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Friday, February 19, 2010

The long view on weekly purchases

Eggs are 88 cents this week at Scott’s and Kroger stores in the Fort Wayne area. That’s not much under my target price of 99 cents. But if you buy 10 packages at a time -- as I plan to do -- it‘s the difference between paying $8.80 instead of $9.90.

Actually, the cost difference is even greater than that, because I can’t always find eggs when I need them at my target price. Sometimes I wind up paying $1.19, or even $1.29, or once in a great while, $1.59. If I buy roughly a dozen eggs a week, and over the course of 10 weeks I buy two cartons at the 88 cent sale price, five cartons at my 99 cent target price, and one dozen each at the other prices I mentioned, then my cost for 10 packages of eggs comes to $10.78. Spread out over time, it doesn’t seem like much of a difference. But if you bought them all at once, you would certainly choose to pay $8.80 rather than $10.78, right?

There was a time when a minor sale price like this one would’ve enticed me to buy only one or two extra packages, because I was always having to balance my urge to stock up with my desire to not derail our weekly grocery budget.

Now, though, I let my “Grocery Holding Company” foot the bill. I’ll store the eggs in our garage fridge until they’re needed, and when I want a dozen eggs I’ll put $1 from my weekly grocery fund into my Grocery Holding Company envelope. That way I’m guaranteed a price just one penny over my target price, and the GHC, as I fondly call it, will see its $8.80 “investment” eventually turn into $10. It’s not much. But it’s a better rate of return than you can get on a savings account, or even many investment accounts these days.

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