Sunday, November 25, 2012

Frugal Living 2: Extreme Couponing

At the grocery store tonight I got stuck behind a Couponer. I was reminded of what it is I dislike about the whole "Extreme Couponing" phenomenon. It perpetuates the illusion(delusion?) that how much you are saving is more important than how much you are spending.

I've seen on these shows that people are equivocating how much they "saved" with actual money. For instance, one woman had a hospital bill come in and it was 300 more than expected. So, she concluded that she had to "save" 300 so they could pay the bill. She then went to the store and spent $400 on a subtotal of $750 worth of purchases, saying she saved $350, and thus, met her goal.  However, the purchases she made would take well more than a year to consume, and all various name brand items.

Once home, she then put these items up in her miniature warehouse, behind the like kind items she already had there (what she had at home looked to be at least three times the amount she had just purchased).  The worst part of this is that she thought she had done well and good for her family.

And that's the problem.

If you have an expense for some amount, the solution is not to pay more than the amount on random crap you already own so that you "save" more than the amount of the expense. You just pay the expense. Unless you are immediately reselling the items purchased for full price, you didn't actually make any money.

So, lets run through this the way a sane person would. The hospital bill comes in and it's a bit more than you expected. If you have a High Deductible Health Plan with an Health Savings Account as I often suggest (I really should do a Frugal Living: Healthcare post), it's pretty much a non-issue; but let's say, for now, that you don't have an HSA. You know you are good with coupons, you know how to work the deals with the double coupons and the combinations, you know you could easily save the amount of the expense.  So you work out your plan (extreme couponing does not work on the fly);  but then you realize that all the items you would be buying are things you already have, and not just that, but items you have enough of to last you for over a year. This is not the time to go buy another year's worth of stuff.  This is where you take the $400 you would need to spend to get the $750 worth of items, use $300 of it to pay the expense, and then you still have $100 in your hand, in addition to all the stuff you have stored away for use.

Couponing (extreme and otherwise) has its place, especially in stocking and restocking your supplies and preparations. However, it should not take the place of fiscal responsibility. Just because you are spending less than the total sticker price of the items you are purchasing, doesn't mean you are getting a deal, or even saving money in the long run.  If the items you purchased expire before you have a chance to use them, it could even mean losing money.  If you are saving 30% on a name brand item, but still spending more than a store brand that works just as well, if not better, you are wasting money (and there are store brand items that fit this description, or, should I say, name brand items that are just complete crap).

Coupon as you see fit, but don't let it be the end-all-be-all of your fiscal plan when it comes to making purchases. Don't be like the lady in front of me at the one open checkout line, holding up everyone else. Don't nit-pick trying to save two cents on your 27 hair products when you have seven kids you are feeding. (James asked why she was buying so much stuff, and we said it was because she had a bigger family than we did, that she had three kids, instead of just one — she corrected us and said she had four more at home.) If you're having money issues, 10 cans of hair spray should not be on your grocery list.

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