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Saving You Money through Simple Methods

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Does Saving Money Save You Money?

Clearance Deal of the DayCould not live without!  (never used)

 

When you read a blog about saving money, you already possess the most important aspect needed, proper mindset.  Financial awareness is a key component in saving money over the long term.  It’s very easy to think that saving a dollar here or there is no big deal.  For instance, I always use those credit cards which give me the highest return on every purchase.  I have an American Express Blue Cash Preferred card that gives 6% cashback at the grocery and I will use it every single time.  My wife on the other hand will go to the grocery store and just grab any card available.  Her rationale is that if she is only spending $20, that card would only save $1.20 so it’s no big deal.  However, every trip to the gas station, grocery store, or other retail establishment offers a chance to save.  The way I see it is that if I’m going to be making the purchase either way, why not put it on a credit card that will reward me for that purchase?  Why use cash when I can pay with a credit card and get an instant discount a discount that comes after I shop for the best prices and use cashback portals!

The biggest problem for many of us comes from trying to save significant amounts of money by purchasing things we otherwise do not need.  The “Extreme Couponing” craze is one such example of this as those people who follow these methods clip every coupon every week.  If I can buy a can of beets for 10 cents each why not do it?  Because nobody likes beets, they’re garbage, they taste gross and you just wasted your money! This is the opposite of not using your discount when the amounts are small.  You use the discount on items that are deeply discounted, but do they offer a value to you?  If you were some kind of masochist with a beet addiction 100 cans of beets is a fantastic deal and likely saved you about $100, but if you are a normal human being then you probably would have been better off burning the $10 you spent.

This phenomenon is not only present in the extreme couponing circuit.  In fact, every trip to Target provides an opportunity for those demons lurking on the endcaps to claw at your soul.  As you walk the perimeter of the store you see the red homing beacon that are the red clearance stickers.  They sing to you from the cream colored shelves like Sirens in the Tyrrhenian Sea.  Powerless over the possibility of saving tremendous amounts of money you are pulled into their orbit.  Assuming you are not currently reading this while at Target, let’s speak rationally about these fine deals.  Clearance items are only a deal if these are things you would normally buy anyway.  If you have been looking for a bedding set, and had decided on one that was $300 and you find one on clearance for $50 this is a superb deal.  By contrast if you are walking down the aisle and see 80% off a camo beer coozy that says , “My neck may be red, but I’m well read” don’t buy it.  Actually, you’re probably getting this ironically, you can go ahead and get that.  The point is that these items that are “only a dollar” really tend to add up over the course of the year.  In fact these can add up far faster than the “only a dollar” rewards my wife loses when she fails to use the right credit card.

It’s far too easy to base your savings off the MSRP rather than what you truly value an item to be worth.  A better exercise would be to look at these clearance items and ask, “Do I need it? Do I really want it? Would I buy it anyway?  What is it worth to me?”.  So if you walk past the endcap and sunscreen is on sale at 75% off go ahead and pick some up because you probably need it and if you don’t buy it now you will buy some day.  If you walk past the aisle and there is something you have always wanted, but price has kept you from buying it then I think this is a fair purchase.  The Suze Ormans of the world would disagree and advise you to only buy absolute necessities,  fund your emergency savings, fully fund all retirement accounts and then with anything leftover spend money on your wants.  My opinion on this is that sometimes you need to spend some money on the things you want.  So if there is a lamp or shirt you think looks great buy it.

The problem with these deep discounts is that we often go overboard on these clearance items.  In the haze of getting a great deal we often make purchases of things that we do not need or even really want.  As I am composing this my wife came in the door with 3 big bags from Target.  She purchased an $18 lifejacket for $5.38, not a bad deal since our kids will need a lifejacket next year and if she did not make the purchase on clearance we would have paid closer to 20.  However, she also purchased a rug which was on sale for $7.50, she wanted a rug, but I have a feeling that all things equal she never would have bought this style.

My wife happened to be the person who peaked my interest on this topic.  She said, “I used to never look for sales and just buy things I wanted.  I think that I spent less back then than I do now.”  Her hypothesis was that when you go into a store and do not look at prices (but have limited funds) you only purchase things you really want.  Both of us have been guilty of going to Target and buying multiple items, especially clothing, which were on sale.  When my beautiful wife last cleaned out her closet there were multiple items new with tags.  Just as bad there were countless items that she wore only once.  She is not the only one guilty of this either.  I have gone into the store at certain times of the year and bought 5 pair of shorts, but only ended up wearing 3 of the pairs and only a couple times.  Once it’s time to wear them again I’ve undoubtedly gained or lost weight making them useless.

Rather than buying multiples of things you like a little, buying one thing that you really love can be a better deal.  At the beginning of the summer I bought one pair of golf shorts for regular price, but only bought one pair.  I wore these shorts a couple times per week all summer long.  At the end of the year they were 50% off so naturally I bought 5 pairs!  Yet I have worn each pair only once.  One pair is still in my closet untagged.  Basically I spent $20 and wore the shorts 30 times (60 cents per wear), but spent $50 on the discounted shorts and worn those only 5 times ($10 per wear).  So even though my closet looks better with more choices, I’ve likely wasted money overall.  Of course the best option would have been to buy only 1 or 2 pair on clearance and then wear them and I’m saving money.  The problem with clearance deals is they usually don’t work like that.  You end up overspending on things that you don’t need because you feel like you’re saving money.  Unless we think about this consciously we are all subject to doing it.  Which brings me to the question, does anyone want to buy a case of corn on the cob holders?  Accidentally bought too many.  Asking for a friend.

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Lower Grocery Budget without Extreme Couponing

 

junk-foodphoto

Food expenditures are probably the easiest places to make budget cuts for younger Americans, but the grocery budget is also the easiest to justify keeping.  After all, statistics show that most Americans eat food on a regular basis (citation needed).  In fact, many scientists would probably agree that food is nearly a necessity for human survival.  With all of these facts buried in your brain, spending money on food is viewed as a necessity and unconsciously we reason that “our bodies need the nourishment and our bodies are worth the expense”.  There is nothing wrong with this assertion on the surface we do need to feed our bodies quality foods in order to keep them working in optimal condition.  Unfortunately, drawing a line between expense, nutrition and necessity is based on flawed logic.

Let me be clear, I am not advocating only consuming a dense diet void of any taste, but I would reason that spending more on your groceries does not make you healthier or love yourself any more than the rest of us.  I have drilled down into my spending data for the past few years and have noticed some amazing trends.  The statistics show (in my household), that those times when our food bill is lower correlate with better eating habits.  So, I can back into the reasoning that spending less on food makes my family healthier (not even considering less stress that accompanies bettering your financial situation).

I know that there are those among you that will argue, “it’s cheaper to eat unhealthy foods than it is to eat healthy.”  In many ways this assertion is correct, but there are moves we can make that swing the scale in our favor.  We must learn to value our food differently.  Rather than looking at food’s value on a calorie per dollar basis, we need to evaluate foods on a nutrients per dollar basis.  It’s much easier to get full on high quality foods.  Try this experiment, eat as much chicken and broccoli as possible, then eat a similar meal from McDonald’s.  You will consume more nutrition, get full on far fewer calories and spend less.

Eat at Home

Without question eating at home saves money.  If you are spending more by eating at home, you’re doing it wrong.

 

Go to the Grocery for Big Trips After Dinner

The times when we eat most unhealthy and spend the most money happen to coincide with those times when we have less food available at home.  Too often my wife and I will look in the refrigerator or pantry and say, “You want to go get some dinner?”.  This plays out poorly and expensively in two ways.  First, if we go out to dinner we will spend between $10 and $30 for that meal.  Option 2 is that we go to the grocery with our hungry eyes.  We purchase those items that would not be part of a normal shopping list.  From a psychological perspective it’s much easier to handle these smaller expenditures.  You don’t feel like you’re spending much money if you just spend $25 on most of your grocery trips.  It’s easy to splurge when your total is relatively low, plus you’re hungry and you’re worth it.

Going to the grocery for one big trip each week is easier to handle because you are less likely to make off the wall purchases.  Going to the grocery on a full stomach keeps your brain in control of food purchases.

Make a List

Knowing the items that your family consumes is important for shopping successfully.  Some items that we always try to keep in our house are Bread, Chicken Breasts, Ground Turkey, Ground Beef, Frozen Vegetables, Cottage Cheese, Peanut Butter and the list goes on.  The point is that we have taken a mental inventory of those items we eat on a regular basis and we buy them when they are on sale.  These tips also can be applied to other non-food items as well.  We are not super rigid with our lists, but we know that keeping these key items on hand around our house give us many of the ingredients needed for dishes we eat regularly.

Shop the Sales or go to a Salvage Grocery Store

This likely goes without saying, but making purchases when items are on sale is pivotal to saving money.  Knowing the list of ingredients your family enjoys is key, but so is purchasing these items when they are at their lowest prices.  At our local grocery store the regular price on a loaf of “Nature’s Own” bread is about $3 per loaf, but at the local Salvage Grocery Store they sell the same exact bread for $1 per loaf.  It’s the same delivery guy and everything.  Very often, going to a salvage grocery store is a better deal than even regular couponing and sale shopping.  Most recently, I found a 10 pound  “Black Forest Ham” that is normally found behind the deli counter.  At the local deli they charge more than $5 per pound on this item, but I bought this for $2 a pound.  Always keep stocked up, it might cost more up front, but you spend much less over time.

Buy a Freezer

Frigidaire Freezer

Around the holiday season 2012 my wife and I really started to embrace the stocking up on sales mentality.  We found turkeys were deeply discounted for Thanksgiving.  We ended up buying 6 of them in total and each one was a great deal.  I think the two cheapest were less than 20 cents per pound.  We also found glazed hams for at GFS for $1.30 per pound and ground turkey for $1.45 per pound.  We bought 100 pounds of the ground turkey and 5 hams.  We spent a ton of money, but we used my parent’s spare freezer to store these items, but it was running out of room.  It was then that my wife and I decided that we needed our own freezer.  We ended up purchasing a stainless steel upright freezer that was on sale at Lowe’s.  We ended up spending about $600 for the freezer, but by having the freezer we were able to capitalize on sale prices.  One of our first purchases after buying the freezer was buying boneless skinless chicken breasts by the case at Sam’s Club.  Normal price for chicken breasts seem to hover around $4 per pound or more.  We ended up buying 100 pounds for $1.77 per pound.  Our freezer has already saved us more than it cost in the ability to always eat sale priced food.

Credit Card Cashback

Of course anyone who has read the blog knows that I advocate getting money back by using credit cards for purchases you are making anyway.  So while you’re buying food on sale you might as well get a bonus discount after all your sale prices, coupons and smart shopping are considered.  With the exception of Sam’s Club, I can get cashback for grocery purchases.  One card give 5% at grocery stores, another gives 6% cashback at grocery stores which can really save quite a bit of money over the course of a year.  If I spend $6,000 a year at grocery stores then I will get $360 cashback on my American Express card which is pretty great for expenses I would incur under any scenario.

Start a Garden

Vegetables can be quite expensive when purchased at the grocery store.  My dear wifey bought bell peppers last week at Kroger for 50 cents each because she needed them for a recipe she had been eying.  We have grown accustomed to having a garden, but with the move and home renovation we did not get one planted soon enough.  Today we went to the local farmer’s market and actually purchased pepper plants for 50 cents each.  Even if each plant only produces one pepper we will be ahead.  We planted a late summer garden today and all of the seeds were a bit over $10.  Hopefully this small investment and minimal sweat equity will end up paying for itself many times over as we enjoy our fresh organic vegetables this fall for minimal cost.

 

 

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