Some of you know that I offer household budgeting and analysis services to help people get on track and keep on track. While grocery shopping is just one of the areas that makes up your overall household budget, it is a significant one and you MUST understand some basic financial principals before you begin your journey in earnest, or your results will be nowhere near what you expect.
Once you begin to take meal and shopping planning seriously, you will see more money in your bank account at the end of the paycheck; you will find it easier to pay bills; you won't feel as stressed when you make a splurge purchase. It is very, very easy to suddenly realize that you have more money than you anticipated and go spend it immediately on something you "deserve". Instead, you need to make the most of this newfound "extra" money. I like to recommend that you set a firm budget for yourself, say $200 per paycheck for groceries. Then you meal plan and coupon and save as much as you can to come under that budget. When (not if) you do, take that cash and put it in a seperate fund - another bank account, an envelope, a prepaid debit card, whatever will keep you from confusing it with your general petty cash. This is now your stockpile cash. You can use this right away to begin stockpiling or you can save it up until you have enough to buy extra shelving, a deep freeze, a couponing printer, whatever you need. If you manage your money this way, you will be able to take care of what you need AND get the things you want without going in to debt for it.
On that note: never, ever, ever let someone tell you that you should use credit cards to finance your couponing habits - any habits, really. If you can't afford to invest $200 in a laser printer up front, that means that you most likely won't be able to pay that same $200 off your credit card before interest accrues. Saving ahead of time is a much better way, for both your wallet and your peace of mind. Consider this: most people have less than ideal credit scores, which makes the traditional credit card rates high. Store cards like Walmart, Bellks, Goody's, etc. may offer promotions, but tend to have APR's of 20-24.99%. As an example, Walmart has a credit card promotion, spend $200 or more, get 6 months interest free. If you pay off the balance before 6 months is up, you pay just shelf price. If you don't pay in 6 months, you owe all of the interest that was deferred in the promotional period, plus whatever it earns from now on. If you put a $200 printer on a credit card with a rate of 22% APR, and you make minimum $15 payments each month, it'll take you 15 months to pay that off, well beyond the promo period, AND you'll pay $24.80 in interest. If you want to pay off within 6 months, you'll have to pay just a little bit more per month, $33. That's all assuming you have just that on your card. What happens when you have multiple purchases on it? When you make a payment, that payment is spread across all of your purchases. Confused? Take a look at these examples.
Once you begin to take meal and shopping planning seriously, you will see more money in your bank account at the end of the paycheck; you will find it easier to pay bills; you won't feel as stressed when you make a splurge purchase. It is very, very easy to suddenly realize that you have more money than you anticipated and go spend it immediately on something you "deserve". Instead, you need to make the most of this newfound "extra" money. I like to recommend that you set a firm budget for yourself, say $200 per paycheck for groceries. Then you meal plan and coupon and save as much as you can to come under that budget. When (not if) you do, take that cash and put it in a seperate fund - another bank account, an envelope, a prepaid debit card, whatever will keep you from confusing it with your general petty cash. This is now your stockpile cash. You can use this right away to begin stockpiling or you can save it up until you have enough to buy extra shelving, a deep freeze, a couponing printer, whatever you need. If you manage your money this way, you will be able to take care of what you need AND get the things you want without going in to debt for it.
On that note: never, ever, ever let someone tell you that you should use credit cards to finance your couponing habits - any habits, really. If you can't afford to invest $200 in a laser printer up front, that means that you most likely won't be able to pay that same $200 off your credit card before interest accrues. Saving ahead of time is a much better way, for both your wallet and your peace of mind. Consider this: most people have less than ideal credit scores, which makes the traditional credit card rates high. Store cards like Walmart, Bellks, Goody's, etc. may offer promotions, but tend to have APR's of 20-24.99%. As an example, Walmart has a credit card promotion, spend $200 or more, get 6 months interest free. If you pay off the balance before 6 months is up, you pay just shelf price. If you don't pay in 6 months, you owe all of the interest that was deferred in the promotional period, plus whatever it earns from now on. If you put a $200 printer on a credit card with a rate of 22% APR, and you make minimum $15 payments each month, it'll take you 15 months to pay that off, well beyond the promo period, AND you'll pay $24.80 in interest. If you want to pay off within 6 months, you'll have to pay just a little bit more per month, $33. That's all assuming you have just that on your card. What happens when you have multiple purchases on it? When you make a payment, that payment is spread across all of your purchases. Confused? Take a look at these examples.
Example 1: Credit Card Starting Balance $0 Printer Purchase: $200 New Credit Card Balance: $200 Minimum payment due: $15 If you make only the minimum payment, you will have only paid $90 on the printer in 6 months. All interest deferred is now due. In order to pay off just the printer is 6 months, you'll need to pay at least $33.33 each month. | Example 2: Credit Card Starting Balance: $200 Printer Purchase, 6 month deferred interest promo: $200 New Credit Card Balance: $400 Monthly Payments: $34 for 6 months = $204, enough to pay off printer within 6 months 6 months of payments split between balances: Prior Balance: $200 - $89 payments = $111 balance Prior Balance Interest Charges: $22 Printer: $200 -$89 payments = $111 balance Because you did not pay off the printer completely within 6 months, all deferred interest during the promo period is now due, plus any that accrues until it is paid off completely. |
This is a lot of thinking and a lot of work to pay for a $200 couponing printer (gotta have those nice clear barcodes, right?) But if you instead set your budget, then stash whatever you don't spend, you can watch your money go in and grow, instead of go out. You'll have time to research the best deal, maybe find one on sale, and get nothing but a feeling of accomplishment and reward. This works for anything, not just couponing. Make sense? Cool.
Now that you have a tidy bit of cash set aside, let's start stockpiling
First, think about what you use most: toilet paper, laundry soap, toothpaste, paper towels, all that stuff. Then, check out your sale paper. When I am scanning any sale paper for stockpile items, I don't care if it is "just" on sale. I am looking for the words "BoGo" (ideally free, especially at Publix), Register Rewards, Bonus Points, pretty much anything that indicates I'm getting something on sale plus cash or cash equivalent back. For my example today, I'll use Walgreens. If you want to learn to shop the BoGo sales at Publix, watch the free video for my workshop or the BoGo video at the online class page
This is the sale paper that was actually published today. In the red wobbly circle, you'll notice that with purchase, you'll get $2 in Register Rewards for each promo item purchased. I prefer that over the Crest offer next to it, where you'll get $4 in Register Rewards for purchasing 3 items. I have to purchase more to get less and I'd rather not do that just yet. I also prefer the Colgate deal to the blue circle, for two reasons. First, I don't want to be forced in to buying two items if I don't want to. Second, I prefer Register Rewards to points. Register Rewards at Walgreens spit out when your receipt prints. You can use them instantly on your next purchase and you instantly know if there is a problem. Balance Reward points have to be checked at the bottom of your receipt and calculated to make sure that it has credited. Additionally, it is not wise to earn and spend points. They have more value when you let them aggregate, which means you'll need to to earn them over many trips, then come back and redeem them. This is because, once you earn 18,000 points, they are no longer 10 points = 10 cents. 18,000 points = $20, not $18. 30,000 points = $35, and 40,000 points = $50. SO with points, the more you let them build, the more they are worth. Once you hit 40,000 points, you are rewarded with $10 free extra dollars. We'll look at both types of deal so you can see for yourself why I prefer one over the other.
Once you find the deal you want to stock up on, you want to match coupons to it. If I don't have either a store or manufacturer's coupon, I will pass. These deals roll around every 6-8 weeks (some even more often) and I'm not going to spend money I don't have to because I've jumped the gun this time. Then, just like I told you yesterday, check your rebate apps. On my best deals, I have stacked a sale with a manf. coupon, with a store coupon, with an Ibotta or other rebate, with a Register Rewards spitting out at the end. That is my gold standard when I stock up. I want to use as many of thse categories as I can.
Note: The Walgreens sale, the coupons, and rebates listed, while real at some point and in some areas, but may not be current or available in your area. I am including them for illustrative purposes only.
Once you find the deal you want to stock up on, you want to match coupons to it. If I don't have either a store or manufacturer's coupon, I will pass. These deals roll around every 6-8 weeks (some even more often) and I'm not going to spend money I don't have to because I've jumped the gun this time. Then, just like I told you yesterday, check your rebate apps. On my best deals, I have stacked a sale with a manf. coupon, with a store coupon, with an Ibotta or other rebate, with a Register Rewards spitting out at the end. That is my gold standard when I stock up. I want to use as many of thse categories as I can.
Note: The Walgreens sale, the coupons, and rebates listed, while real at some point and in some areas, but may not be current or available in your area. I am including them for illustrative purposes only.
Let's see this in action.
As you can see, the Register Rewards transaction is a much better value than the Balance Rewards. It is easier to calculate your end price and easier to see your results. BoGo 1/2 off and 10,000 points seem like a bargain at first, but hide initial pricing, as well as your final savings. When in store, always compare an item's price to that of Walmart, who generally is the lowest. If the Walgreens (or CVS or Kmart) price is higher than Walmart + the value of your coupon + the value of whatever rewards or points you will be earning, then it is not a good stock up price. Leave a comment with any questions, suggestions, or clarifications. Missed how to plan a menu or pull it all together? Click the link below to catch back up.