Lessons Taken from “Extreme Couponing”

Now that summer has arrived, I finally have the time to clean out my DVR and catch some re-runs.  Last month, I caught a part of TLC “Extreme Couponing” marathon.  For those who have never heard of it, “Extreme Couponing” is a show about people who have mastered and perfected the art of using coupons to stretch their budget.  For example, on the first episode, a woman walked away with $2,000 worth of groceries by paying just $100.  Rather than dismissing such people as “crazies,” I have come up with concrete reasons why the show, though entertaining, is inapplicable to younger professionals just starting out in the real world.

  • You must have coupons.  This is obvious enough.  In order to extreme coupon, well, you must have coupons.  There are different ways to acquire coupons.  Many of the people featured purchase multiple Sunday newspapers, up to 30 copies in one instance, for the coupon inserts.  Some dumpster dive.  Others use an online service where you can purchase already cut coupons for a fee.  And at least one woman had five computers in her house so she can print more online coupons (apparently you can print only two per computer).
  • You must have the time.  A lot of the people on the show are families where only one spouse is working, so that the other spouse can devote up to 60 hours a week planning their shopping trip hauls.  They are also willing to sacrifice and get up extra early to go to store before the store runs out of what they want to buy.  Further, some of these extreme check-out take up to two hours.
  • You must have a huge family or be somehow responsible for feeding  your friends and their friends.  Most of the people featured have families or extended families of four, six, eight, and ten.  And with the recession, it is absolutely necessary for these people to stretch their dollars, but they also have the body count to use up all that toothpaste, shampoo, cereal, and canned soup before they expire.  That said, not all these people are hoarders.  A lot of these people donate their hauls to charities, churches, and military families.  One woman lets her kid’s friends come over and take whatever they want.  If anything, these people are prepared for any sort of natural disaster.  Further, you need to bring along a helper so that (1) the two of you can push and maneuver three or four carts and (2) at check out, one can keep an eye on the cash register while the other continuously places items on the conveyor belt.
  • You must have the space.  These people’s stockpiles of groceries, health care and bathroom products will put most mini-mart stock rooms to shame.  This is simply not feasible for a younger person just starting out, living in a studio or one bedroom apartment.  By space, I also include your set of wheels.  No way are you carting home all that haul in your little compact car.  An SUV or truck is a must.

On the one hand, some of these people do seem to be suffering from a combination of addiction and hoarding.  They obviously experience some sort of high when they are able to save more than 90% at the cash register and that motivates them to continue chasing after that high.  And they also love admiring their stockpile.  I understand that, without doing what they do, they may not be able to feed and support their families.  At the same time, however, there are some issues that need to be dealt with.

On the other hand, there is absolutely nothing illegal or even wrong with what these people are doing.  All their coupons are offered by the manufacturer or the store.  They want you to use their coupons!  These extreme couponers also check and follow each store’s coupon policy.  And even for the woman who saved $1,900, that is not an amount that will be entirely footed by the store.  That amount is borne by the manufacturers of all the products she purchased.  And the manufacturers and the store ultimately are not losing anything – they are still making a profit.  That said, there are some key lessons that everyone can take away from the show.

  • Wait for sales – I think most people have figured this one out.  There are few reason to pay anything full price – except maybe the bus fare.  Otherwise, no one should be paying $4 for a bottle of shampoo or $3 for a pack of toilet paper.
  • Stockpile – I don’t mean stockpile like the people on the show.  You do not need a thousand tubes of toothpaste or forty pounds of chicken.  But when something does go on sale, buy a couple more than you need so that when you run out, you don’t have to go to store and purchase something at full price.  And hey, you have waited for the sale, so you deserve to splurge.
  • Forego brand loyalty – This may actually be hard for some people, because we are a picky generation.  I recognize that we must put our foot down when purchasing certain items.  It might be a particular brand of coffee or soda or deodorant, but I find it hard to believe that there is a certain brand we must use for each and every single item.  For example, I never purchase Scott tissue toilet paper, but I am neutral among Charmin, Quilted Northern, and Cottonelle.  I only use Schick razors (which have never given me a nick), but say “no, thank you” to Gillette.  I really cannot tell the difference between Jif and Skippy peanut butter, or all those pasta brands.  So you see, while there may be a few products we are stubborn about, there are plenty others where the brand simply does not matter.  And if you are willing to be just a little bit flexible, well that is money in the bank.

In sum, the show “Extreme Couponing” was entertaining enough, but as the saying goes, we should do “everything in moderation.”

Cash for a Clunker Appliance

Similar to last year’s cash for clunker program, the American Recovery and Reinvestment Act of 2009 has allocated $300 million for rebates to eligible residential consumers when they recycle their used appliances and purchase new energy-efficient ones (otherwise known as ENERGY STAR appliances).  Each state is in charge of designing  and implementing its own unique Appliance Rebate Program, and the Department of Energy (DOE) has already approved all of them.  A handful of states (Iowa, Kansas, Minnesota, Rhode Island) have started their programs, but most will launch theirs later this month.  Click here for details of the program available in your state. Continue reading

To Travelers: Time to Make Room in Your Wallet

Capital One has recently launched a new travel rewards credit card, as you might have already heard from its many TV commercials.  If you like to travel, Capital One’s Venture Rewards credit card could be your match made in heaven. Continue reading

IRS Open Houses Begin

This Saturday, March 27, IRS began holding Open Houses from 9:00 AM to 2:00 PM at over 180 offices across the nation to help taxpayers with their tax questions.  Click here to find the location nearest to you and here for the entire list of services provided.  And no worries if you missed this past Saturday, the IRS is holding additional Open Houses until the income tax return deadline on April 15th, so be sure to keep your schedule open.

Tip of the Week: Get in the Habit of Checking Your Credit Report

The Fair Credit Reporting Act guarantees each person free access to a credit report from each of the three credit bureaus (Experian, Equifax, and TransUnion) every twelve months.  It is generally good practice to periodically check your credit report to make sure it is accurate and that there are no suspicious, fraudulent, or unauthorized activities.  In another month, we are hitting a four-month mark in the year 2010.  If you have not ordered a credit report yet, now is the perfect time to do so.

One option is to order all three reports at once so you can compare them.  Another plan would to be alternate every other year between spreading your credit reports throughout the year and requesting all three at once so you can get the best of both worlds.  And remember to get your credit history from AnnualCreditReport.com, because it is the only source authorized by the Federal Trade Commission to provide free credit reports to consumers.

Insurance is Not Just for You and Your Car

Most of us at are probably renters.  We might be testing out different career paths or deciding which graduate school to attend, but the bottom line is that most of us have neither the funds nor the commitment to purchase a home and stay in one place indefinitely.  Instead, we hold a premium on being mobile.  But nearly two-thirds of renters do not have renters insurance and many landlords do not require this.  Here are three BIG reasons why renters need insurance: Continue reading

Relief for Retirement

Good news, the 401(k) match is back!  According to Chavon Sutton at CNN Money, 80% of the companies that suspended or reduced their 401(k) programs are planning to restore them this year.  When many companies stopped their 401(k) match programs last year, I suggested that people stop contributing to their 401(k) accounts and instead start investing elsewhere, such as by opening a Roth IRA account.  But now that they are back, if you’re given the option, jump back into the game and start contributing to your 401(k) accounts again.  Click here to find out why the match is such a great benefit offered by companies and why you can’t afford not to match.  If you have had to scale back on saving for retirement or have simply never been able to save because more urgent matters keep cropping up, this is the perfect incentive to start.

Homebuyer’s Credit: It Might be Better to Wait

If you are rushing to purchase a home and sign a binding contract before May 1, 2010 in order to get the homebuyer’s credit (a maximum $8,000 for first-time buyers or $6,500 for repeat buyers) and secure a low mortgage rate, it might be better to wait especially if you are still unsure.  According to Jack Hough at SmartMoney, once these incentives disappear, interest rates will increase 0.75% but home prices might drop as much as 5%.
Continue reading

Three Tips for Filing Taxes

No one likes to file their taxes and April 15, 2010 seems far away, but the deadline will be here before you know it.  Here are three tips to make it somewhat less onerous:

  1. File your taxes electronically - You can (1) e-file through the IRS website (this is the only option without any tax preparation help) , (2)  free file, which provides free income tax preparation and electronic filing for eligible taxpayers, or (3) pay for a tax preparation software or company if you do not meet the income requirements for free file.  Either way, filing electronically ensures faster refunds, greater accuracy, and less paperwork. Continue reading

Three Tips for Filing FAFSA

If you are returning to school this year as a graduate student, filing the FAFSA this time around might be slightly different from when you did it for college.  Here are a few tips to maximize your financial aid.

  1. File as soon as possible – While FAFSA requires information from your 2009 tax return and schools will request a copy of your tax return for verification, you DO NOT need to have filed your taxes to submit your FAFSA application.  Simply check the box that says “will file” on the application and correct your FAFSA later once you have filed your 2009 return.  Continue reading
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