Do I need to tell you coupons are hot? Groupon is often in the news. You hear about how many billions it’s worth, its anticipated IPO and its controversial accounting metric ACSOI (now dropped).
Of the top 10 personal finance blogs compiled by Wisebread, at least 6 are in the coupon and bargain shopping category, above long time leaders The Simple Dollar, Get Rich Slowly, and I Will Teach You To Be Rich. According to the estimated traffic charts posted by Wisebread, Money Saving Mom blog had twice as many visitors in August 2011 as Get Rich Slowly. The gap is also increasing. The estimated number of monthly unique visitors to Money Saving Mom grew by 1/3 over the last 12 months. It shrank by 1/3 at Get Rich Slowly. Coupon-sharing moms are beating out content-producing guys.
Forget about getting out of debt, better budgeting, saving more in 401k, or earning a side income. Those are old news. Coupons! Coupons are the secrets to success. People want to know what coupons to use where this week, and they will come back again and again every week.
Are coupons worth the attention they get? In this post I’m putting forward a proposition: don’t save money on groceries with coupons.
What? Why? Who’s not for saving money? Who doesn’t buy groceries? Why not save some money with coupons?
By accident, I learned a new term at work a few weeks ago. It’s called CPG, which stands for Consumer Packaged Goods, also known as Fast Moving Consumer Goods (FMCG). They are the subject of those coupons: $2 off 24-pack Pepsi, $1 off Progresso soup, $0.75 off Pillsbury ready-to-bake cookies. You get the idea.
I almost never see coupons for fresh produce: fruits, vegetables, meat, fish, or eggs. Have you? I only see coupons for those CPGs.
There’s our problem. You save money with coupons only when you buy CPGs. Are they good for you? You would be better off not saving money if you buy fresh produce.
I heard of the saying “you are what you eat.” I believe it. I’d be very careful about what I put into my system and not worry about saving money on groceries by buying CPGs with coupons. That makes me not as smart as those who follow coupon blogs. I’m OK with it.
Fresh produce isn’t expensive anyway. I spend about $100 a week on groceries. Most of the stuff in my shopping cart don’t have a barcode. No barcode means no coupon. I recently switched from a chain grocery store to a local grocery store. This local store is much smaller and a bit more expensive but it has better fresh produce. I tried Community-Supported Agriculture (CSA) but the fixed pickup schedule didn’t quite work out for me.
I don’t save money on groceries with coupons. I suggest you don’t either.
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Agreed. I’ve often found the coupons bring the price of a name brand down to the price of an off brand. Some deal! The people who really drive their costs down tend to use multiple coupons on one item, which is forbidden by the rules of the coupon. The stores don’t mind because they only need to show the distributor they sold more items than they accepted coupons. Still, it’s kind of fraud.
A lot of shoppers fail to account for the cost of driving from store to store. The IRS gives business a deduction of around 55 cents/mile for driving costs, so you know the actual cost is higher. That means a dash to the grocery store, two miles away, costs more than $2 round trip. Driving a three-store circuit will add about $10 to your shopping costs every week. (That’s why stores like Sam’s and Costco are often a chimera – too much extra driving.)
Finally, couponing contains an enormous opportunity cost – you have to find the coupons, clip them and organize them. You’d keep your grocery bill low and eat better by buying produce and repurposing the couponing time into cooking and menu planning. In our house, for example, we plan menus one week in advance, then shop to fulfill that list. That reduces impulse buys and keeps from overstocking on an item, then having to throw it out.
Tangible effective outcome! It is evolutionary to get swayed by it. Driving all over town to save money over gas is another – something you have talked about already. But what makes humans special is being able to plan, see future, work towards it, delay gratification. I guess now we need to teach this.
That is a really interesting analysis about the plight of the content personal finance bloggers vs. the more popular coupon queens. It’s too bad really because if people really want to become financially independent, they’re never going to do it with couponing alone.
If you’re at a point where your financial world can be significantly changed by saving $1.00 off a yogurt or case of Gatorade, than your financial life missed the boats a long time ago.
I suppose most people look at couponing more of a “game” than anything else. Then you have those “psycho” coupon idiots on TV that exhibit more disease like characteristics than anything else.
I think this article might be a little misleading. I believe the reason you don’t see coupons for those “fresh” items you mention is because most stores only carry one brand of each of those. There is no competition within the store for those items. When you buy tomatoes, there is usually only one brand of tomato. If you buy a head of lettuce, you don’t have 5 farms to choose your lettuce from. Finally, I am not sure but there might be so little margin there that the distributors don’t want to spend the money on the marketing side of things.
Not using coupons (in moderation – i am not talking about these people who hoard merchandise at home) is like throwing away money. Everyone has to buy toothpaste right? It is silly to NOT use a coupon for those types of items. Do you buy yogurt? Healthy cereals like Muesli? There are always coupons for those type items. And, you can’t tell me that you never buy some chips or a few cookies every once in a while?
I am also not sure if the author has kids but there are plenty of items you have to get for them and coupons can help a ton there. I can’t tell you how much we have saved as a family over the years by using coupons for things we are buying anyhow. Note: we don’t buy the item just because we have a coupon for it. In fact, we do the opposite. We buy only when we need the item (we don’t hoard) and we don’t care what brand we get if we know it is good. For example, if we need toothpaste we will get Crest one time if there is a coupon, and then we will get Colgate the next time if there is a coupon for that.
THEN, if your store does double of triple coupons? You are REALLY wasting money if you don’t use them then! You can get some items for free at that time!
So, yes, use coupons wisely and in moderation for the items you need and don’t be picky on the brand if there is no discernable difference – even if it means going with the store brand where a coupon is not available but the price is still less! Year to date, my family has saved over $1800 by using couponsin this matter. Clipping/organizing time is approx 2 hours a week. WELL worth it! And yes, we are debt free too!
@Perry: I agree the article oversimplifies a bit. You can save some money clipping coupons. I do it myself. My grocery store offers generic 50-cent coupons for, say, deli items or $5 off a purchase over $50. Those are worth it.
But over the past 20 years, I’ve found that few other coupons are.
You mention toothpaste, but toothpaste is a great counter-example. I never use coupons to buy toothpaste, though I once did. I found that Crest on sale with a coupon is almost always more expensive than an off-brand (Pepsodent, say) on sale. Cheaper still are the sample toothpastes you get at the dentist. Those babies last for weeks!
There are rare exceptions, but they are so rare that I’ve found it’s not worth the effort – we’re talking about less than $5 a year.
My rule of thumb with coupons is similar to yours. Clip them only for stuff you would buy anyway.
Wai Yip Tung says
The best money saving tips is just don’t buy things. Or don’t buy things you don’t really need.
Coupon are marketing tools. They give you a discount to encourage you to spend money. You may not usually eat a lot of chocolate bars. But if there a discount of $1 off a $5 chocolate bar, it look such like a good deal that you might as well get one. You saved $1 off the full price. But the other way to look is you’ve spent $4 more than you’ve originally planned.
Of course if you are buying thing you will need anyway, like laundry detergent, you might as well take advantage of any discount offered. But coupon and discount is a very strong incentive to consumer. You have to be really careful and disciplined to use to save money rather than spending extra.
The best advice is still don’t buy things you don’t really need.
“Fresh produce isn’t expensive anyway.” Our produce bill (for 5) is $50-$75 a week. Luckily we can afford it. But if someone is down on their luck (or just making the average american salary) I don’t blame them one bit for using coupons to buy the healthiest canned or frozen produce they can find with coupons. Food is different. It’s not like you can say “we won’t buy food this week because we have to get the car repaired.” You have to eat. Some weeks you might have the money for healthier food. Some weeks you might not, but you still have to eat (and maybe feed children).
Coupon shopping is not all about saving money on a box of Pop Tarts anymore. Couponing has changed with the times. Your opinion sounds a little dated.
Harry Sit says
@jennypenny – No doubt some people buy canned or frozen produce with coupons, but that’s not how most people use coupons at grocery stores. I took a look at the coupons on a coupon blog. Of the 25 coupons listed on the first page, none are for canned or frozen produce.
I work for a CPG company. Manufacturer’s coupons are primarily a way to either incite trial (e.g. 50 cents off 1), get you to buy more of the product than you normally would (e.g. $1 off 4), and/or as a way to get the item into more grocery stores (“Hey Walmart, you can choose not to carry our new item if you don’t want to, but we thought you’d like to know that we’re circulating 40 million of these coupons in newspapers in 3 months and folks will be coming to your store expecting to be able to use it.”). Sometimes there are other uses like driving cross-purchase (e.g. a company that owns both a popular cracker and not-so-popular cheese brand could apply coupons to the cracker box that provides a discount on the cheese).
While I think many of TFB’s points are well taken, I don’t think it’s fair to compare fresh produce to a can of Pepsi. There’s plenty of very unhealthy things you can make from scratch. A cake made from scratch isn’t going to be any better for you than one made from the Betty Crocker mix. Likewise, canned and frozen vegetables are an absolutely acceptable and convenient alternative to fresh produce.
If the advice is “eat more vegetables,” I agree wholeheartedly. But I think the advice being “don’t use CPG coupons because most CPG items aren’t vegetables” is a bit convoluted. Kind of like saying “don’t eat because most foods aren’t vegetables.”
Or you can just buy the store brand and forget about coupons. Much quicker and saves the same amount of money – usually more.
Quality is the same or better in many cases. It’s also sort of fun finding out who the name brand manufacturer of the store brand is …
Totally agree that most coupons are a waste, as they promote products not food.