MoneyToSpare.net is now offering an 30-page e-booklet detailing a number of ways to save money on groceries. (See the sidebar for more info.)
One method that's not included is the use of coupons, for two reasons.
First, I've noticed that most coupons seem to be for highly marketed national brands that sell at premium prices compared to similar products. Getting a few cents off on something that's overpriced to begin with is not my idea of smart shopping.
Secondly, coupons seem to involve more time and effort than they're worth. First, you have to sift through the Sunday paper's avalanche of advertising; clip, if you can find them, coupons for items you actually want; then sort them somehow so when you go shopping, you can find the right coupon for a particular product. (Yes, I know that you can buy little sorting folders, I just wonder how much time they actually save.) Then you have to remember to use the coupons before they expire. (Do the little folders sort by date or alphabetically?)
It just seems to me that you'd end up putting in five minutes worth of work to save $.50 (on a product that's overpriced to begin with) which works out to paying yourself at the rate of $6 per hour, not exactly an exciting prospect.
Still, I may be wrong. (It happens!) So I'm asking those of you who use coupons to let me and the readers of this blog know what we're missing, by either sending me an email at csykes@syryn.com or leaving a comment.
Show me the error of my ways! Convince me and I'll collect the best coupon expert's tips and include it in an update of "8 Ways To Save Up To 40% On Your Groceries."
P.S. Yes, I do know about cashier coupons and other special coupons that offer "2 for 1" deals or "$1-off" deals. But these aren't that common. So let me know how you make out with "regular" coupons...and for a valid comparison, please calculate and include the time you spend clipping and sorting.
Showing posts with label Money. Show all posts
Showing posts with label Money. Show all posts
Saturday, January 10, 2009
Tuesday, September 23, 2008
The Time/Money Formula: How Much Money Will You Save?
A few posts back, I provided a Time/Money formula to let you know if buying any particular "time saving" product was worth the extra cost. By using this formula, you get a cost per hour figure, which provides a better idea of the real price.
For example, it can be hard to decide if spending $1 to save two minutes makes sense, but when you use the formula:
60 divided by the number of minutes saved x the extra cost = money per hour spent.
(60 divided by 2 x $1 = $30)
you'll realize that you're paying for that two minutes at an hourly rate of $30.
For a lot of people, that's more than they earn per hour, so they may actually be working two or three times the number of minutes saved to buy the product. In the example above, for instance, if you make $10 an hour, you're working six minutes to make the money to buy a product that saves you two minutes!
But what about the flip side? What about spending time to save money? Well, I have a formula for that, too.
Suppose you want to save $50 by mowing your own lawn, but doing that takes an hour and a half. How can you know if this is a good idea?
Try this computation:
60 divided by the number of minutes spent x the cost saved =money per hour saved.
(60 divided by 90 minutes =.66 x $50 = $33 per hour saved)
For someone who makes $20 per hour, that’s a pretty good deal. But if you make $45 an hour, you’re spending an hour and a half, worth $67.50 at your pay scale, to save $50.
Of course, there are other factors involved in any such decision. You may need the exercise involved in mowing your lawn, or if you may just enjoy doing something outside. But if saving money is your motive for sweating in the hot sun, this version of the Time/Money formula will help you decide if its worth it.
So again:
To find out if it’s worth spending money to save time:
60 divided by the number of minutes saved x the extra cost= money per hour spent.
To find out if it’s worth spending time to save money:
60 divided by the number of minutes spent X the cost saved= money per hour saved.
I’m going to post these formulas in the sidebar. Try 'em out....you may be surprised at the results when you start checking things with the Time/Money Formulas.
For example, it can be hard to decide if spending $1 to save two minutes makes sense, but when you use the formula:
60 divided by the number of minutes saved x the extra cost = money per hour spent.
(60 divided by 2 x $1 = $30)
you'll realize that you're paying for that two minutes at an hourly rate of $30.
For a lot of people, that's more than they earn per hour, so they may actually be working two or three times the number of minutes saved to buy the product. In the example above, for instance, if you make $10 an hour, you're working six minutes to make the money to buy a product that saves you two minutes!
But what about the flip side? What about spending time to save money? Well, I have a formula for that, too.
Suppose you want to save $50 by mowing your own lawn, but doing that takes an hour and a half. How can you know if this is a good idea?
Try this computation:
60 divided by the number of minutes spent x the cost saved =money per hour saved.
(60 divided by 90 minutes =.66 x $50 = $33 per hour saved)
For someone who makes $20 per hour, that’s a pretty good deal. But if you make $45 an hour, you’re spending an hour and a half, worth $67.50 at your pay scale, to save $50.
Of course, there are other factors involved in any such decision. You may need the exercise involved in mowing your lawn, or if you may just enjoy doing something outside. But if saving money is your motive for sweating in the hot sun, this version of the Time/Money formula will help you decide if its worth it.
So again:
To find out if it’s worth spending money to save time:
60 divided by the number of minutes saved x the extra cost= money per hour spent.
To find out if it’s worth spending time to save money:
60 divided by the number of minutes spent X the cost saved= money per hour saved.
I’m going to post these formulas in the sidebar. Try 'em out....you may be surprised at the results when you start checking things with the Time/Money Formulas.
Monday, August 25, 2008
Budgeting, Part IV
Having spent some time tracking your cash spending, you now have a lot of information on how you spend your money. Now it's time to start fitting the pieces together.
I'm assuming you're putting together a budget at least in part because you aren't happy with your current financial situation. Maybe you're getting deeper and deeper in debt and you're need to know why. Maybe you're just coming up a bit short every month and you'd rather break even. Or maybe you have enough to live on, but you'd like to put some money into savings. A budget is a great tool to help you towards your specific goals. I'm going give you suggestions on what you should do with all this information, but feel free to do things differently if that better fits your situation.
I suggested at the beginning of this series that you start by putting your income and your checking and credit card expenses on a monthly basis. Do the same with your cash purchases. Months vary in length, so a good formula is to count an average month as 4.3 weeks.
Add your reliable income sources up to create a monthly total. Is it what you expected? Are you sure you've included everything? Did you leave out income that you can't really count on, such as certain types of bonuses and commissions?
Then add up your "must pay" and unalterable expenses, which basically are income and property taxes, plus any court-mandated payments such as alimony, child support or judgements you must pay. These are checks you must write each month.
Next comes what I call "semi-discretionary" expenses. These are items that are difficult but not impossible to change. Mortgage or rent payments, basic utilties (this does not include cable or satellite TV!) Health, life and car insurance, car payments, landline phones, day care expenses, credit card payments, car maintenance and so forth.
Next comes "discretionary expenses." These are things you can change relatively easily. Food,clothing, entertainment, vacations, furniture....
When you've placed everything in a category, add up all your monthly totals and compare that to your income. Hopefully, subtracting your expenses from your income leaves a postitive number. If not, and increasing income is not an option, it's time to start looking at how you can cut your expenses. How big is the deficit? A few bucks short each month is an easy fix, but a significant amount will require some serious changes. Again, only you can determine what your needs are.
This is why I suggested you sort your expenses into the categories above. If, for example, you need to cut expenses by less than 10%, its time to start looking at ways to ease off on your discretionary spending. (You'll find some suggestions on this blog.) For example, you might start checking out books and videos from the library instead of buying them, or drop to a lower tier on your cable. If you find that you're spending a lot of money dining out, start eating at home more often or taking lunch to work. If you have a lot of overcharges on your cell phone, check for a better "unlimited" deal...or figure out a way to use your phone less! The savings from a few changes like this might be enough to get you back into the black.
If you're in real trouble, though, you may need to go to the "semi-discretionary" items. It may be time to trade your gas guzzler for a good, used gas-sipper, or if you have two cars, see if you can get by with one car and public transport. (Remember, one less car also means less insurance and maintenance costs.) If deeper cuts are necessary, can you move to a cheaper apartment or smaller house? (Check what expenses may be involved before making this decision.)
Talk with your family to come up with ideas. It's best not to play the "blame game" but instead work together to see who can cut what. If everyone can pitch in, it will be much easier to reach your goals. Good luck!
I'm assuming you're putting together a budget at least in part because you aren't happy with your current financial situation. Maybe you're getting deeper and deeper in debt and you're need to know why. Maybe you're just coming up a bit short every month and you'd rather break even. Or maybe you have enough to live on, but you'd like to put some money into savings. A budget is a great tool to help you towards your specific goals. I'm going give you suggestions on what you should do with all this information, but feel free to do things differently if that better fits your situation.
I suggested at the beginning of this series that you start by putting your income and your checking and credit card expenses on a monthly basis. Do the same with your cash purchases. Months vary in length, so a good formula is to count an average month as 4.3 weeks.
Add your reliable income sources up to create a monthly total. Is it what you expected? Are you sure you've included everything? Did you leave out income that you can't really count on, such as certain types of bonuses and commissions?
Then add up your "must pay" and unalterable expenses, which basically are income and property taxes, plus any court-mandated payments such as alimony, child support or judgements you must pay. These are checks you must write each month.
Next comes what I call "semi-discretionary" expenses. These are items that are difficult but not impossible to change. Mortgage or rent payments, basic utilties (this does not include cable or satellite TV!) Health, life and car insurance, car payments, landline phones, day care expenses, credit card payments, car maintenance and so forth.
Next comes "discretionary expenses." These are things you can change relatively easily. Food,clothing, entertainment, vacations, furniture....
When you've placed everything in a category, add up all your monthly totals and compare that to your income. Hopefully, subtracting your expenses from your income leaves a postitive number. If not, and increasing income is not an option, it's time to start looking at how you can cut your expenses. How big is the deficit? A few bucks short each month is an easy fix, but a significant amount will require some serious changes. Again, only you can determine what your needs are.
This is why I suggested you sort your expenses into the categories above. If, for example, you need to cut expenses by less than 10%, its time to start looking at ways to ease off on your discretionary spending. (You'll find some suggestions on this blog.) For example, you might start checking out books and videos from the library instead of buying them, or drop to a lower tier on your cable. If you find that you're spending a lot of money dining out, start eating at home more often or taking lunch to work. If you have a lot of overcharges on your cell phone, check for a better "unlimited" deal...or figure out a way to use your phone less! The savings from a few changes like this might be enough to get you back into the black.
If you're in real trouble, though, you may need to go to the "semi-discretionary" items. It may be time to trade your gas guzzler for a good, used gas-sipper, or if you have two cars, see if you can get by with one car and public transport. (Remember, one less car also means less insurance and maintenance costs.) If deeper cuts are necessary, can you move to a cheaper apartment or smaller house? (Check what expenses may be involved before making this decision.)
Talk with your family to come up with ideas. It's best not to play the "blame game" but instead work together to see who can cut what. If everyone can pitch in, it will be much easier to reach your goals. Good luck!
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