We have all seen news stories about people who have been gardening in their backyards and found glass jars full of money. Obviously these jars were left by the previous owner in an attempt to save. And while this might have been a more common thing to do 50 years ago, in modern day times it verges on insanity. But some people still do this even if they use different methods to achieve their goal.
A friend of mine used to work in one of the big banks' call centres. He would deal with account holders and customers daily. One sort of customer the banks would absolutely love is the kind they nicknamed 'the lazy money customer'. The lazy money customer has a sizeable savings amount in their everyday savings account, not earning any intrest.
Three Years On, Have Supermarket Prices Gone Up Again
Each year for the last three years at Mr Home Budget, we have been tracking 66 products from our local Coles supermarket, BWS bottle shop and Shell service station. These are everyday products which we buy every year in the same month. Then we work out how much they have gone up from one year to the next.
From a starting point of $308.68 in 2009 the prices rose 2.11%, one year later in 2010. The price in 2010 was $315.19. But from 2010 to this year they have gone up 5.82%. Now they cost $334.39.
Since mid 2009 over the last two years they have risen by an average of 4.08%.
We track these items very closely and tightly. For example when we first started in 2009, Cottee’s cordial was sold in 2 litre bottles. However they are now sold in one litre bottles; and it is a more concentrated mix. Meaning it makes up the same amount of 2 bottles. So we have worked backwards to make sure our prices are true and accurate.
Also if a brand has discontinued a size (for example the 3 litre bottle of milk). We purchase the closest one to a 3 litre bottle and work out how much it would be to fill up the 3 litre bottle with the new size. We are very hard nosed about making sure the figures are 100% accurate.
But why do we do this you might ask? Many people forget about inflation affecting their purchasing power. As you would know, prices go up each and every year and you would get a pay rise to cover these price increases.
However, what about if prices go up by 3% and your pay only goes up by 2%. Now this is a problem. Because while you are earning more, in reality your purchasing power has gone down! This is a great guide to see if your latest pay rise is above what supermarkets are increasing their costs by. Or is it below it?
If you would like to see last year’s article click here.
Here are all our products and what ones have gone up or down since last year.
Coca Cola 24 Pack Last year’s price $20, this year $26.45 an increase of $6.45
Choice Beef Mince (4 Star) 0.574 grams Last year’s price $5.74, this year $6.89 an increase of $1.15
Beef Scotch Fillet Steak 0.298 grams Last year’s price $8.94, this year $7.75 a saving of $1.19
Nestle Milo 750 grams Last year’s price $9.57, this year $10.05 an increase of $0.48
Ski Yogurt Wild Strawberry 200 grams x 2 Last year’s price $2.69, this year $2.69 no change
Arnott’s Jatz Crackers 250 grams Last year’s price $2.89, this year $2.89 no change
Maggi Extra Delicious 2 minute noodles Last year’s price $0.96, this year $0.97 an increase of $0.01
Holbrook’s Worcestershire Sauce 150ml Last year’s price $1.54, this year $1.37 a saving of $0.17
Heinz Ketchup Upsidedown 500ml Last year’s price $2.79, this year $2.79 no change
Cadbury Block of Chocolate 200 grams Last year’s price $4.29, this year $4.29 no change
Smiths Twisties 90 grams Last year’s price $1.56, this year $1.56 no change
Farmers Union Iced Coffee 600ml Last year’s price $2.95, this year $2.95 no change
Mars Bar Chocolate 53 grams Last year’s price $1.69, this year $1.62 a saving of $0.07
Bananas 1.277kg net Last year’s price $3.42, this year $17.85 an increase of $14.43
McCain’s Pizza 500 grams Last year’s price $6.29, this year $6.29 no change
Dairy Farmers 2 Litre Milk Last year’s price $3.45, this year $2.98 a saving of $0.47
The Advertiser Newspaper Last year’s price $1.80, this year $1.75 a saving of $0.05
Mount Franklin Chilled Water 1.5 Litre Last year’s price $4.12, this year $2.59 a saving of $1.53
Strawberries 250 grams Last year’s price $3.88, this year $4.98 an increase of $1.10
Meadow Lea Margarine 500 grams Last year’s price $3.49, this year $3.00 a saving of $0.49
Bega Tasty Cheese 750 grams Last year’s price $9.99, this year $10.59 an increase of $0.60
Uncle Tobys Le Snack 132 grams Last year’s price $4.49, this year $4.49 no change
Colgate Toothpaste Jumbo 174 grams Last year’s price $2.97, this year price $2.97 no change
Mars M and M’s Last year’s price $3.75, this year $4.74 an increase of $0.99
SPC Baked Beans Regular 425 grams Last year’s price $1.00, this year $1.63 an increase of $0.63
Kraft Vegemite 220 grams Last year’s price $3.76, this year $3.76 no change
Tip Top Sunblest Bread 650 grams Last year’s price $3.79, this year $3.29 a saving of $0.50
Spray and Wipe Trigger Pack 750mls Last year’s price $5.92, this year $4.48 a saving of $1.44
Cadbury Frozen Ice Cream 2 Litres Last year’s price $6.79, this year $6.99 an increase of $0.20
Heinz Spaghetti in Tomato Sauce 820 grams Last year’s price $2.59, this year $2.59 no change
Rexona Deodorant 150 grams Last year’s price $6.29, this year $6.62 an increase of $0.33
White Wings Plain Flour 2 Kilos Last year’s price $3.73, this year $4.00 an increase of $0.27
CSR Sugar 2 Kilos Last year’s price $3.49, this year $2.50 a saving of $0.99
VB Stubbies 24 x 375ml Last year’s price $45, this year $47 an increase of $2.00
Kelloggs Cereal Rice Bubbles 490 grams Last year’s price $5.09, this year $5.09 no change
Maggi Super Noodles 68 grams Last year’s price $1.00, this year $1.92 an increase of $0.92
Lipton Black Tea Bags 100 pack Last year’s price $3.65, this year $3.61 a saving of $0.04
Cottee’s Cordial Raspberry 2 Litre Last year’s price $4.04, this year $4.32 an increase of $0.28
San Remo Spaghetti Thick 500 grams Last year’s price $2.25, this year $2.25 no change
Glad Plastic Wrap 30 metres x 33cm Last year’s price $2.89, this year $2.89 no change
Kraft Parmesan Cheese 250 grams Last year’s price $6.49, this year $6.46 a saving of $0.03
Trix Dishwashing Liquid 1 Litre Last year’s price $2.15, this year $1.79 a saving of $0.36
Purex Toilet Rolls 9 pack Last year’s price $5.19, this year $3.33 a saving of $1.86
Daily Juice Apple 2 Litres Last year’s price $4.99, this year $4.00 a saving of $0.99
Schick Quattro Titan Razor Blades Freestyle 6 Cartridges Last year’s price $19.99, this year $19.99 no change
Listerine Mouthwash 1 Litre Last year’s price $9.89, this year $8.50 a saving of $1.39
Panadol Tablets 24 pack Last year’s price $2.00, this year $2.99 an increase of $0.99
Arnott’s Monte Carlo 250 grams Last year’s price $2.39, this year $2.39 no change
Mitani Chicken Salt 100 grams Last year’s price $2.05, this year $2.05 no change
Vili’s Pasty 150 grams Last year’s price $2.69, this year $2.00 a saving of $0.69
Arnott’s Barbeque Shapes 200 grams Last year’s price $2.00, this year $2.60 an increase of $0.60
Cottee’s Topping Thick and Rich Chocolate 615 grams Last year’s price $3.45, this year $3.45 no change
Kirk’s Drink Snow Top 1.25 Litre Last year’s price $1.52, this year $1.62 an increase of $0.10
International Roast Instant Coffee 250 grams Last year’s price $7.95, this year $7.95 no change
Prepacked Carrots 1kg Last year’s price $1.89, this year $1.50 a saving of $0.39
Chicken Breast Fillet 2 pack skin off 0.378 grams Last year’s price $5.29, this year $5.29 no change
Pork Loin Steak 0.240 grams Last year’s price $5.04, this year $4.32 a saving of $0.72
Nobby’s Salted Peanuts 375 grams Last year’s price $2.95, this year $3.34 an increase of $0.39
Three Threes Australian Pickled Onions 520 grams Last year’s price $2.42, this year $2.86 an increase of $0.44
Sirena Italian Tuna in Oil 95 grams Last year’s price $2.24, this year $2.24 no change
Ardmona Chopped Tomatoes 400 grams Last year’s price $1.63, this year $1.52 a saving of $0.11
Edgell Corn Kernels 420 grams Last year’s price $1.62, this year $1.64 an increase of $0.02.
McCain’s Peas 500 grams Last year’s price $2.18, this year $2.18 no change
Unleaded petrol 1 litre Last year’s price $1.33, this year $1.44 an increase of $0.11
Diesel 1 Litre Last year’s price $1.29, this year $1.14 a saving of $0.15
Gas 1 Litre Last year’s price $0.58, this year $0.62 an increase of $0.04
So the big question is, “Have your wages gone up an average of 4.08%?” Your wages would have had to go up twice in this period by this average. That is just to keep up with these tracked products.
Now of course we only track 66 products. And there are thousands of products out there, so this is only a very limited survey. However, it does give you a good idea as to which way prices as a whole are moving.
Last year in Oct of 2009 we did a story called “What is inflation and how does it affect you?”
If you missed the story or need a reminder, click here!
What we did was purchase 34 standard products from Coles supermarkets on the 21st of August 2009. These products included everything from Coke, bread and even meat. The idea was that each year going forward we would purchase the same items on the same day. Then we could track year to year how much these everyday items changed in price.
However we have changed the rules a little bit. After talking to some people in supermarkets, they have suggested we purchase the items in July each year. This is because it is the start of the new FY. We agreed that it would make more sense to do this. As this is where you could check the price changes in food vs. your salary or incoming wage rises.
Why is this important? Well we give more details later in this article as to why this is so incredibly important to your home budget. And believe me tracking inflation is very important to you.
Below you can see the difference between the old prices vs. the new prices. Now remember this has only been since Aug 2009 and not the full year. However next year we will do a full year.
*** Please note some products had to be adjusted. For example we purchased beef steak fillets in 2009. We purchased 0.298kg. In 2010 we could not purchase exactly 0.298kg. So we have worked out what it would cost us per kilogram in 2009 vs 2010. All the changes have been to the orginal 2009 size. This means we are comparing apples with apples. What this means is it is accurate. Any product that we could not purchase at the same weight we have indicated***
Before we move onto the differences in product costs we shall remind you that we have purchased these goods on the backdrop of Coles making some major price cuts on different brands storewide. Remember since the year 2000 to 2009 Australia had the highest rising food prices for any OCED country. An average of 4 percent a year. So places like Coles and Woolworths have made plenty of profit on the back of this. In fact some people have suggested (including me) that the reason we have had the highest rising food costs is because we have a duopoly with Coles and Woolworths.
However in June, Coles announced their price drop campaign.
Due to this campaign, we believed the overall cost of our shopping experience would be cheaper. As the Coles advert indicates, prices are down and staying down on things that customers buy most at Coles. Surely our basket of food staples would be cheaper? So let’s see what happened.
Coca Cola 24x 365ml can pack $20.00 Old price $23.99, a saving of $3.99
Choice Beef Mince (4 star) 0.511kg $5.11 total price This works out to be $10.00 a kilo Total price under the 2009 measurement of 0.574kg is $5.74 Old price $6.31, a saving of $0.57
Beef Scotch Fillet Steak 0.458kg $13.74 total price This works out to be $30.00 per kilo Total price under the 2009 measurement of 0.298kg is $8.94 Old price $8.94, a saving of $0.00
Nestle Milo 750 grams $9.57 Old price $7.00, more expensive by $2.573
Ski Wild Strawberry Two Pack 200 grams $2.69 Old Price $2.69, saving of $0.00
Arnotts's Jatz Crackers 250 grams $2.89 Old Price $2.66, more expensive by $0.23
Maggie Extra Delicious 2 min noodles 72 grams $0.85 This works out to be $11.80 per kilo Total price under the 2009 measurement of 82 grams is $0.96 Old Price $1.01, a saving of $0.05
Holbrook's Worcestershire Sauce 250ml $2.59 This works out to be $10.36 per liter Total price under the 2009 measurement of 150ml is $1.54 Old price $1.54, a saving of $0.75
Heinz Tomato Ketchup Upside-down 500ml $2.79 Old Price $2.76, more expensive by $0.03
Cadbury Block Chocolate 200grams $4.29 Old Price $3.00, more expensive by $1.29
Smiths Twisties 90grams $1.56 Old price $1.56, a saving of $0.00
Farmers Union Iced Coffee 600ml $2.95 Old price $2.95, a saving of $0.00
Mars Chocolate Bar 53 Grams $1.69 Old price $1.00, more expensive by $0.69
Bananas 1.257kg $3.37 total price This works out to be $2.68 per kilo Total price under the 2009 measurement of 1.277kg is $3.42 Old prices $5.08, a saving of $1.66
McCain Pizza Ham and Pineapple 500 grams $6.29 Old price $5.00, more expensive by $1.29
Dairy Farmers Milk 2 Litres $3.45 Old price 3.46, a saving of $0.01
The Sunday Mail Newspaper $1.80 Old price $1.10, more expensive by $0.70
Mount Franklin Water 1 litre $2.75 total price This works out to be $2.75 per litre Total price under the 2009 measurement of 1.5 litre is $4.12 Old price 2.67, more expensive by $1.45
Strawberries 250 grams $3.88 Old price $2.98, more expensive by $0.90
Meadow Lea Margarine 500 grams $3.49 Old price $3.29, more expensive by $0.20
Bega Tasty Cheese 750 grams $9.99 Old price $9.99, a saving of $0.00
Uncle Toby's LeSnak 4 Pack 132 grams $4.49 Old price $4.59, a saving of $1.00
Colgate Toothpaste 175 Grams $2.97 Old price $3.29, a saving of $0.32
M and M's 200 grams $3.00 total price This works out to $15 per kilo Total price under the 2009 measurement of 250grams is $3.75 Old price $3.79, a saving of $0.04
SPC Baked Beans Regular 425 grams $1.00 Old price $1.54, a saving of $0.54
Kraft Vegemite 220 grams $3.76 Old price $3.87, a saving of $0.11
Tip Top Sunblest Bread 650 grams $3.79 Old price $3.79, a saving of $0.00
Ajax Spray and Wipe 500ml $3.99 total price This works out to be $7.98 per litre Total price under the 2009 measurement of 750ml is $5.92 Old price $4.89, more expensive by $1.03
Cadbury Frozen Vanilla Ice Cream 2 Litre $6.79 Old price $6.29, more expensive by $0.50
Heinz Spag and Tomato Sauce 820 grams $2.59 Old price $2.49, more expensive by $0.10
Rexona Deodorant 150 grams $6.29 Old price $6.49, a saving of $0.20
White Wings Plain Flour 2kg $3.73 Old price $4.00, a saving of $0.27
CSR Sugar 2kg $3.49 Old price $2.82, more expensive by $0.67
Carton 24 VB Stubbies 375ml $45.00 Old price $44, more expensive by $1.00
The weight adjusted total of these products equals $195.62
This is up from $191.58 from 21st August 2009 or approximately 11 months ago.
A total of 2.11% jump in prices! Even with Coles apparently dropping prices on its most popular lines, our cost of goods had gone up!
As you can see, all these products are fairly stable products that are all likely to still be available 30 years from now.
However we have decided to expand our products purchased from Coles going forward. Just to increase the size of this inflation experiment. So we have gone from 34 products to 63 products. Plus we have included a more diverse range of products. Going forward, this should give us a better overall picture of what inflation is doing. Below are the additional products.
Kellogg's Rice Bubbles Cereal 490grams $5.09
Maggi Super Noodles 68 grams $1.00
Lipton Black Tea Bags 100 pack $3.61
Cottee's Raspberry Cordial 2 Litre $4.32
San Remo Thick Spag 500 grams $2.25
Glad Plastic Wrap 30 Metres x 33cm $2.89
Kraft Parmesan Cheese 250 grams $6.49
Trix Dishwashing Liquid 1 Litre $2.15
Purex Toilet Rolls 9 Pack $5.19
Daily Juice Apple 2 Litres $4.99
Schick Quattro Titanium Razor Blades Freestyle 6 Cartridges $19.99
International Roast Coffee Instant 250 Grams $7.95
Prepack Carrots 1kg $1.89
Chicken Breast Fillet 2 Pack Skin Off 0.378 Grams $5.29
Pork Loin Steak 0.240 Grams $5.04
Nobbys Saled Peanuts 375 Grams $2.95
Three Threes Australian Pickled Onions 520 Grams $2.42
Sirena Tuna In Oil Italian Style 95 Grams $2.24
Ardomona Chopped Tomatoes 400 Grams $1.63
Edgelll Corn Kernels 420 Grams $1.62
McCain Peas 500 Grams $2.18
Plus we thought why not add some additional products. Just so we can widen the experiment. Knowing that Fuel is a big cost to all families, we have included 1 litre of unleaded, diesel and GAS. This is just to track how much fuel is rising year to year as well.
Unleaded 1 litre $1.335
Diesel 1 litre $1.297
Gas 1 litre $0.585
Plus why not include some other services we use every year. These are water, gas and electricity.
And how about council rates, car rego and home/car insurance.
By doing this we can get a gauge on approximately how much our bills are rising a year. And while these are on my bills (e.g. insurance on my car or council rates in my area) it should be very similar Australia wide. Thus giving us a very good snapshot on what your family is going through.
As for the results of these additional products, well we will just have to wait until July next year to find out what happened.
But what we do know is our basket of the original 34 goods has gone up 2.11%.
So Why Is This Important In My Life?
Let’s take the example of Fred. Fred is a bus driver who took up his job on Jan 1st 2000. This was at a starting salary of $35,000. Fred is a model worker who has been an excellent driver. Each year his company rewards him with a 3% pay rise. In fact by 2008 he is earning $44,336. This is a 27% increase from his 2000 wage.
However inflation has gone up by 29% (Please note this is a real figure provided by the Australian Government). What this means is that if you purchased a bag of shopping in 2000 for $100 it would now cost you $129.00. As you can see, Fred is actually behind the 8 ball. He is earning less now than when he started. No not less money, but less purchasing power. Fred’s company values Fred less now than when he started, as far as what Fred could purchase with his money!
Even though Fred has been a model worker, his company has gotten away with only giving him pay rises that are LESS than inflation.
The moral of the story is that when your work gives you a pay rise how does this sit with inflation. Are they giving you any more PURCHASING POWER? Or are they only giving you the same purchasing power going forward? Or are they giving you even less!
Just like Fred you need to protect yourself against inflation. Each and every year prices rise and this is a fact of life. Are you getting a pay rise to ensure that your standard of living does not go down?
If on average your bills rise by 8%. However you are only getting a 3% pay rise this is a step down in your purchasing power/standard of living.
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HELP US KEEP THE BIG BANKS HONEST 
How To Avoid Lazy Money
One Year On, Have Supermarket Prices Gone Up?
