Monday, August 16, 2010

How to use Coupons to Save Money

According to online calculators, solely based on the fact that my child is not yet born, projected total cost for college is $312,000, or a monthly savings of $602! Depending on whether your child goes to a public state school or an Ivy League college, monthly savings for a newborn fall anywhere in the range of $400-$1200. If your child is already sixteen, those monthly goals increase to between $1200-$3500. Excuse me? So on top of paying my mortgage, household bills, feeding a retirement account and day- to- day living expenses, I now have to figure out a way to sock away an extra $600 per month for college? There’s no way!

Never say never, my friend. Please take the same advice I offered myself… don’t panic! While these amounts certainly seem daunting, let’s change our perspective and see them as a challenge instead. It’s just a simple mindset change. As my wise, level-headed husband says, our goal is to at least give our child a head start. So I propose a new mantra for us all to follow and an invitation to take on the challenge of finding creative ways to add money to the college fund. The mantra is this: Every Little Bit Helps.

One interesting way that I’ve been saving money that I never thought I would utilize is couponing. Couponing has surprisingly become quite fashionable these days! You can make it as simple or complex as you want and go about it in many different ways. There are myriad websites that basically do all of the leg work for you (some of my favorites are hip2save.com, jillcataldo.com, and mashupmom.com). They list where and when to find the best deals and many even provide links to on-line coupons so you don’t have to clip inserts from the Sunday paper. Everybody will offer a different strategy- clipping vs. not-clipping, organizational systems, etc.

After experimenting with this phenomenon for quite some time, I’ve finally found what works for me. Basically, the keys to really saving money with coupons are:

  • Waiting for the sale - Stores know when coupons first come out. They bank on the fact that people will use them right away, therefore items are full price. If you wait a few weeks, the items eventually go on sale and then you get much more bang for your buck.
  • Stacking - Many stores allow you to stack a manufacturer’s coupon with a store coupon. For example, you can use a Target coupon for $1.00 off an item and a manufacturer’s coupon for an additional $1 off that same item.
  • Stocking Up - When you are able to get a great deal on an item, stock up! There is nothing wrong with having extra toilet paper on reserve!
  • Buying what you need - Many coupon sites actually argue the merit of buying things you don’t need in order to save on other items. (You can donate the items you don’t need.) However, I personally find it more worthwhile just to buy what I need and will actually use. Store
  • Rewards/Incentives - In addition to savings, many stores offer rewards and cash back incentives that you can use at a later date. For example, if you buy an item at Walgreens that offers Register Rewards, in addition to the savings you get with your coupon, you will also earn extra money to use towards a future purchase. If you keep it rolling correctly you could end up with some good freebies.

Before you dismiss this idea, consider my couponing item of choice: cereal. Cereal, on average costs $3.50 a box. Well, now, thanks to couponing, I don’t spend over $1.50 for a box of cereal. Sometimes I even get it for free! Now, consider how something as insignificant as breakfast food can impact my child’s college fund:

Let’s say the average family goes through 10 boxes of cereal per month. If purchased at full price, this would be a monthly bill of $35. With coupons, the total cost would be $15 at most. That is a $20 monthly savings, or an annual savings of $240. Invested wisely, at an average return rate of 5% over the next 18 years, savings yield will be $7033.14. Now that’s nothing to scoff at!

Sure, it would be wonderful to completely cover college for our children. Ideally we all will reach those lofty monthly targets one day. However, every little bit helps and by doing something as simple as using coupons to save on everyday household purchases, the savings will continue to blossom.

Now consider the many items you use regularly that could add up to decent “extra free money” through couponing (toothpaste, toilet paper, shampoo, pasta sauce, diapers, tissues, soap, cleaning items, etc. ). The savings can really add up! Keep the ideas coming, be creative, and you may even reach your goal after all!

Where do you look for college savings? Share your tips with our readers. Did you know FreshmanFund.com can help you save more for college? Every bit helps!

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