Financial Planning for Businesses

The Truth About Clipping Coupons

Ketchup1xSo, you want to save more money? Willing to take a look at your grocery spending habits? Then, keep reading…

Coupon clipping is very popular among many folks as a way to save money on their groceries. Local papers have an entire section devoted to coupons and when I was a kid, at my home, it used to be a regular Sunday “event”. Another trick my family used was to join outlets like Sams Club or B.J.’s Wholesale Foods. If you’re not familiar with either of those two (Sam’s Club is owned by Walmart), it’s basically a warehouse that you pay a yearly membership to join and they offer discounted prices to members.

But, are coupons worth the trouble? When I got older, I followed in the footsteps of my parents. I joined Sams Club. I found that sometimes I would clip coupons for items that I rarely or never used, but were “on sale” due to the coupon.

I’ll admit, there are times when coupons can save you a substantial amount of money on one or two products that you really need, and double coupons seem like a great deal. But is saving $1 on Catsup vs. paying full price for Ketchup life-changing?

Are “special memberships” worth the cost of membership dues?  Most people believe that they are saving a lot of money by buying in bulk from those wholesale clubs. But, that isn’t always the case. As I got older, I found that out the hard way.

Unit price is always more important than either of those two methods of saving money. By paying attention to the unit price of an item, you can really learn to cut costs. Of course, an important consideration in saving money is also making a budget, a grocery list if you will.

When making a good grocery list, don’t just list items you like, list everything that you have in your home right now. Then list all of the items you eat on a regular basis. Pay attention to the number of times you eat out every month. It may take you a month of writing all of this down. I suggest you keep a running log every single day for one month if you really don’t pay attention to what you spend your money on. Don’t forget spices, and other non-food grocery items, like freezer bags, garbage bags, cleaners, soaps and so on.

Yes, it’s a major pain in the ass to do this.

After you have your list, it’s time to make a budget. By reverse engineering your budget this way, you’ll find it is a lot easier to cut out waste or spending that you don’t really get any value from. For example, do you really want to eat out 4 times a week or do you do it because you run out of good food to eat in the house?

You can also set spending limits on groceries without using arbitrary numbers or guessing at how much you should spend on your groceries since you already have (or should be keeping tabs on) how much each item costs.

Everyone seems to have essential products that they need or want to have every week. And, I’m not suggesting that you sacrifice your wants-you shouldn’t. However, people often shop without a budget, or shop several times a week without really having a firm idea of what they really want. They just start throwing stuff in the cart that “looks good.”

This way of shopping tends to not only cost more money (buying things you had not planned on buying) in terms of grocery bills, but costs more money in gasoline going to and from the store (when you shop multiple times a week). With gasoline prices rising, does it make sense to waste it traveling multiple times to the grocery store for items you forgot? If you had a plan prior to going to the store, wouldn’t you save money, if only in gasoline?

Only after you have a budget in place does it make sense to try to lower costs by looking at coupons and club memberships.

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December 24th, 2011 | by David | No Comments


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