Tuesday, 24 January 2012

On Money: Planned Spending & Maximising Saving Potential

Successful people are shrewd when it comes to shopping, their buying decisions to start with are planned, they do not do adhoc spending. They have a budget they stick to it, they have already decided what they are going to spend, what they need before visiting their favourite shop. They do not just visit the supermarket and decide what they want as they go like what most people do. A lot of people do not plan their shopping, sometimes a visit to the shops is triggered by one item which will have run out, it could be milk or bread, instead of just buying that pint of milk or that loaf of bread they end up buying other unbudgeted items like newspapers, gum, candy, chocolate e.t.c. Such that a grocery shop trip that was supposed to cost just over a pound becomes a £15 trip loaded with items bought on impulse. Successful people on the other hand do not purchase items on a whim without an carefully consideration of the need and uses of the items to be purchased. To entice people to buy on impulse is a science that supermarkets have dedicated time and money in order to increase their profits. So a way to beat them is to understand how they work

Supermarkets In A Nutshell

Supermarkets are designed both in store merchandising and the millions of pounds poured into market research to encourage and seduce people into buying and spending more than they need. When you enter a supermarket, the first smell to hit your nostrils is smell from the bakery, the in-store delicatessen with its array from different flavoured meats; the scent is designed to make us hungry and more likely to buy more food on impulse when in fact we just wanted to get household cleaning products. It is also imperative as you read the guide below to know outright that before your trip to the supermarket you need to have eaten a decent meal or a snack such that you will not go hungry while shopping. Even the layout is designed to milk the most from impulse buyers, the sweets, the candy, chocolate and magazines are placed by the till to entice you to grab them on our way out even when they were not on our budget. The aisles themselves contain different items such that as we walk around to get to the milk section we will have passed through different aisles stuffed with items that we might impulsively buy. The items that will make the most money for the supermarket are placed at eye level so it is always best to scan the upper and lower shelves for cheaper items. Seedless grapes and other attractive treats are usually near the store entrance, often below cost price, to entice us in. Similar signs and displays are used elsewhere to promote deals, even when they're not on sale. Bright colours and the words 'discount' and 'sale' make us feel good, yet the reduction may be pennies and cheaper equivalents or alternatives hidden elsewhere.

Grocery Shopping

  1. One of the reasons food gets wasted is because people buy more than they need. A lot of families in UK wastes an average of £600 per year in food wastages which equates to £50 a month. Imagine if you have £50 a month in savings account which gives you interest of about 8% at end of the year you will have saved £600 plus the interest of £48. Use this to incentives yourself on the need to do a proper grocery planning that saves you money and will not result in shortages. The best way to tackle food shopping for families is to design a meal plan,a weekly or a monthly meal planner is difficult to devise.

    a) Write out a plan for your meals for the week or month ahead, get your family involved by asking them to suggest what meals they’d like to have.

    b) Make a shopping list so you only buy what you need, check what you have left from last week. Can you use it up? Why not be creative and try something new.

  2. You can create your own meal plan on your computer using a planner in email software packages such as outlook. There are also plenty of free online applications that can help you many supermarkets have online meal planners.
  3. The golden rule once you have done the meal planner is to stick to what is on the list and not be tempted by things you might not use. It is also recommended that you buy your fresh vegetables and other food items loose where possible to avoid buying more than you need. Buy One Get One Free (BOGOF) is a marketing gimmick for supermarkets and grocery shops, do not be tempted to buy them thinking you have had a bargain unless you can definitely use the free one, or give it to a friend. BOGOF items in special in fresh produce should be completely avoided unless as above you can use the free item or you can give it away because both items will have the same expiry date.
  4. Another trick is to have in your cupboards food items that will enable you to make a quick meal with left overs. So items such as Flour Sugar, Herbs, Spices and condiments, Pasta, Rice, Ready made sauces, Oils (olive, vegetable, sunflower, Canned fish, Tinned tomatoes, Vinegar (white wine, balsamic).
  5. Another tip that can help reduce your grocery spend is buying meat in bulk, most farms sell meat directly to the public and on comparison you will find that it is cheaper than buying pre-packaged portions from your local supermarket.
  6. It would also help to consider store's own brands of items such as cereal, instead of sticking to premium brands where the difference is packaging, product placement and price and has nothing to do with quality.
  7. Compare prices the best tool in UK is mySupermarket, use it to find where som items are cheaper, where there are deals

Real Savings

Suppose you have made a list of essential items, used some of the tools suggested above to determine where you can get items cheaper. You are also working on a weekly or monthly meal planner as suggested to minimise food wastage. On your trip to the supermarket you have discovered that you have got some items cheap than what you had budgeted for, which leaves you with some change it could be £10 or even £5. Instead of finding a item to buy with those savings to indulge yourself it is best if you took that money and deposited it into your emergency fund savings or to top up your holiday savings account or better still any savings goals you have. That is what successful people and people who will not settle for less do, they take advantage of real savings they gain from sales and bargains not to overspend on on unbudgeted items rather to boost their savings.

We spend an average of £3300 a year in food and groceries, if we can find savings of 15% on that budget, it could boost what we ar already saving from our earnings with an extra £500 a year. Start today find savings in your grocery list and increase the amount of money you save every year.

1 comment:

Godfrey Mushandu said...

Well written and very practical advice.