You probably think that coupons save you money, and if you use them correctly, you're right. However, stores and manufacturers issue coupons to increase their total sales, which means that if you aren't careful, you can end up overspending when you shop with coupons. Coupons expose consumers to additional advertising, increase shopping activity, steer consumers toward more expensive products and provide temptation to buy discretionary items. (For more on this topic, read 6 Sneaky Ways Coupons Make You Spend More.)
TUTORIAL: Budgeting Basics
Don't allow couponing to cost you more than it saves. Use these strategies to counteract the stores' and manufacturers' coupon tactics and come out ahead.
1. Plan your shopping trip ahead of time.
Don't let your coupons keep you in the store longer. The longer you're there, the more items you're likely to toss in your cart. Instead of throwing all your coupons in an envelope and heading to the store, make a shopping list that's organized by the way your grocery store is laid out and note which items you have coupons for. Then, organize your coupons to coincide with your list. Spend the extra time at home preparing and you'll be able to shop quickly and efficiently. For coupon items whose locations you're not familiar with, ask an employee at the beginning of your shopping trip, then enter the item in the appropriate place on your list so you avoid doubling back.
2. Limit the time you spend clipping coupons and clip while you're distracted.
If you only clip coupons, say once a week for an hour, or in spare moments while you're doing something else, your attention will be diverted away from the additional advertising in the coupon circulars. You'll be more likely to quickly locate and clip coupons for products you actually want or need, and pay less attention to the advertising and the coupons that you don't need.
3. Make a mental budget for individual items, and stick to it.
If you want to try that new fancy frozen dinner that only serves two people for $9 a bag but you have a $5 off coupon for, go for it. But unless you think that $4.50 is a good price for a meal you eat at home, use the coupon to treat yourself, not to form an expensive new habit.
4. Don't clip coupons for items with unknown prices.
When you see a coupon for $4 off a specialty razor that $4 off may sound like a great deal. However, when you have no idea whether the razor costs $5 or $15, you can't evaluate whether the overall deal is worth it until you get to the store. You're better off sticking with whatever product you currently use, because you've probably decided that it's worth the money without the coupon.
5. Avoid premium coupons or use them sparingly.
Don't let yourself be permanently upsold by a coupon. Sometimes coupons are only good on premium versions of products, not basic versions. Other times they are good on any version of the product, but feature an image of the premium product so that you think you have to buy the more expensive version to use the coupon. Often, the more expensive version will be better, but is the difference significant enough that you want to permanently increase your spending on that item? Sometimes the answer may be yes, but if you're trying to watch your budget, stick with what you know and avoid new temptations.
6. Look for generic coupons in store circulars.
You're not likely to find a coupon for any generic item in a coupon circular because the coupons, while they may be tweaked slightly by region, are intended for a national audience. In a store's own advertising, however, you might find coupons for that store's house brand of products, which means you can combine generic savings with coupon savings.
However, you can still achieve significant savings with brand-name coupons. The key is to combine them with sales. This strategy can result in savings that make the brand-name item significantly cheaper than the generic item, or at least comparable to it.
Being Coupon-Savvy Pays
The next time you're browsing through the coupon circular from your Sunday paper, remember that coupons can be a great way to save money, but you have to think strategically about how to use them. If you don't, you may find yourself spending more than you save. (For related reading, see Is Coupon Clipping A Waste Of Time?)
Active Trading FundamentalsFind out how Groupon makes money, including a rundown of how Groupon works and what benefits it provides to the businesses it partners with.
Bonds & Fixed IncomeTo determine the value of a bond today - for a fixed principal (par value) to be repaid in the future at any predetermined time - we can use an Excel spreadsheet.
Investing BasicsCoupon rate is the stated interest rate on a fixed income security.
Bonds & Fixed IncomeWhenever we talk about the asset-liability approach to portfolio management (ALM), the concepts of immunization and cash flow matching come into play.
Personal FinanceThese cash incentives lure in consumers, who are often unable to collect on the deal.
BudgetingThese tips will have you singing "Joy to the World" well into the New Year.
SavingsLabor Day is coming up this weekend, and with it will come Labor Day sales, deals and freebies.
BudgetingChristmas shopping can be expensive, but there are ways to get gifts free or nearly free.
SavingsCouponing is extremely popular and that doesn't look like it's going to change any time soon. Here's a look at some of the best sites for coupon deals.
SavingsFrugal living can be wise, but some money-saving moves can result in you spending more money.
Generally speaking, convexity decreases as yields increase (geometrically, the yield curve tends to flatten at higher yields). ... Read Full Answer >>
A bond's coupon rate is directly affected by national interest rates, and consequently, so is its market price. Newly issued ... Read Full Answer >>
A bond's coupon rate is simply the rate of interest it pays each year, expressed as a percentage of the bond's par value. ... Read Full Answer >>
The resulting Macaulay duration of a zero-coupon bond is equal to the time to maturity of the bond. A zero-coupon bond is ... Read Full Answer >>
Use the Macaulay duration to calculate the duration of a zero-coupon bond. The resulting Macaulay duration of a zero-coupon ... Read Full Answer >>
A bond's coupon rate is equal to its yield to maturity if its purchase price is equal to its par value. The par value of ... Read Full Answer >>