Rising prices and the household bill, a two-month comparison that shows where a real saving is

Why two months beat an impression

Lesson 5.1: What inflation is and how it eats your savings without you noticing covers what rising prices do to money over the long run. This article is about next month's shopping: what you buy, at what price, and where the bill can shrink without the home going short. An impression cannot answer that. Memory keeps the prices that shocked you and forgets the quantities that crept up without anyone noticing.

Pick two comparable months

Compare two months with no season in either: no Ramadan, no school start, no guests staying for a week. Ideally the same number of people lived at home in both. You will need a record of your purchases or the receipts. If you have neither, start recording this month and compare in two months' time.

Step one: a table of the items you bought in both months

Take the items that appear in both months and start with the largest by amount. Ten to fifteen items usually cover most of a household's shopping. For each, write the quantity and the unit price in each month: the price per kilo or per litre, not per pack. A pack that kept its price but got smaller has gone up, and only the unit price shows it.

Step two: separate the price effect from the quantity effect

Each item gets two short sums:

• Price effect = first-month quantity × (new price − old price).
• Quantity effect = (new quantity − old quantity) × new price.

Together they equal the difference between the two months exactly. A hypothetical household in Cairo, with prices and quantities chosen only to illustrate:

What the example says

The bill rose by EGP 455, and the first instinct is to blame prices. The table says only 100 of the 455 came from higher prices. The other 355 came from buying more: an extra litre of oil, another half kilo of cheese and twice the snacks. These figures are hypothetical, and yours may show the opposite. The point of the table is to know which kind of increase you are facing before you decide what to cut.

Where the real saving is

If the quantity effect is larger, the saving is in your hands. For each item whose quantity rose, ask: was it eaten, or is it still in the cupboard? Did the extra come from a "buy two" offer? Are more people eating at home? Food that was bought and not used is the plainest waste there is, and a shopping list with quantities, written before you leave, is what fixes it.

If the price effect is larger, the saving takes research rather than going without:

• Compare the price per kilo across pack sizes of the same item; the bigger pack is not always cheaper.
• Try another brand where taste barely differs, such as rice, sugar and cleaning products.
• Price your five biggest items in two or three shops once, then buy each where it is cheapest.
• Buy fruit and vegetables in season, when they cost less.

Watch for false savings: a large quantity bought because the price was tempting, half of which spoils, or a cheaper item you get through faster so the bill ends up where it was. The next comparison will show it if it happens.

Repeat it every three months

One comparison gives you a picture; a repeated one gives you a direction. Rebuild the same table every three months with the same items, and add a column for what you decided last time. Did the quantity you meant to cut come down? Did you find the substitute? That turns the table into a decision tool rather than a list of complaints about prices.

Where Masareefy helps

The Insights tab in Masareefy shows your spending by category and compares it with the same days of the previous period, so you know where to start. If household shopping is the category that rose, that is the one worth an item table. When you need the items themselves, export your ledger to Excel: it includes a sheet of every item you logged with its quantity and unit price. Insights is part of Premium; export always stays available.