How to Save Money Without Worrying About Coupons

Clipping coupons can save you money. It’s also a pain. Here’s how you can save money without coupons or the hassle that comes with them.

The retail industry has everyone fooled. Millions of people spend their time scouring for deals, clipping coupons from the newspaper, plugging into the latest mobile deal applications, and sharing their finds on Facebook to recruit friends for group deals. Meanwhile, the companies on the other side of the transaction are generating higher profits.

Can anyone really complain? Consumers are saving more money than ever and yet retailers are raking in more revenue. Even as we’re still trying to recover from the employment effects of the recession and economists say the middle class doesn’t have enough to spend to stimulate the economy on their own, the industry is thriving.

The National Retail Federation won’t release its annual holiday predictions for a couple more weeks. But I bet when it does, they’ll expect plenty of growth over last year. The NRF tends to be very optimistic heading into the holiday season. But they haven’t yet misplaced their trust in consumers’ capacity to spend.

It seems like this should be impossible. How can consumers be saving more while retailers are bringing in more revenue? Well, there are two important assumptions to overcome.

1. Saving more is not the same thing as spending less.

Retailers will continue offering sales, deals, and coupons because these tricks simply encourage consumers to spend more. A perceived deal can help convince a spender to open his wallet or swipe her credit card when they might not have otherwise. This isn’t the result only on the large scale. It’s proven behavioral finance that holds true on an individual basis.

A recent study found that heavy digital coupon users spend more than twice as much per year as non-coupon users. If you use coupons, you spend more, not less. You are not saving money. It’s true you’re getting more for the money you are spending. But research clearly shows you wouldn’t be spending that money in the first place without the coupons.

The only way to save money is to spend less. And most of the time using coupons doesn’t actually help you reach that goal.

2. It’s a zero-sum game.

Economists talk about the growth of wealth not being zero-sum. That is, when some individuals become more wealthy, another group doesn’t necessarily have to become less wealthy. The economy can grow and, in theory, lift everyone who plays a part in it.

Another way of illustrating the lack of the zero-sum game in the economy is by talking about wealth re-distribution upwards. Consumerism is how money from the middle class and lower goes through a process that benefits the corporate class–the executives in large corporations, private equity firms, and preferred shareholders. If the transaction is reduced to its basic components, it looks like money is simply moving from consumers to producers, building more wealth for one group of society while keeping a larger group financially dependent.

Economists agree the process is more complex than this. And as producers show their relevance to society, they create enough economic substance, adding to the full “pie” to match or exceed the wealth that flows in their direction.

But on an individual level, the macroeconomic reality isn’t relevant. The bottom line is that when you spend money, you have less money. What you spend as a consumer doesn’t come back to you in the form of greater potential for building wealth. Every purchase eats into your wealth. The more you spend on movies and concerts, the less you’ll have available for food, rent, and long-term savings.

When you understand the above factors, you’re better able to make choices that actually help you spend less money, rather than just “saving money.”

How to Actually Save Money

So what kinds of decisions should you make instead of using coupons? Try these:

1. Shop less often.

I could buy some new items every time I go shopping for clothes. A few weeks ago, I found myself at an outlet center near the New Jersey shore. It’s hard to resist some of the nice clothes I can find on sale. I’m tempted to buy something every time I’m shopping, which is completely unnecessary. If I just don’t go, I wouldn’t buy anything.

This counts for necessities, too. How often do you buy a few extras at the grocery store? Cutting back to two or three trips a month can help you avoid this.

2. Conserve what you have.

A corollary to the above is that you can make what you already own last longer. In terms of clothing, I still had a lot of my clothing from college–and even some tee-shirts from high school. I was probably thirty-five years old when I finally went through and eliminated some of the stuff I didn’t want to or could no longer wear.

But because for many years I had no extra money to spend, I simply made do with what I had. It wasn’t until I had some extra income that I decided it was time to upgrade my wardrobe — although it helped that I wasn’t going into an office every day.

Again, this can also apply to food. Clean out the fridge and pantry and eat up the leftovers before you grocery shop!

3. Buy in bulk.

From a behavioral finance perspective, there is one trick that does work to spend less money over the long term: buying in bulk. But there’s a trade-off. You need to store what you buy. Having more stuff takes up extra space, requiring a larger living space than you might otherwise need.

And there’s an up-front cost. You’re spending more money today than you normally would. It reduces your cost in the future. But a lot of people living paycheck-to-paycheck can’t necessarily handle larger up-front expenses.

However, there are some great bulk buying options on the market today, including websites like Boxed. These can let you get just a few things in bulk at a time. And they don’t necessarily have an annual membership fee. So if you can buy toilet paper in bulk this month and paper towel next, over time you can build a stockpile. And this can save you some serious cash.

4. Reconsider your needs and wants.

Many times we’re spending more than we need to spend because we haven’t given a lot of thought to whether a purchase is necessary. Sure, it’s sometimes fine to spend unnecessary money for something you don’t really need. This is especially true as you get closer to the goal of becoming financially independent!

But you shouldn’t be in the habit of automatically gratifying your every whim. Take some time. Add a delay into the process. Wait twenty-four hours if you find yourself with the urge to make an impulsive decision. This provides an opportunity to consider your other options or how that money could be otherwise utilized.

And, of course, it’s always a good idea to shop around. Sometimes a quick online search can net you serious savings on something you’re planning to purchase.

5. Use coupons and loyalty programs wisely.

I know. I just said that you shouldn’t use coupons. But that’s not the case 100 percent of the time.

One smart option is to look for coupons after you’ve decided to purchase something. This is easier with apps like Honey. It searches for coupon codes while you’re in the checkout process online. So you can shop as if you were not going to use coupons. But then if you get them, you can go on your merry way, having saved some money.

There’s something similar to be said for rewards programs. For instance, I get loyalty rewards offers from Van Heusen, one of my favorite clothing brands. But typically, I have to spend those rewards within a certain amount of time. Sure, that $20 towards my next purchase could buy a new shirt. But if I start shopping, I’ll likely spend a lot more than that. And that’s money I hadn’t planned on spending originally.

However, sometimes these types of “spend it before it’s gone” deals can be worth signing up for. For instance, kids’ clothing stores often have these programs in place. And since kids go through clothes so quickly, these rewards can add up quickly. Just use them wisely. Buy your kids’ clothing in small batches, rather than large shopping sprees. And buy sizes ahead if you get good discounts that expire within a certain time frame.

And, of course, you should always be on the lookout for similar brands that offer the same stuff at a cheaper price. Loyalty programs can trap you by keeping you from shopping around. So don’t feel tied down to a certain retailer because of their loyalty program.

6. Use a budget.

There are as many different ways to budget as there are people. But the bottom line is that a budget is a spending plan. When you take time to plan out your spending for the month (or week or even year), you’ll have some goals in mind. And you’ll know–if you’re tracking your spending–when you’re spending outside of the budget.

This can be a powerful tool to curb unnecessary spending. And it plays into tip four above. When you have to plan out each month’s spending, you won’t let yourself jump on “deals” this month just because they exist. So that sale makes you feel like you need a new pair of jeans and a sweater? Great! Put that in next month’s budget, and buy it then!

It’s tempting for any particular person to believe that they are better than the average: Overall, people who use coupons end up spending more money, but I’m the exception. Well, that’s always a possibility, just as it’s possible that you’re an above-average driver. But it’s not likely, just as studies show that more than half of the population believes they’re better drivers than average. This is the illusory superiority cognitive bias.

Ditch the coupons, and stop wasting your time on efforts that don’t actually save money. Consider your choices, and make decisions about your shopping behavior while keeping in mind the tools and techniques that do improve your financial situation over the long term.