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preparing for snacks

I know it’s been a while.  But I am back and hope to try to update more regularly.

So, without further ado… preparing for snacks

Consider the following situation:  Your wallet is empty and you need ₪100 in order to buy groceries.  You can either (1) go to the atm next to the supermarket and pay ₪3, (2) walk 20 blocks to your bank’s atm and take out money for free, or (3) you pay an extra ₪2 to pay using your credit card.

In this case, you’re probably weighing a simple ₪1 difference to see if it is worth it to use cash or credit; it hardly seems worth it to walk 20 blocks back and forth for ₪2.

But there is another way to look at this. You would have saved money had you taken out money from your atm before you went shopping in the first place.  In retrospect, you’re paying a ₪2 fine for not planning in advance.  But this goes far beyond ₪2 when shopping.

Consider a family going to the mall.  The children so desperately want some candy from the store.  The parents look for the cheapest candies and find some bamba for ₪5, the cheapest item in the store, and get it; after all, the children have been behaving well and deserve something.  The problem here is that the economic choice is being viewed as the best option available at the time.  But another option existed and was missed.  Had the parents picked up bamba at a ₪1 store and kept it with them in the car for these occasions, then they would have saved a bundle.  In fact, the parents could stock up on potato chips, energy bars, cheetos, or bisli and pretty much never run into the situation of getting the ₪5 bamba.

The practical applications are limitless and go far beyond brining your own water to the movie theatre (judging by the price for the water they sell there, it is probably laced with gold.)  Bring a book to the airport instead of buying one for retail in the bookstore in the airport.  Pregnant women should carry snacks, in case they get hungry.  And men, never wait until you’re in the airport to buy jewelry.  Basically, be prepared and think in advance – it’s the most economic option.

5 things you can do BEFORE you foodshop in order to save money

#1 – Make a list of what you need – Sticking to a list will help you avoid impulse buys and other unnecessary expenses.

#2 – Go through your fridge and pantry – Look to see if you have anything on your list.  You’ll be surprised how often we buy things we already have.  Going through these spaces will also clear away some space for you to easily put away the food when you get home.

#3 – Estimate what you think you should spend – write down your magic numbers next to your purchases so that you can check that you’re paying the right amount for the stuff you plan to buy.

#4 – Put a letter next to each item so you’ll know where to buy it – I put a “Hey” next to the items I get at Hiper Dudu, a “Shin” next to the stuff I get at Shefa Shook and a “B” next to the stuff I will get at the bakery.  If you’re shopping at a few stores, this can allow you to break down your list so it will be easier to follow.  Getting in and out of stores quickly is the key to not buying unnecessary items.  It also will buy you the time to shop at a few stores and save yourself some money by taking advantage of the different savings of the different stores.

#5 – Eat! – We buy more when we are hungrier.  Suddenly all the pretty pictures on the packaging look much more attractive.  Stores actually take advantage of large open spaces to get you to walk more and build up an appetite and finally at the end…you’ll smell fresh bread and overspend.  Don’t let this happen.

Also, don’t forget to bring either a ₪ 5 coin or a key-ring so that you can take a shopping cart.  It’s very annoying to make it there and have to spend 10 minutes breaking change in order to use a cart.

where should you do your foodshopping?

The most important trick to saving money when you go shopping is choosing where to shop.  In this post I intend to explain the marketing behind Israeli supermarkets and how you can save by beating them at their own game

Why is there a Shufersal Sheli, Shufersal Big, and and Shufersal Deal? Aren’t they all the same company?  This is a classic case of market segmentation.  Segmentation is dividing people into groups, or noticing their natural groupings, and responding with a marketing strategy designed to meet their needs, or more often, milk each one for all it’s worth.

There are generally 5 types of supermarkets in Israel:

#1 – The poor person’s supermarket (Mega Bool, Shufersal Deal) – This supermarket is aimed at low income consumers as is designed to take complete advantage of them.  A lot of marketing research has shown that while low income consumers struggle to save on the everyday items, when they finally decide to splurge, they do so irresponsibly.  Most items in a poor person’s supermarket are available in a generic brand (Mega or Shufersal brand), but the items that are not are overpriced.  Wine, baked items, and meat are a huge ripoff in these places.  I usually only use this kind of supermarket for the generic brand items, which usually always fit my magic numbers and save me a lot of money.

#2 – The Charedi supermarket –  These supermarkets are always kind of funny.  You can find seforim, tzitzit, a suit, and do all your food shopping under one roof.  There is always a bargain on “Jewish” essentials (wine, chulent meat, etc) but most other items are generally overpriced.  These stores know that you think about Shabbas when you shop and are likely to rip you off on cereal, tuna and dairy products.  For that the best place is …

#3 – The “shuk” supermarket – These supermarkets do not exist in large chains; rather they are independent supermarkets (or part of a small chain) and situated near a shuk (Where I live in Petah Tikvah, Hiper Dudu is a good example.)  These supermarkets try to compete with the shuk next door by offering a bit more convenience.  Their fruit and vegetable prices are a bit more than the shuk itself, but meat, fish, and dairy products are usually a great buy.  These stores usually do not carry any generic brands, so I do not use them to buy my canned goods (unless I want a name brand.)  Cereal is also usually cheapest in these kinds of places.  Be warned though, these places are crowded, pushy, and generally not so easy to navigate.  It is the classic tradeoff of convenience for price.  If you are willing to pay a bit more for convenience try…

#4 – The middle class supermarket (Mega, Shufersal Big) – These supermarkets are for families who can get along with some kind of deal on something each week.  The customers are somewhat brand aware, but will also go generic.  These stores sometimes have good deals on non-generic items, but are generally a bit above the prices I want to pay (keep in mind, it is still much cheaper than the non-generic items in the poor person’s supermarket).  When I have a bunch of kids around me one day, I may want to shop here and pay the extra 50 shekels to have an easier, more comfortable evening shopping with my family.

#5 – The rich person’s supermarket (Mega BaIr, Shufersal Sheli) – This supermarket is aimed at people who are picky about brands, need connivance and aesthetics, and don’t check prices.  These supermarkets are usually located very conveniently (in a mall, in a nice residential area), and charge extra for it.  I usually only shop in these stores when I have no other option.

Combining two of the above options will help you save regularly when shopping.  I personally shop for generic items at the poor person’s supermarket and get everything else at the shuk supermarket.  Depending on your needs, you may choose another combination…

what are you really paying for?

Recently I have been having a discussion with one of our readers about buying low quality vs. buying high quality products (it didn’t start that way, but it’s where we ended up.)  This entire debate is really a question of knowing what you are buying and what you are paying for.  Here are some classic examples:

Electronics – When I buy an expensive piece of electronics, I want not only the product, but a warranty for if it breaks.  Not only that, I may want a warranty where I can go into the store and simply replace it, or else have them ship it out for me.  This costs extra and usually comes in the form of a name brand.  Sometimes there are electronics stores, that in order to maintain loyalty, will do it as a service for customer who buy from them.  When I bought my iron (I iron all of my shirts) I wanted an iron (1) that did not need purified water (yes, they exist in Israel and they are a huge money and hassle saver) and (2) would be replaced in the store on the spot if it broke (obviously you have to know if the store is reliable; I did my homework).  My verbalizing what I wanted, I made a virtual checklist and when an inexpensive, but reliable store offered me an item fit the bill for a good price, I went for it.

Ambiance – When you go to a restaurant, it is not the food you pay for but the ambiance.  A cup of coffee costs less than a shekel, but the other ₪ 9 is for the pretty place you’re sitting in.  If you think about it, there are plenty of ways to turn up the ambiance and save money.  One time my wife and I were in a restaurant.  We ate dinner and were thinking of dessert.  Dessert would probably be somewhere in the vicinity of ₪ 40 (for the cake and some coffee) but I proposed an alternative.  I proposed that we bench, pay, leave the restaurant and buy a pint of Ben and Jerry’s (₪ 22)  and walk in the park while having dessert.  My wife agreed to the option and we had an even more romantic evening and saved some money.  It’s not being cheap about the dessert, it’s realizing that you’re paying for the ambiance and knowing that you can do a better job yourself.

the magic number system

The price of an item in a particular supermarket serves a particular interest.  Most of the time, some items are sold cheaper (occasionally even at a loss) in order to pull you into the store so that you’ll do all your shopping there, allowing the supermarket to profit on the more expensive items.

But by watching how much you spend on each item, you can be a step ahead.  Obviously it is annoying to go back and forth to a bunch of supermarkets, but by picking two good supermarkets, you allow yourself the flexibility to take advantages of the discounted items.  But then how do you know if an item is priced well, without going back and forth to each supermarket?

To answer this question I developed the magic number system.  A magic number is a price that I associate with a food item where I know that this price is a good price.  When I see items sold for their magic number or less then I am more likely to buy more of it and keep it for when the price rises again.

Here are some examples:

₪ 4 – Tuna

₪ 6 – Olives

₪ 1.5 – Tomato paste

₪ 14 – Cereal (500 g)

₪ 1 each – Eggs

₪ 4 – Chic peas

₪ 10 – Ground meat

₪ 4 – Pasta

₪ 9 – Bread

₪ 7 – Challah

Let’s say I wanted to add granola bars to this list. I would, while buying granola bars regularly, take notice of the price of granola bars for the next month, waiting until I find the absolute lowest price.  That price (plus a bit) is the magic number.  Next time I see granola bars at that price, I’ll stock up.  If I see the price is too high, I’ll skip it.  If I see one shop regularly charges more for this item, then I’ll buy it at the other one.  The trick isn’t to buy items at the lowest price possible each week; it is to always buy items at a good price.

But be warned, do not buy perishable items and do not over-consume.  If buying more causes to eat more than you regularly would, then you are spending more, not less.  When stocking up, always ask yourself #1 – if I buy it, will some of it go to waste?  #2 – if I buy it, will some of it go to waste (considering my overeating as waste)?  #3 – Do I have the proper room to keep this in storage?  If you an answer these correctly, then use the magic number system and stock up.  (I know I said this once before, but it bears repeating whenever talking about buying in bulk.)

watch out for deceitful marketing

In the mind of many modern day companies, the line between looking good for your date and drugging your date to think you look good is so often blurred.  Companies have no problem offering false hope, misinformation, and actually brainwashing you to change your eating habits in order to consume their products regularly.

But remember – knowledge is power.  By understanding what these companies are doing, you put yourself a step ahead and can live a healthier and less wasteful life.

So, without any further ado, the hall of shame:

#1 – Soft drink companies – Do you chug soft drinks?  Why?  They taste good, why not savor it?  Because the companies have told you that they quench your thirst when they do not.  If you really want to enjoy a coke when you’re thirsty, drink some water, then when you’re not shoving liquid down your throat because of an intense thirst, drink your coke.  You’ll actually have time to enjoy the flavor.

#2 – Anything for children – You know what I loved about Wall-E?  It was the fact that I was hearing a strong message against consumerism from Disney.  And of course this message made it clearly onto every Wall-E toy, towel, lunch box, poster, and DVD.  Advertising towards children employs one simple strategy – to make your kids annoy you.  Studies show that the more your kids annoys you, the more likely you are to buy them stuff.  You need to take a firm strategy in teaching your child to get over whims and the need to buy.  At the same time, realize that the child is being brainwashed and put into a painful dilemma.  Only by working as a family can you overcome consumerism and teach your children for their financial future as well as yours.

#3 – News corporations – News sites no longer deliver the news.  They exist to group demographics in order to make it easy on advertisers.  But it really gets dangerous when the News corporations start letting their advertisers determine the news.  When I was looking for a job, I was interviewed by easynet, an SEO company in Herzeliya.  This company claimed that they actually write articles for ynet that tie in the advertisers’ message into the reviews on the site for marketing purposes.  But to be honest, ynet is not alone; most news outlets engage in similar deceptive practices.  The only way to determine the true news is to make the following equation:  Reported news – company bias (grouped demographic) – effect of advertisers = actual news.  For example, CNN reporting – liberal bias – any credibility about high-tech gadgets = actual news.  Also, FOX – conservative bias – any credibility about how *important* it is to now you credit score now = actual news.

#4 – FOREX companies – In business school we were told to play a FOREX game where we had to trade currencies and “pay” a percentage fee for every transaction.  Over 90% of the class had “lost” big money within a few short weeks.  FOREX sites promise big payoff for chances that are significantly worse than blackjack.  At least in blackjack, you gamble what you have and loose your money at a normal pace, in FOREX sites, your money can be leveraged so that you will loose it up to ten times faster.  I cannot stress how important it is to stay out of this market.  FOREX is gambling, with all the bells and whistles of addiction.  If anyone you know is involved in this dangerous market, please plan an intervention before he or she loose all of his or her life savings.

don’t let the layout rip you off…

 

There are some stores that are designed to rip off the typical consumer.  Theses stores know that they only have one type of necessary item, so they intentionally place it in the back of the store, forcing you, the consumer, to go through the entire store and possibly buy one of their tremendously overpriced items:

#1 – Local pharmacies, especially Nu-Pharm and Super-Pharm.  These places sell one thing you need – drugs.  Everything else is eye candy to bait you while you’re waiting.  They intentionally under staff the pharmacy in order to maximize your stay in their stores where nothing is priced reasonably.  It is important that if you go to these stores, to resist the temptation to buy any household items, specifically food, unless you know for a fact that the price is less than the local super-market.  Don’t be fooled by a sale price – usually the sale price is still even higher than the local supermarket price.  Also, be aware that most items that are sold at pharmacies are around 30% less at your kupat cholim’s pharmacy.  Most items, including coldex, strepsils and even gauze pads, are partially subsidized by your kupat cholim, so there is little excuse to go to one of the aforementioned money-pits.

#2 – Book stores, specifically well known chains like Steimatsky – The important item here is children’s books.  Most adults read a book once or twice and put it aside forever, but children need the comfort of a familiar book to be read hundreds of times.  When going to a book store, focus on the children’s section and skip the adult section, which is designed to rip you off (notice how the children’s’ section is always in the back, just like the pharmacy, and does have places for adults to sit, so they’ll stand and look around the more interesting areas.)  If you’re looking for books to read in English, try looking for local social groups and charities where the members are English speaking (these libraries may cost a bit of money to join, but certainly less than buying books.)  AMIT, a non-for-profit in Israel, has a small library of English books in the Talipiot area.  Many Yeshivot, seminaries, and community centers all of the country carry a small library of English books as well.

The point is not to be fooled by the layout of a store.  Bring a list and rarely deviate from your needs.  Know why you’re going to the store and resist the urge to become the robot that all the marketing wizards want you to be.

How to pay LESS for your purchases DESPITE the recent increase in VAT

In order to understand what I am about to explain, I need to bust one myth.  The price of an item has little to do with the cost.  The price of an item reflects the image and, most importantly, how much the consumer will pay.  Cost is only used to determine IF the item should be sold, based on the price it can be sold for and its profitability.

So how can you spend less?  Go to a neighborhood where people don’t spend as much money.  Prices for most items are cheaper in poorer neighborhoods Because (1) these people don’t have the money to spend and (2) the corporations are trying to get as much money as they can from each demographic, corporations have to charge less in these areas in order to get a sizeable profit.

This is not limited to food items.  Electronics (space heaters, extension cords, converters), toys, clothes, and furniture are incredibly cheaper in poorer neighborhoods.  And there is usually little to no quality difference; most items are even from the exact same brands.

Back when I was in Yeshiva in Har Nof, I went to Mea She’arim to buy a heater, because I found that in Har Nof (a middle last area) the heater cost ₪ 100, while in Mea She’arim (a poorer area) it was only ₪ 30.

But won’t you have to pay more anyways because of the increase in VAT?  Not necessarily.  An increase in taxes does not always fall on you, even if the government says it will.  When a tax is levied, the greater burden of the tax will fall on the more inflexible of the buyer and seller.  The explanation is pretty long and involves too much math, but to summarize, if you can go to a cheaper supermarket, the original seller will have to decrease his price, thus absorbing more of the tax.  So by shopping in the poorer neighborhood, you are not only saving yourself money, but causing your local seller to decrease prices, and begin to unburden yourself of the VAT tax.

7 tips for foodshopping in Israel

Think you can’t save money while food shopping?  Think again.  This a list of tricks that marketing people use and how you can beat them at their own game.

#1 – If it’s at eye level, it’s more expensive.  Try comparing items on the lower shelves in order to save some money (by the way, the most expensive candies and cereals for kids are on the kids’ eye level).  The cheapest items though are usually placed above eye level (most inconvenient to get to.)  The main thing is to compare all of the prices and not take what they stick in your face.

#2 – Supermarkets make more money when you buy in bulk.  Why is this?  After all, don’t you save money by spending less?  Not really.  Buying in bulk causes you to waste a lot more food.  By waste I mean either the food goes bad or you overeat.  When I have more cereal in the house, I snack on it.  So I use more and buy more.

When buying in bulk ask yourself the following three questions:  #1 – if I buy it, will some of it go to waste?  #2 – if I buy it, will some of it go to waste (considering my overeating as waste)?  #3 – Do I have the proper room to keep this in storage?

If you can answer these three questions correctly,  then you can buy it.  Otherwise, buy the lesser amount and pay more per item – you’ll be paying less overall.

#3 – Supermarkets in Israel will mess you over because they think you’re too lazy to do anything about it.  Supermarkets often times will not give you the sale prices or else purposely mislabel sale items because they know you won’t go back and do anything about it.  Don’t be embarrassed though – stop the line and demand the price advertised.  If they refuse then don’t buy the item.  If they rang it up, then tell them to take it off.  But under no circumstances should you pay more for the item than you thought you should have when you looked at the item.  Go back another time for the item if necessary, but do not throw out your hard earned money on their dishonesty.

#4 – Don’t be fooled by an item with no price.  If I see an item with no price, I take it for a price check.  If the price check is too long, then I take the alternative I would buy along with it to the cashier.  When I pay, I ask the cashier to ring up both of them and then tell him to remove the more expensive one.

#5 – The most dishonest price you can see is a price for a half-kilo.  This is a little trick Israeli fruit vendors pull in order to get you to buy overpriced fruit.  Turn all prices into one unit (price per kilo) and then decide.

#6 – Buy cheap ingredients and make some of your food.  Tomato sauce is expensive, but tomato paste is dirt cheap.  Just add water and some oregano.  Chummus can be made with some chic peas, tehina and a hand blender for half the price.  Olive spread can be made for half the price – just buy olives, add oil and use a hand blender.  Cream cheese can be made by mixing 3 yogurts, 2 sour creams and some salt (let it dry on a cloth for a day or so).  All of these items add up and you can save on average ₪ 50 a week doing this.

#7 – Only buy price-controlled items at the makolet.  The price of cheap bread is mandated by the government.  The price for Ein Gedi water is always ₪ 12.  These items can therefore be bought at the makolet.  Just about everything else is incredibly overpriced.