying strategy.

00:47:44.720 | If you're shopping at Target and you have their Target credit card that gives you 5%

00:47:49.440 | back on all your purchases, then in that case, you may be able to look at the Target price

00:47:54.760 | and you need to factor in the fact that that's 5% cheaper with the use of that card.

00:47:58.800 | If you were to go down to your Aldi, then you don't have an Aldi card, then maybe it's

00:48:05.800 | going to be 5% more.

00:48:07.800 | When you can start to stack things together using Target as an example, Target from time

00:48:11.880 | to time will have decent store discounts.

00:48:14.800 | Target will accept coupons, manufacturer's coupons, and they'll do some price matching

00:48:20.640 | and other competitor coupons.

00:48:23.640 | If you can stack together a store discount with a coupon with the Target 5% credit card,

00:48:32.280 | now all of a sudden you start to have compelling benefits to using that particular store.

00:48:38.640 | Remember those things.

00:48:39.640 | Then what I would do is encourage you to put down in your price book the stacking that

00:48:44.520 | you did.

00:48:46.920 | Recently I purchased some diapers at Target.

00:48:49.240 | I was able to use a manufacturer's coupon and a rebate and use a Target 5% discount

00:48:57.600 | credit card.

00:48:58.600 | Well, after the fact, I went and I calculated the whole cost of the transaction per diaper

00:49:04.040 | and then I figured out what the net cost per diaper was.

00:49:12.880 | That allowed me to set a new baseline for that diaper.

00:49:17.600 | We used cloth diapers with the exception of one child at night.

00:49:21.360 | Cloth diapers don't do well for her at night.

00:49:24.160 | Now in this case, I'll go ahead and just tell you about that transaction because it demonstrates

00:49:28.880 | how the data gives you the solutions and how you need to calculate a few different options.

00:49:39.720 | Buying the diapers at Target was not the cheapest place to get diapers.

00:49:42.640 | The cheapest place to get diapers would be the standard – would be the Costco, the

00:49:46.920 | Kirkland brand of diapers.

00:49:49.920 | The problem is that those are conventional diapers which have a lot more chemicals in

00:49:55.240 | them which we do our best to avoid for our children.

00:49:57.760 | One of the benefits of cloth diapering is that it's much less – many fewer toxins

00:50:03.200 | exposed to little babies and sensitive parts of their skin.

00:50:06.720 | But there are multiple competing brands of diapers that advertise themselves as being

00:50:15.680 | this junk-free brand of disposable diaper.

00:50:20.360 | The two brands that are the most common are Honest Brand and Seventh Generation.

00:50:26.880 | You can sit there in front of Target and – this is what I did.

00:50:29.240 | I went through all the math of the Honest Brand versus the Seventh Generation and figured

00:50:34.920 | out that on the whole, every single time, the Seventh Generation is cheaper.

00:50:39.560 | To my knowledge, I'm not aware of any inherent product characteristics that would make the

00:50:44.200 | Honest Brand superior such that I'd be willing to pay extra money.

00:50:47.600 | I'm already paying extra money to have a less toxic diaper.

00:50:52.280 | But in this case, why not go with the less expensive, less toxic diaper instead of the

00:50:56.440 | more expensive, less toxic diaper?

00:50:58.620 | The next thing is to look – and the benefit of doing that at Target was when I was doing

00:51:02.520 | this math, they were offering the same rebate on all of the choices, which included Honest

00:51:11.080 | Brand and Seventh Generation.

00:51:13.600 | The next thing is looking at the sizing and sometimes with diaper sizing, you can calculate

00:51:17.920 | the savings per size.

00:51:20.080 | And then – so if your child is on an in-between and you can stretch one size or the other,

00:51:26.320 | go with the one that has the – that's a smaller size.

00:51:29.840 | If you can do it without – before the child outgrows it and save per cost.

00:51:34.200 | And then stack that onto the rebate and then stack that onto the store 5% card and you

00:51:39.720 | wind up with – I wound up with the least expensive option possible.

00:51:45.960 | So whenever possible, try to look for those multiple avenues.

00:51:48.920 | Now, it still came out, again, more expensive than Costco for a size 6 with that transaction

00:51:55.360 | I paid 49 cents each, whereas the standard Kirkland size 6 would be 32 cents each.

00:52:02.480 | That's a big difference there.

00:52:04.680 | But that was the choice that we made.

00:52:06.120 | And so you can make whatever choice you need to do based upon your personal values that

00:52:12.280 | you have and the constraints that you put upon your expenditures.

00:52:16.600 | Use those coupons.

00:52:17.640 | Use the price-matching policies.

00:52:19.140 | Many stores will always match a coupon price or an advertised price from somewhere else.

00:52:23.880 | So if you're paying attention in your price book and you notice that the grocery store

00:52:27.240 | has a cheaper price on the item and it's advertised but you don't want to go to the

00:52:32.200 | grocery store to just get that item, well, take that advertisement into your other store.

00:52:37.360 | Take it into Walmart and ask them to match the price and that can work well.

00:52:40.800 | Don't forget the internet.

00:52:42.240 | One of the values of having this written down is that you can come home and then use the

00:52:45.460 | internet and sometimes the internet will save you money.

00:52:48.200 | Think through this.

00:52:49.200 | Exactly the same things.

00:52:50.200 | Amazon, I don't use this but if some of you – because our diaper purchase is more occasional

00:52:56.480 | given that we use cloth diapers in our family.

00:52:59.160 | But if you're a regular user of disposable diapers, then look into the stacking up of

00:53:05.820 | Amazon and subscribe and save and the Amazon credit card, etc., and see what your unit

00:53:10.760 | price comes out to.

00:53:12.880 | Stock up when it's the right time and the right price.

00:53:16.880 | And some things it's easier to do.

00:53:18.520 | Some things you have to do more work.

00:53:20.960 | Peanut butter is something that I found is important to stock up on.

00:53:26.840 | We like to have just the peanut butter that's just peanuts and salt and that's hard to

00:53:32.160 | find.

00:53:33.160 | Most of the peanut butter has sugar in it.

00:53:34.280 | So we try to avoid the sugar.

00:53:36.320 | For years, it was just standard.

00:53:37.480 | I used a public store brand and that was just the easiest thing to do.

00:53:40.320 | But then publics discontinued their store brand, which has left us with the only solution

00:53:44.440 | being a Smucker's natural product line that they have for that particular type of peanut

00:53:49.880 | butter.

00:53:50.880 | So of course I can buy giant tubs of it at the restaurant supply store.

00:53:53.960 | I can buy the Kirkland brand at Costco, which I don't care for.

00:53:56.680 | So I just knock that off.

00:53:58.400 | But still that calculates per unit cost.

00:54:00.680 | With a rebate, I recently found a deal on peanut butter that with the rebate, it's

00:54:04.960 | cheaper than the giant tubs of the junky stuff at the restaurant supply store.

00:54:08.800 | In that case, clear the shelf.

00:54:11.400 | There have been times I've come home with 20 jars of peanut butter.

00:54:14.840 | Lasts a long time.

00:54:16.520 | Certainly not going to go bad in my usage schedule.

00:54:19.160 | So stock up.

00:54:20.160 | That's easy.

00:54:21.160 | Some things, of course, it's not so easy.

00:54:23.120 | But it may be worth in your best interest to think through a little bit.

00:54:27.080 | Put some stuff in Ziploc bags.

00:54:29.420 | Use some Tupperwares.

00:54:30.420 | Use your freezer.

00:54:31.420 | In some cases, use a food saver, a vacuum sealer.

00:54:34.880 | Maybe for some people, it's worth it to do home canning.

00:54:37.640 | I think that unless you live in an agricultural area where you can have access to huge quantities

00:54:44.880 | of much discounted produce, I think canning is so labor-intensive.

00:54:49.080 | I've done it and I've done it with meats.

00:54:51.080 | But I don't have a source of those vegetables.

00:54:53.360 | But maybe you do.

00:54:54.360 | In which case, you can do home canning and that will produce much better solutions for

00:55:01.160 | you.

00:55:02.160 | What I found with home canning is I can use that for meat.

00:55:03.800 | I can go and purchase 40-pound boxes of chicken at 58 cents a pound at the restaurant supply

00:55:09.440 | store and by going ahead and canning it, then I can get the value of that price for a long

00:55:16.920 | period of time and in a way that I wouldn't ordinarily be able to use 40 pounds of chicken.

00:55:24.560 | Then finally, don't forget to extend the life of things whenever possible.

00:55:28.240 | Just because you got it cheap doesn't mean you should waste it.

00:55:31.080 | So look for all those ways to use something less and to extend its life through better

00:55:36.840 | care and maintenance.

00:55:37.840 | And you can do this to many different things.

00:55:42.900 | From time to time, just pick something that you're purchasing and do a web search and

00:55:47.480 | try to figure out how to extend the life of something.

00:55:49.880 | If you find yourself buying disposable razors, search "how to extend the life of your razors"

00:55:55.000 | and you'll find that with something like a razor, you can oil the blade so it doesn't

00:55:59.080 | rust or store it in oil.

00:56:00.560 | I've done that.

00:56:01.560 | You can strop it on a towel, on a leather strop if you use that or just a pair of blue

00:56:06.800 | jeans or an old blue jeans.

00:56:08.240 | You can strop your razors and make them last longer.

00:56:10.440 | You can get 50% or 100% more lifespan out of your razors with just a little bit of use.

00:56:17.080 | If you're buying shoes, how to extend the life of your shoes.

00:56:19.600 | Maybe it's time to get a pair of shoe trees or maybe it's time to change.

00:56:22.840 | When I was younger, I used to drag my feet and that resulted in the back of my shoes

00:56:25.880 | being worn down.

00:56:29.320 | Well, that's dumb.

00:56:30.640 | Fix the problem of the habit, the bad habit, and that makes your shoes last longer.

00:56:36.000 | All those things result in your having a lower total cost of ownership like we discussed

00:56:41.320 | in last week's show where we talked about how to save money, buy it cheaper, make it

00:56:46.200 | last longer and use it less.

00:56:48.840 | I close with this question.

00:56:50.600 | Is this important?

00:56:52.720 | Is this worth your time?

00:56:56.240 | The examples that I'm using from groceries, on the whole, each individual one is not that

00:57:04.000 | big a deal.

00:57:06.120 | Is it really going to matter in your budget that you can get Costco organic tortilla chips

00:57:13.500 | at 12 cents an ounce instead of 13 cents an ounce at the restaurant supply store?

00:57:21.120 | Obviously, if the question is, does saving that extra one cent per ounce going to make

00:57:28.800 | you be broken in debt at the end of the year if you buy a bag of chips every few weeks?

00:57:36.440 | No, of course not.

00:57:37.440 | We're grand total.

00:57:38.440 | We're talking about a couple of dollars.

00:57:43.160 | But I don't think that's the only way to look at it.

00:57:45.440 | Number one, we're dealing with a skill here.

00:57:48.920 | Once you've developed that skill, that skill can be applied to every other area of your

00:57:52.680 | life.

00:57:56.320 | Skills come with practice and all of these little transactions give you a chance to practice.

00:58:02.640 | When I outline this, it sounds very complicated.

00:58:08.160 | I'm good at taking something simple and making it sound very complicated.

00:58:11.240 | But let me collapse this down to the simple.

00:58:14.480 | All it practically means is now I know that tortilla chips at Costco are cheap.

00:58:21.920 | I'm going to make that my standard tortilla chip that we buy when we need chips.

00:58:25.680 | When they do put them on rebate, I'm going to grab a few extra bags because they'll last

00:58:29.240 | for probably a couple of months and that way I have some extra bags.

00:58:32.840 | That's it.

00:58:33.840 | It doesn't require any more time.

00:58:35.000 | I may be at Costco anyway.

00:58:36.560 | It doesn't require any more effort and it's perfectly fine to go ahead and buy another

00:58:40.880 | bag of the other chips from the store next to my house if that's what I need sometime

00:58:44.920 | just to make up for a recipe or to have a little snack.

00:58:48.760 | So when we go through all the mechanics of this, it sounds very complicated but in actuality

00:58:52.960 | it's very simple and the knowledge is simple.

00:58:57.320 | But all these little things do matter because they demonstrate you developing skills.

00:59:04.240 | As you develop and practice those skills, they will translate over to bigger areas.

00:59:13.080 | Many people when they buy a car, believe it or not, do actually just go to the car dealership

00:59:22.600 | and buy the car.

00:59:24.160 | They don't research it.

00:59:25.400 | They don't pit dealers against one another.

00:59:27.800 | They don't put competitors.

00:59:28.800 | They just go and buy the car.

00:59:32.640 | You don't believe me?

00:59:33.640 | Just start helping people with their money and you will find that that's exactly what

00:59:37.120 | happens.

00:59:38.800 | I didn't know that people ever bought cars from buy here, pay here places.

00:59:42.920 | You see them on the side of the road but it was so – it was anathema to me to think

00:59:48.960 | that I would go to a buy here, pay here used car store to buy a car.

00:59:53.760 | So I didn't know that anybody actually did it.

00:59:55.720 | Until a number of years ago, my parents took in a young lady who was in difficult circumstances

01:00:01.200 | and she lived with us for a while and they were helping her and I found out that she

01:00:04.560 | had bought one of their cars and it was a nightmare of a deal.

01:00:09.480 | I forget detail of numbers but basically she wound up paying $5,000 for a $1,500 car.

01:00:16.800 | It was a measure of ignorance and naivety and just a tough situation.

01:00:24.960 | But many people actually do that.

01:00:28.360 | So who doesn't do that?

01:00:29.960 | Well, the type of person who knows to do research and there are different levels of this.

01:00:35.640 | It is very much probably more important if you're going to buy a car this year and

01:00:41.640 | that's something that you need to do.

01:00:43.440 | It's more important if you've only got 20 hours to spend.

01:00:46.520 | It's more important for you to spend those 20 hours getting the best possible deal on

01:00:50.320 | your prospective car than it is for you to figure out how to save money on your tortilla

01:00:55.840 | chips because you can save thousands and thousands of dollars off the cost of your car with research

01:01:03.720 | and negotiation where you may only save $10 this year on the cost of your tortilla chips.

01:01:10.600 | If you have to choose, focus on the tortilla chips.

01:01:14.800 | My observation has been that very few people only have enough time to save money on their

01:01:21.760 | car.

01:01:23.880 | Whether you're the type of person who knows that saving money is valuable and you look

01:01:27.560 | for little strategies on just about everything and that leads you to save money on your car

01:01:34.160 | or you may just tend to be the kind of person who just pays whatever is in front of you.

01:01:39.520 | I was talking with my wife about this the other night.

01:01:41.560 | There are a couple of gas stations by my house that I do not understand how they pay it there

01:01:45.560 | in business because they charge $0.30 a gallon more than the gas station that I use which

01:01:51.440 | is about a mile and a half away.

01:01:54.240 | I don't understand where they get their business from and I just look around and I think they

01:01:58.200 | don't offer anything in terms of the quality of the product.

01:02:01.060 | They don't offer anything in terms of the layout.

01:02:07.080 | It's not that I shop at the nasty dangerous gas station and these are nice.

01:02:12.960 | So the same product, the cheap gas station has a better environment.

01:02:19.000 | The location, I don't see that they're offering anything in terms of location that's all that

01:02:23.120 | superior.

01:02:25.480 | It just doesn't make sense to me.

01:02:27.080 | But yet all the time I see people there putting gas in their car.

01:02:30.800 | I would understand if we were maybe in a tourist district or there were lots of travelers or

01:02:34.440 | this were one of those things where it was a matter of convenience just getting off the

01:02:37.400 | highway but none of those things apply.

01:02:39.080 | It's a mystery of life to me how these gas stations stay in business.

01:02:45.080 | Just for me, it makes sense that I'm the kind of person who's going to look for a deal and

01:02:48.160 | since I'm constantly driving past the one that's cheaper and better and more convenient

01:02:54.280 | but it happens to be a mile away and it saves me 30 cents a gallon, I'll just use that one.

01:03:01.080 | Back to the car.

01:03:02.560 | All these little saving strategies have many more opportunities for you to use than buying

01:03:07.680 | a car.

01:03:08.680 | What are you going to buy a car once every five years if you have multiple cars, once

01:03:13.240 | every 10 years if you have one car?

01:03:15.480 | A car these days should last you 10 to 20 years.

01:03:18.760 | So you can only do that about one time.

01:03:21.680 | Whereas all these little things have lots of uses and it doesn't take any more time.

01:03:30.040 | Next reason it's important is just that there are lots more strategies for all these things

01:03:35.200 | and they're much less efficient markets than some of the big strategies.

01:03:41.040 | I'm so thankful the new car marketplace has become much more efficient in the last few

01:03:45.640 | years.

01:03:46.640 | I've watched it carefully.

01:03:47.920 | With your ability to deal with things, with virtual bidding, with access to information,

01:03:55.520 | the new car market has become much more efficient.

01:03:58.760 | If you're going to buy a new car, it's relatively easy for you to get a decent deal and there

01:04:02.920 | aren't that many strategies for you to save.

01:04:07.640 | But the vegetable marketplace and the fruit marketplace and the bread marketplace is pretty

01:04:12.600 | inefficient nearby you.

01:04:15.240 | You can use these strategies.

01:04:16.920 | There are tons of them.

01:04:18.600 | They're all over the place.

01:04:19.960 | The actual amount of investment of time is just tiny and it's good practice for you to

01:04:28.520 | be ready for those big things.

01:04:31.720 | It's a good experience for you.

01:04:34.280 | It's a good experience for your children.

01:04:36.880 | The way that you train your children, especially as regards money, will drive them in the direction

01:04:43.160 | that they will pursue as young adults and as adults.

01:04:47.240 | That's your responsibility.

01:04:48.240 | So I just close with two little stories that perhaps you'll think are funny but they're

01:04:54.080 | real stories from my life here in the last week.

01:04:58.200 | I guess I'll go ahead and – I'll tell the whole story because it's fun.

01:05:02.600 | Especially those of you who are tightwads and enjoy fun strategies, you'll enjoy the

01:05:07.760 | fun stories.

01:05:08.760 | Those of you who aren't, recognize this is fun for me.

01:05:11.880 | That's my point.

01:05:12.880 | Some of this stuff is fun.

01:05:13.880 | I enjoy sitting down and working on my price book.

01:05:16.360 | If you don't, that's fine.

01:05:17.360 | My wife doesn't.

01:05:18.360 | So I do it.

01:05:19.360 | It's fun.

01:05:20.480 | She enjoys things that I don't enjoy.

01:05:22.920 | So she does some of those things.

01:05:25.160 | But for me, putting some of these things together is really fun and it's really important.

01:05:29.280 | I'll share the story.

01:05:30.640 | So with regard to children's bicycles, my son – for those of you who don't know,

01:05:36.520 | with children, some of the ideas of teaching children to ride bikes has changed over the

01:05:40.920 | years.

01:05:42.120 | When most of us were growing up, we started off with a tricycle and then we got a bike

01:05:45.480 | with training wheels and then in time, we would take those training wheels off and that's

01:05:49.960 | the process that many of us went through.

01:05:52.000 | I have the scar on my chin to demonstrate the challenge of that.

01:05:55.120 | The first night I rode a bike without training wheels and fell and crashed my chin open.

01:06:02.400 | But that's changed.

01:06:03.400 | Now there's a popularity of something that's called a strider bike.

01:06:06.160 | That's a leading brand name.

01:06:07.760 | But in essence, it's a pedal-less bike that you give to little children and they learn

01:06:12.320 | to ride it around.

01:06:13.320 | It's fun for them because they enjoy taking those bikes around and they can get the enjoyment

01:06:19.140 | of riding without having to deal with the pedals.

01:06:21.280 | They just put their feet up and down.

01:06:23.080 | And there's a very natural and easy progression.

01:06:25.960 | So for our eldest son's first bicycle, we were actually given for his birthday, given

01:06:31.760 | one of those bicycles by a friend who their child had outgrown it and they didn't need

01:06:38.160 | it anymore.

01:06:39.160 | So they gifted it to us, which was a very great gift.

01:06:41.360 | Of course, they asked – they have such a stupid stigma in the United States of America

01:06:46.280 | of not wanting to give things that are used.

01:06:50.600 | So our friends asked in advance, "Hey, we have a used bicycle.

01:06:55.080 | Would it be OK to give that because we don't need it anymore and we thought it would be

01:06:57.920 | a good present?"

01:06:58.920 | Of course, I'd love to destroy that stigma.

01:07:01.000 | I hate to see us constantly buying new things and filling up the landfill and the dump with

01:07:06.920 | just stuff that is perfectly good.

01:07:09.380 | So we said yes.

01:07:10.380 | We got a free bicycle up front.

01:07:11.380 | And the great thing about the strider bikes is that the kids can learn to ride them.

01:07:14.720 | And we found a really great solution for entertainment that at a local BMX track – we can go to

01:07:20.720 | the local BMX track and they've built a whole side track for the strider bikes that

01:07:25.760 | you could take your two and your three and your four-year-old and have them enjoy doing

01:07:29.240 | these things while some of the older kids on their pedal bikes are out on the big track.

01:07:33.200 | And so a little frugal entertainment for the children.

01:07:35.840 | You might have that nearby.

01:07:37.320 | Look to see if you have a BMX track with a strider bike.

01:07:39.400 | This has blown up in the last couple of years in popularity and we enjoy that.

01:07:43.280 | The kids really love it and we enjoy that.

01:07:45.560 | So my son has gotten to the point where he was able to outgrow – he was in a place

01:07:51.520 | where he was ready to move up.

01:07:54.600 | Now comparable buying strategy for one for my daughter.

01:07:57.880 | We didn't have a second one and we waited around to see if one would show up for free

01:08:01.380 | and one didn't show – hasn't shown up for free.

01:08:03.740 | But she was at the point where she needed one as well.

01:08:06.280 | So in that case, we had been given a number of years ago a bunch of gift cards for – a

01:08:12.080 | bunch of gift cards for Toys R Us.

01:08:15.400 | And the problem was that we never used them because Toys R Us is just this – mostly

01:08:22.440 | this insanely expensive store with toys that your kids use for a month and they get rid

01:08:27.360 | of and we have no problem at all finding giant streams of toys that just invade our lives.

01:08:33.240 | It's one of the blessings and the curses of living in the West.

01:08:36.080 | You work harder to keep toys out of your house than living in your house.

01:08:40.000 | I so desperately wish I could ship them all up and get them to somewhere else where the

01:08:44.440 | toys are not in such abundant supply.

01:08:46.000 | I feel embarrassed even uttering the words about it.

01:08:49.000 | But that's the reality of it.

01:08:50.840 | We find constant streams of toys flowing in from friends as hand-me-downs from friends

01:08:56.360 | and from family members.

01:08:58.520 | We find toys constantly when we're out trash picking and dumpster diving.

01:09:01.640 | They're just all over the place.

01:09:03.440 | So it seems pointless to spend money down at Toys R Us, which might be why they're

01:09:07.320 | going bankrupt.

01:09:08.320 | It seems pointless to us to spend money.

01:09:09.400 | And finally, we had a need for something.

01:09:10.760 | We were very excited that we could use these Toys R Us gift cards that were, I think, a

01:09:15.200 | baby shower gift a number of years ago.

01:09:17.480 | And so they put Strider bikes on rebate.

01:09:19.720 | We were able to go and buy it and I think it cost me a dollar or two out of pocket to

01:09:24.600 | make it up, which was great.

01:09:25.800 | So now we have two Strider bikes.

01:09:28.000 | But going on with the frugal strategies going forward and recognize something.

01:09:33.120 | I'm describing these for fun.

01:09:35.120 | I think most people who know me in person wouldn't necessarily know me as being a weirdo

01:09:41.200 | tightwad.

01:09:42.200 | I don't think that's the case, although I don't mind a little bit of that.

01:09:45.040 | But I think there are – I'm uncomfortable with being too radical or too extreme in some

01:09:50.280 | of those cases.

01:09:51.540 | But we were waiting for a bike, waiting to see what would show up.

01:09:54.880 | So after Christmas, some friends of ours had gotten their son, who's older than our oldest

01:10:01.360 | son, a new bicycle.

01:10:03.300 | And so he had his previous one.

01:10:05.120 | And so they were looking for a way to get rid of it and so we happily volunteered and

01:10:09.040 | very kindly, they offered a chance to – they said, "Hey, you want it."

01:10:15.800 | We offered to pay for it.

01:10:16.800 | It was a very nice bike.

01:10:17.800 | But they were just happy to have it go to a good home instead of just randomly tossing

01:10:21.160 | it down to Goodwill and they were just very happy to have it go to a good home.

01:10:25.080 | So we were able to get another free bicycle for my son.

01:10:29.080 | But it – and we're skipping the training wheels.

01:10:31.560 | I've been teaching him how to ride that, which my anecdotal experience thus far is

01:10:35.720 | I prefer the modern method of the strider bike.

01:10:39.120 | It has worked well so far with one experience so far.

01:10:45.480 | But it didn't have a kickstand.

01:10:47.120 | So he wanted a kickstand.

01:10:48.380 | So we went down and we were out shopping and we went down to Walmart and we priced out

01:10:52.040 | the kickstands.

01:10:53.400 | And so in that chance, I showed him, "Look, here's the kickstand.

01:10:56.260 | You can buy it at Walmart.

01:10:57.920 | Here's what it is.

01:10:58.920 | It's $6.29.

01:11:00.740 | So let's not buy it.

01:11:02.280 | Let's wait.

01:11:03.280 | We don't have to have it right now.

01:11:04.280 | There's nothing pressing about needing a kickstand.

01:11:06.720 | Let's just ride it down and see what else we can come up with and give it time."

01:11:10.840 | So we rode it down, rode down, kickstand, Walmart, $6.29.

01:11:15.200 | Now my intention was to come home and check online and see is there something cheaper

01:11:19.680 | on Amazon, maybe check the local bicycle stores or anything else, any other good ideas.

01:11:25.740 | But as we were on our way home, we went through our regular kind of neighborhood drive and

01:11:30.520 | lo and behold, there by the side of the road were some bikes being thrown away.

01:11:33.560 | So I got out and I picked which one was the least rusty and I grabbed that, brought it

01:11:38.320 | home and took the kickstand off of it and took it off, cleaned up some of the rust,

01:11:44.440 | tossed the rest of the bike out.

01:11:46.560 | And then with my son, I helped show him, we bolted it on his bike.

01:11:49.880 | I had to cut the kickstand and modify it a little bit to make it work.

01:11:53.520 | But at the end of the day, we were able to develop a perfectly functional kickstand for

01:11:57.920 | his bike.

01:11:59.080 | And he had the lesson of deferring gratification, which was my point in this story.

01:12:05.240 | He had the lesson of deferring gratification to say, "We have the money.

01:12:10.040 | If he needed the money, he's got the money in his spending money.

01:12:12.900 | I have the money.

01:12:13.900 | I can buy a $6.29 kickstand.

01:12:16.220 | But what a waste to buy something new when I can just recycle something that's used and

01:12:23.520 | get a little bit more life out of that product and just stop seeing so much waste happen.

01:12:28.640 | And I can teach my son delayed gratification.

01:12:31.200 | I can teach him to think carefully, not to impulse buy, and just to take time."

01:12:39.440 | To me, those are really valuable parenting lessons.

01:12:43.440 | Those are the kind of lessons that as a parent, you really – you wish they happened every

01:12:47.240 | day but they don't.

01:12:48.240 | You got to look for them.

01:12:49.240 | You got to look for them.

01:12:51.680 | But when you can find them, they're valuable.

01:12:54.620 | Now here would be just one more fun story from a parenting perspective.

01:13:02.440 | While ago for a birthday of my oldest son, I bought him a Nerf gun, little dart guns.

01:13:08.280 | I paid full retail price for it.

01:13:10.080 | I bought a brand new full retail price at – I think it was Target.

01:13:15.920 | He had wanted a gun like that.

01:13:16.920 | One of his cousins had one and I wanted to make sure I got him one.

01:13:19.960 | I think it's important for children to have toy guns when they're growing up.

01:13:23.400 | This is my opinion.

01:13:24.400 | It's very important from the perspective of gun safety.

01:13:26.720 | Some of you would be horrified at how unfun I am as a father with Nerf gun.

01:13:32.440 | The whole point of – for many people, Nerf gun is to shoot it at people.

01:13:35.640 | But I don't allow my children to shoot guns at people or to – and I force on them firearm

01:13:43.520 | safety rules.

01:13:44.520 | So I teach – you gun nerds will – may chuckle.

01:13:48.100 | But I teach them – they always have to be pointing the gun in a safe direction.

01:13:50.920 | I teach them about muzzling their legs so they're not muzzling their leg with a gun.

01:13:54.800 | I'm a nut.

01:13:57.280 | You know that.

01:13:58.820 | But I think it's really valuable for children to have toy guns so they can learn all of

01:14:03.120 | those rules of gun safety.

01:14:04.360 | Well, there's not even the tiniest danger of a paintball bullet or an airsoft pellet.

01:14:08.280 | We're not even talking about real full velocity weapons.

01:14:11.320 | We're just talking about Nerf guns.

01:14:13.440 | It's allowed to shoot at anything except people and animals.

01:14:16.540 | So that's the – and breakable stuff of course.

01:14:19.720 | So bought him a gun for his birthday.

01:14:21.840 | He loved it, super happy with it and he's enjoyed it.

01:14:24.200 | Well, he decided that his handgun wasn't so great and he wanted to have a long gun.

01:14:28.360 | So of course we started to go out and start pricing those things.

01:14:30.560 | Well, they're 20 bucks for this piece of junk, piece of plastic that you buy at the

01:14:34.760 | store.

01:14:35.760 | So one of the great benefits of the way that I have been teaching our children to handle

01:14:40.240 | money is that they have their money.

01:14:41.720 | I'm not going to buy him that.

01:14:43.920 | But he has his own spending money and so – if he wants to save for it.

01:14:47.280 | But thankfully he doesn't have enough money to buy it at this point.

01:14:50.720 | I think it's a total waste but I think as parents, you got to let your kids waste money

01:14:54.000 | sometimes, right?

01:14:55.000 | So we'll see.

01:14:56.000 | But the point is that we can work with him and I can say, "Hey, well, you keep saving

01:14:59.440 | and when you have enough money, then that would be the solution."

01:15:02.120 | But immediately that needs to go down on the price list.

01:15:04.240 | And now he doesn't have a concept of what $20 actually represents.

01:15:07.940 | But I do.

01:15:08.940 | I think that's an egregious amount of money to pay for a gun that's not going to be

01:15:12.160 | used and you have other ones that already do the job.

01:15:17.120 | But I've also got the lesson for him of looking and looking for it.

01:15:21.240 | And so we can use that and say, "Well, here's what the cost is.

01:15:24.000 | Let's look at some different options."

01:15:25.680 | We go different places and I'm teaching him to get the prices, have it in his head

01:15:30.120 | and then we're looking at all of the options.

01:15:32.240 | And so just last night, looking in a local dumpster, found a perfectly serviceable gun

01:15:39.040 | for now.

01:15:40.600 | And now he got the joy of saying, "Hey, I can have this one for free."

01:15:43.440 | Now it's not perfect.

01:15:44.440 | We're still waiting on one that shoots darts.

01:15:45.640 | This one doesn't shoot darts.

01:15:47.280 | But it's part of it and it's a really important and valuable lesson for him to learn to delay

01:15:53.360 | gratification.

01:15:54.360 | Yes, you'd like to have that but let's look for alternatives.

01:15:57.120 | Let's look for something that's free.

01:15:58.440 | Let's look for something that can be repurposed.

01:16:00.280 | Let's wait.

01:16:01.280 | Let's shop the used market.

01:16:02.320 | Those things are everywhere.

01:16:03.640 | It will show up on the trash pile.

01:16:04.840 | There's no reason for him to waste his $20 on a new one.

01:16:09.320 | Remember to write it down, put it in the price book and start comparing things while waiting

01:16:15.720 | to see where you find the best option.

01:16:18.480 | Maybe the best option will come from a store.

01:16:20.320 | Maybe it will come from a yard sale.

01:16:21.720 | Maybe it will come from the thrift store.

01:16:23.360 | Maybe it will come from a trash heap.

01:16:24.760 | Doesn't matter.

01:16:27.040 | It's the principle in the skill development.

01:16:30.920 | Let me ask you a question.

01:16:32.460 | That's what I'm teaching my children.

01:16:35.480 | Did your parents teach you that?

01:16:38.440 | Or did you have to learn it as an adult?

01:16:41.600 | Or do you need to learn it as an adult?

01:16:47.960 | I don't honestly think that you being able to buy tortilla chips for $0.12 an ounce instead

01:16:56.080 | of $0.13 an ounce is going to make you wealthy.

01:17:01.320 | I do honestly think that if you'll implement a price book and start using it, you could

01:17:07.080 | save probably a thousand or a couple thousand or for some of you multiple thousands of dollars

01:17:12.360 | off of your grocery budget this year and everything else that you buy.

01:17:16.520 | I do think that over the coming decades if you'll implement those skills, it'll save

01:17:20.840 | you tens of thousands of dollars.

01:17:23.400 | I do think that that simple habit and practice of shopping carefully for groceries will develop

01:17:32.200 | in you a character to look for deals on other things.

01:17:39.560 | I do think that that will lead to much increased wealth.

01:17:43.920 | As the things that you buy change from $0.12 tortilla chips to $120,000 sailing boats,

01:17:56.080 | your life will change and you'll be able to afford those sailing boats because you saved

01:18:00.240 | on tortilla chips.

01:18:01.700 | It's not the $4 or the $10 a year you saved on tortilla chips.

01:18:05.240 | It's how you saved on it and how you built those skills.

01:18:08.760 | Do you know what I notice about Costco?

01:18:14.360 | There are very few broken down beat up cars in the driveway or in the parking lot.

01:18:20.400 | At least at my Costco, I usually park next to a Lexus on one side and a Mercedes Benz

01:18:24.680 | on the other.

01:18:27.040 | Now causation correlation, how does that all work?

01:18:29.440 | I don't know.

01:18:30.440 | But I know there aren't a lot of people in there.

01:18:35.840 | Is that because they sell a lot of organic fancy stuff?

01:18:38.120 | Maybe.

01:18:39.120 | Is that because it's hard to get out of there for less than a hundred bucks because of the

01:18:41.000 | unit sizes?

01:18:42.000 | Maybe.

01:18:43.000 | But you can get some great deals there.

01:18:44.960 | But the rich people are there shopping.

01:18:47.920 | The habits you put in now are the same habits that will help you get deals on multimillion

01:18:54.240 | dollar deals years from now.

01:18:56.960 | Do not despise the day of small beginnings.

01:19:02.080 | Don't despise the day of small beginnings.

01:19:04.680 | You need that – by the way, that's an allusion to the book of Zechariah.

01:19:07.800 | You need those skills developed in time.

01:19:12.480 | Here's my final thing.

01:19:13.480 | I don't think that getting tortilla chips for 12 cents an ounce instead of 13 ounces

01:19:19.000 | is going to make you rich this year.

01:19:22.520 | But I do think that your kids understand tortilla chips and that by modeling the practice of

01:19:34.800 | deal shopping and unit prices, et cetera, you can accomplish a world of parenting good

01:19:42.760 | that is not possible in other ways.

01:19:45.800 | Whether that's showing the relevance of mathematics, giving them fun prices, fun things to do,

01:19:51.240 | or just showing them how to save money and how to – the value of a dollar, those are

01:19:56.640 | lessons that they will take with them.

01:19:59.920 | Your children – I can point to example after example after example.

01:20:02.760 | Your children can emerge from your household as careful, diligent stewards of the resources

01:20:08.400 | that they have with tens of thousands and in some cases, hundreds of thousands of dollars

01:20:15.080 | under their stewardship that they've earned, saved and invested.

01:20:19.880 | Or they can turn out like the kind of children who just walk into a local convenience store,

01:20:26.520 | pop a bag of chips on the counter and swipe their credit card.

01:20:29.600 | It's your job as a parent to make sure that that doesn't happen.

01:20:33.240 | That's it for today's show.

01:20:35.280 | I hope this content has been useful for you.

01:20:37.920 | A little philosophical there at the end.

01:20:39.960 | I hope you like my stories.

01:20:40.960 | It's always – man, those of you who are parents will know you share parenting stuff

01:20:48.080 | in public, you risk the wrath of the internet coming down upon you.

01:20:53.560 | But I share them.

01:20:54.560 | For those of you who will enjoy the stories, just what they are, just fun parenting stories

01:20:58.560 | as related to money.

01:20:59.560 | Thank you for listening to today's show.

01:21:01.560 | I appreciate your being here.

01:21:02.880 | If you'd like to support the show, please come on by radicalpersonalfinance.com/patron.

01:21:06.880 | You can voluntarily support the show.

01:21:08.880 | I've suppressed a lot of the ads out here recently and that's for a few reasons but

01:21:15.720 | ads will come back in the future I think but for right now I've been working on some

01:21:18.480 | other things just trying to finish up some products to sell to you and some really good

01:21:22.800 | stuff has been the hardest thing I've done in my business thus far and I've failed

01:21:26.280 | miserably.

01:21:27.280 | But I've also had some success.

01:21:29.080 | I'm still working hard at that and failure is a good chance to keep on pressing forward.

01:21:32.960 | That's what I'm doing.

01:21:33.960 | But in the meantime, I would be grateful to you if you gain value from this, if you'd

01:21:39.320 | like to send me some money, come on to radicalpersonalfinance.com/patron.

01:21:42.960 | You can do it right there, radicalpersonalfinance.com/patron.

01:21:45.720 | That's it for today.

01:21:47.200 | I'll be back with you very soon.

01:21:51.200 | God bless you all.

01:21:59.960 | This show is part of the Radical Life Media network of podcasts and resources.

01:22:05.600 | Find out more at radicallifemedia.com.

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RPF0512-Price_Book