Wednesday, May 23, 2012

A Decision Making Rule Set That Can Put $1000 Per Year in Your Pocket.


Have you seen the TLC show "Extreme Couponing"? It's an awesome show in which coupon fanatics develop advanced strategies to maximize discounts, sometimes buying several hundred dollars worth of "stuff" for just a few dollars.

I admit I was really amazed by this concept, so a few months ago I started to clip coupons to see how much I could save. I have to tell you it was a a real adrenaline rush of sorts to stand in the grocery line and have the cashier take twenty dollars off my bill simply because I handed him/her a few little slips of paper that I had clipped. But it wasn't long before I realized my couponing wasn't working well. My son complained that we had enough Johnsonville Chicken Sausage to feed an army. Also, I learned that when I grocery-shopped with my kids (to save time by having them hunt down some of the items) that an enormous amount of junk food gets plopped in the basket when I'm not looking. And when I gave coupons to one of my children and asked them to find an item, I sometimes got the wrong stuff. California Pizza Kitchen makes some darn good frozen pizzas, but when I got home I realized that my son had picked out a pizza that really offended my Sicilian heritage - Barbecue Chicken Pizza. Yuck!

Also, after watching the extreme couponers a few more times, I realized that many were just buying stuff that they really didn't need and giving it away or stockpiling it. Since there is no utility in buying something that you don't need no matter how cheap you get it (and everything we buy contributes to our carbon footprint), it seemed to me that one could be much more strategic, purposeful, and responsible about using coupons.

 I decided to practice what I preached in my book and developed an algorithm for determining what coupons to use. Remember in The Naked Portfolio Manager, I presented the case that decision-making can be improved if the decision-maker creates a rule set that can be used in lieu of applying his judgement. So I created a rule set for using grocery coupons that can be applied in 15 minutes per week. Here are my rules :
  1. Spend three minutes reviewing each insert from Kroger and Martins.
  2. Before clipping any coupon, ask these three questions:
    • Do I use this product?
    • Will the coupon provide savings over store brands?
    • Am I likely to use the product in the next thirty days?                                                
 The next steps are:
  1. Shop in larger stores to maximize the chance that they will have the product in stock and you can use the coupon.
  2. Throw away unused coupons. (There will be more next Sunday)
  3. Shop alone.
When I applied this strategy, buying only things that I would use in the next thirty days, I saved almost $12 on a purchase that was under $30. Had I purchased another Sunday paper, I could have bought twice as much and saved $24. Basically, this is a triage system for the busy person who does not want to spend hours preparing to go shopping like the people on "Extreme Couponers." You just pick the low-hanging fruit - the most valuable coupons to you. The reason that you throw away the unused coupons (a cardinal sin for extreme couponers who save them until they expire in case that can get a really good deal somewhere) rather than cataloging them and indexing them by expiration date is to save yourself time in the long run.

With the Memorial Day holiday coming up the newspaper will be filled with coupons. Give my rules a try. Feel free to modify them to better suit your needs. I think you will find that investing a minimum amount of time and applying a rigid discipline to your decision-making can save you $10 to $20 a week on groceries if you buy only stuff that you use. I think you will get a kick out of watching $10, $15, $20 come of your check when you are in the grocery line. Let me know how it works!

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posted by Bob Fischer at

2 Comments:

Blogger Stephanie White said...

Agree with the challenges. The one thing I stumbled on recently that assists with the process is I use the Kroger mobile app and use this process....

1 - select the electronic Kroger coupons for items that I definitely use or need routinely in recipes (online or mobile)
2 - review the Kroger weekly add to see what is on sale this week that I definitely use and add them to my shopping cart....(online or mobile)
3 - use the mobile app to see the shopping list which magically notes the overlaps in list 1 & 2
4 - then I look at the week's coupons in the Sunday paper so I know which ones to use this week and which ones to file for later

The big adrenalin rush for me is hitting the big trifecta where the product is on sale, has a Kroger coupon, and a manufacturer's coupon.

And don't forget Kroger's Free Friday coupons.

Wooo Hooo!

thanks for sharing,
Stephanie

September 7, 2013 at 1:24 PM  
Blogger Stephanie White said...

Agree with the challenges. The one thing I stumbled on recently that assists with the process is I use the Kroger mobile app and use this process....

1 - select the electronic Kroger coupons for items that I definitely use or need routinely in recipes (online or mobile)
2 - review the Kroger weekly add to see what is on sale this week that I definitely use and add them to my shopping cart....(online or mobile)
3 - use the mobile app to see the shopping list which magically notes the overlaps in list 1 & 2
4 - then I look at the week's coupons in the Sunday paper so I know which ones to use this week and which ones to file for later

The big adrenalin rush for me is hitting the big trifecta where the product is on sale, has a Kroger coupon, and a manufacturer's coupon.

And don't forget Kroger's Free Friday coupons.

Wooo Hooo!

thanks for sharing,
Stephanie

September 7, 2013 at 1:25 PM  

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