Real world: Scrimp, Splurge, or Strategize
About this video
In this short play, three friends with different money styles, thrifty Theodore, spendy Sarika and balanced Betty, go grocery shopping. They show techniques like comparing unit prices, weighing price against quality and convenience, comparing price per pound, avoiding food waste, buying in season and buying spices at international markets. The story asks viewers which style they want to be.
You'll be able to
- use unit price to compare packages of different sizes.
- explain the trade-offs between price, quality and convenience.
- list several strategies for saving money on groceries.
Key words
- Unit price
- The price for one unit of something, like per roll or per pound, used to compare packages.
- Buying in bulk
- Buying a larger amount at once, often for a lower price per unit.
- Convenience food
- Prepared food that saves time but usually costs more.
- Markup
- The extra a store charges above what something costs to make or buy.
- In season
- Produce that is naturally being harvested at that time of year, often cheaper and fresher.
Transcript
- [Narrator] Khan Academy Financial Literacy Theater presents "Scrimp, Splurge, or Strategize." Every Wednesday, three friends go grocery shopping together. (door chiming) There's Theodore Thrift.
- Gosh, I love the grocery store. So many opportunities to stretch my dollar.
- [Narrator] Sarika Spendy. - [Sarika] It's time for lobster.
- [Narrator] And their middle-minded friend, little Betty Balance.
- And there should be room in the budget for cookies.
- [Narrator] Some things are outside your control. You can choose which store to shop at, but at the individual level, you don't have control over the prices your grocery sets. Nevertheless, there are techniques you can use as a retail shopper to make the most of your income while still having a good life.
- [Theodore] Sometimes, that might mean paying more to spend less
- [Betty] Say, what do you mean Theodore Thrift?
- [Theodore] Well, look, say I wanted to buy paper towels. Here they are. Sarika, how much is a six pack?
- Eight bucks. - [Theodore] Okay. And Betty, how much is that big one?
- This one has 18 rolls and it's $20. - So, which one of these products is the better deal?
- The six pack is $12 cheaper. - Sure, but the unit price is lower on the 18-pack.
- The what price? I only see $8. - Watch.
- Oh boy. Here we go with the calculator.
- [Theodore] In this case, paying more for a larger package allows you to spend less per roll. For the $8 six-pack, each roll of paper towel costs $1.33. But at $20 for 18 rolls, each unit costs a $1.11, 22 cents cheaper. And that that adds up. If you bought three six-packs, you'd be spending $24 on 18 rolls of paper towel, $4 more than if you just bought the 18-pack in the first place.
- Sure, I guess it's cheaper, but I'm not gonna walk around with my phone calculating every price. No way, no how.
- You don't even need a calculator. Usually, a lot of grocery stores will have the unit price right there on the shelf.
- [Betty] So for things you use or eat a lot, buy in bulk, but you can't eat paper towels.
- Not with that attitude. - [Betty] So when it comes to food, how do you think about shopping?
- Purely on the basis of calories per dollar. If I had my way, I'd eat nothing but rice and peanut butter.
- Calories per dollar. Is that on the price label too?
- No, it is not on the label. It's a Theodore thing. Most calories for least amount of dollars. Do I crave fiber? Yes. Am I developing scurvy? Possibly. But am I saving money? Definitely, yes.
- There's a sliding scale between price and quality, and it's kind of up to each person to find their particular happy medium.
- I'd also argue there's another equally important sliding scale. What do you value more? Price or convenience? Come with me to my favorite section of the store. Welcome to the deli. Everything the light touches is our kingdom, Simba. They got the potato salad, they got the big blocks of cheese.
They got the rotisserie chickens. - I don't like it here. I could hear the siren song of the temptations behind that counter. I don't trust them. They will bamboozle another dime outta me. You hear that Sharon? Not another dime.
- It's gonna be okay, Theo. - I'm a busy woman and sometimes I don't feel like cooking. Most times I don't feel like cooking.
- I feel that. - So if I were made of money, I'd probably just get everything from here. Live off hummus and pimento cheese and the potato bar from the hot foods section.
- The markup of the potato bar causes me physical pain to think about. Do you know how inexpensive a raw potato is? Curse you, Temptation Island.
- But I'm not made of money. And if I only ate prepared or convenience foods, I'd mummify myself with salt and preservatives. (tsks) Ah, it's no way to live. And Theodore, I got to hand it to you. Cooking your own food does save you money, but it doesn't save you time.
You can save money cooking your own food and it's better for you. But it takes time to prepare.
- Sometimes, I want to roast a chicken. And sometimes, it's 6:15 on a Tuesday and I need to eat something in the next 45 minutes, or I'll become homicidal. So, I get a rotisserie chicken from the store, but most of the time, I try to plan and budget my grocery shopping.
- Those are lost leaders anyway. They're priced low to entice you to buy other things along with them.
- Sometimes, a rotisserie chicken is cheaper than a whole raw chicken. Explain that one, why dontcha?
- My pleasure. Rotisserie chickens are nearly always way smaller. Raw chickens are clocking in around four to six pounds. Cooked rotisserie birds are usually three pounds raw and around two pounds cooked, so the yield of usable meat is smaller, and-
- If you take out that calculator again, I swear.
- Rotisserie chicken is $3 a pound and a whole chicken is a $1.50 a pound. Come on. That's literally half the cost.
- Thank you, Federal Reserve Bank of St. Louis.
- You can make soup from the leftover chicken bones.
- That's gross. - Where do you think soup comes from? Saving bones and vegetable scraps in the freezer helps you make the most of your purchases. Not wasting food is the other half of that.
- I also try to buy what's in season around me. Asparagus in the spring, strawberries in the early summer, tomatoes in the late summer, but it's frozen strawberries and canned tomatoes in the winter time for me.
- [Sarika] If you want to buy spices, buy them from people who use a lot of them. I'll never buy cardamom in a big retail grocery store. It's so expensive and they give you so little. For the same price as a little jar, I can get a sack of it at an Indian grocery store and it's usually fresher.
- International markets for bulk spices. Got it. But now to the real question. what are y'all doing for dinner tonight?
- I've got no plans. - I was gonna grab one of these ready-to-eat dinners and watch TV, but I'm down for whatever.
- Do y'all wanna maybe come to my place? We can make chili.
- Yes. Love this plan, love chili. I'll pick up some cornbread. Ooh, and some sour cream.
- Ooh, I'll cook some beans. You know, they're way better, not to mention cheaper if you cook them from dried, and-
- [Betty And Sarika] We know, Theodore. - [Narrator] And so, the trio made their way through the store, picking up ingredients for chili and navigating the aisles in the same way as they navigated through life. With an eye towards thrift, with an eye towards convenience and pleasure, and with an eye towards balance.
We each have aspects of Sarika, Theodore, and Betty within us. The question is, who do you most want to be?
- A spender? - A saver? - Or a balancer? - [Narrator] This has been Khan Academy Financial Literacy Theater, wishing you bon appetit.
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