The Before and After Test for Frugal Spending
In an article about frugal spending, the Little FAQs Website asks the question, “are coupons the best way to save money on groceries”? This is a good question for people to ask before they start using coupons in their quest for a frugal lifestyle but I think the question calls for some extra thought. That is because we don’t just want to use coupons or anything else to save money.
In my experience the number 1 reason why people fail to save money is that they buy too many “great deals”. Imagine you have $20 in your pocket and you go into the store to buy some fresh vegetables. The vegetables will cost you about $7 so you know you have money left over “to spend”. That is not the frugal way of looking at money.
So as you walk into the store you pass a display that offers a 2-for-1 price on canned soups. You were not planning on buying any soup and soup is not in your meal plan for the week. So you pick up a few cans of soup because “it’s a great deal”.
The great thing about canned soup is that it will last for a long time. You may be able to keep it in the cupboard for a year or longer before you eat it. Meanwhile, the money you paid for the soup is not reducing your debt, paying off monthly utilities, or paying for food you will eat in the near future. You have effectively locked up your money in the cupboard because you saw a “great deal”.
Before I make a purchase like that I ask myself what the benefit will be after I go home. This is an important question because while it makes sense to keep a little of bit extra food on hand in case you need to make an emergency payment somewhere, you don’t need to tie up a lot of money on “great deal” purchases that you don’t use in the near future.
How great is a great deal if you are still waiting to use what you bought at such a great price a year down the road? In fact, if you are buying refrigerated foods you have to eat them pretty quickly. Even frozen foods should not be kept for more than 1-3 months.
You are really not saving money when you take advantage of a great deal without planning how to use whatever you buy in the near future. Now, if you are making long-term plans such as going on an annual camping trip it does make sense to buy things at a discount when they go on sale, even if you don’t use them right away. But that is committing money toward an eventual expense whereas simply buying “great deals” without any plan in mind does nothing more than convert your money to something you may never use.
Never buy anything you have no plan to use. In the frugal lifestyle you may know that you bake cookies every Christmas but buying the cookie mix in January after it goes on sale is not really a good decision. You may save a few dollars but who wants to eat cookies made from year-old mix? That is too extreme a use of your savings instinct.
If food is made for a long shelf-life and you need to wait a long time before using the food (such as when you go on a camping trip) then it may make sense to buy it when the food goes on sale. But if the food is seasonal and optional (such as cookie and cake mixes) then buying it a year in advance because “it will never be cheaper” is not the best use of your money or storage space.
Retailers use coupons to move merchandise off the shelves, not to make your life easier. If you receive some great deal offers in the mail, before you spend that money make a plan to use whatever you buy. That way you will be ready to pass the “after test” when you get home. Loading up the car with things you really do not need is not the best use of your time and money.
