You may have heard of people who find fantastic deals, buy in bulk, and lower their grocery and living expenses to a crazy degree. And some people do. In fact, some people have found ways to maximize their savings by using coupons, double- and triple-deals, points cards and so on, and end up spending a ridiculously low amount on a monthly basis. Do you actually know any of those people?
Because I don’t.
While I envy the efforts of those who try to live frugally – especially this guy, who committed to spending only $1 a day and ended up having surplus to donate to food banks – and those who take advantage of deals to maximize their savings in the long-run, I have a sneaking suspicion that the majority of us are actually breaking our budgets by buying in bulk. As far as I know, us Canadians get stiffed on savings simply because we don’t have CVS stores – the number one saver I witness frugal grocery shoppers mention. So, to us CVS neighbours-to-the-North, it seems like a great deal to stock up while earning bonus points, gift cards or %s off, but what if we’re really just buying the image of saving?
When bulk makes sense
- When you have a large family and it makes sense to buy multiples for reduced prices – such as when each person needs their own tube of toothpaste, despite them all being the same brand and flavour. If you have toddlers, you know what I mean.
- If you have a large family of men, it makes sense to buy bulk sizes of any type of foodstuff that they’ll inhale. Again, you’ll know what I mean if this is your life.
- If you’re prone to batch-cooking or -baking, buying bulk cuts of meat, and stocking up on pasta, potatoes, frozen and canned vegetables, flours and so on is economical.
- If you use a bread-maker frequently, large bags of flour and sugar make sense.
- If you have a large freezer, buying 10 pounds of chicken at a low per pound price makes perfect sense – just divide it into meal-sized portions, date the freezer bags and store it until you need it.
- If you want to donate goods, buying multiple packages of products you use is a good plan.
- If you have the space and you’re not verging on hoarding, stocking up on anything that you’ll use, that you got for a good price, and that you didn’t have to spend money you didn’t need to (or have) to get is GENIUS.
Let’s look at some examples of advertisings that suck us into buying more, or in different ways.
Points for spending
When you get that flyer, email or newsletter, it seems like a genius idea: If you just spend a certain amount of money, you’ll get free points that you can use in the future to save more money! In fact, Shoppers Drug Mart just gave me 18,500 points for spending over $75 last week. But what if I didn’t actually need $75 worth of stuff, or the prices of items I bought we inflated, compared to another store that wasn’t offering the points-deal? Luckily, I only bought items that I needed, and that were cheaper or of equal price to what I would normally pay. And I ended up gaining a $30 savings in the future when I use my points. If there hadn’t been great sales on items that I needed, though, I would have been throwing money out the window.
Lesson: Know what points will ultimately earn you, be aware of ideal prices, and go with a shopping list. Don’t end up with things you don’t need, just to make the minimum threshold of spending.
Maximize the deal: If you will save a large portion of money in the future and you have the storage space, now is the time to buy non-perishable things that you’re constantly going through – as long as they’re wisely priced. Think bathroom tissue, paper towels, cleaning products, condiments, soda, frozen foods, toiletries.
Coupons that save you big bucks
You’ve got a cache of little scraps, all bold-facedly telling you to save money when you purchase a specific brand’s product in a specific size. If you wouldn’t normally buy the brand or the product and it will go to waste or sit in your home, collecting dust, get rid of the coupon. If it’s an item that you’re likely to use, have at ‘er as long as the price is right.
Lesson: Using coupons can convince us to buy items we ordinarily would pass by. Trust your instincts – just because it’s a deal, doesn’t make it more attractive once it comes home.
Maximize the deal: Use your coupons when the product’s already on sale, and if possible, also in combination with a points card or spending threshold deal.
Gift cards for spending
If you spend a certain amount on certain products, you get a gift card for future purchases at the store, or to a 3rd party. What if you don’t use iTunes, but it’s a $10 freebie, when you spend $50? If you’re planning to spend that much anyway, go for it – you can always give the card away as a gift; if you wouldn’t spend $50 without that deal dangling before your eyes, don’t bother.
Lesson: Just because you get something free, you don’t need to spend more. But, if it’s part of your plan, and you’ll put the freebie to good use, go for it.
Maximize the deal: Let’s say that you have $200 in groceries to buy, the store’s offering a $10 gift card if you spend $50, and you can guarantee that you’ll use the gift card. The store didn’t say $10 gift card for every $50 that you spend, so if you spend the $200 all at once, you’ll only get $10 in plastic back. Split up your shopping into four bills though, and you’ll end up for four $10 gift cards.
Use your Amex, Visa or Mastercard for bonus flyer miles, cash-back or points
The set-up: If you use a specific credit card for your purchase, you’ll get extra points, dollars saved, freebies and so on. This is of course a bonus when you were planning to use the card to start with, but not if it convinces you to spend extra per item or in total, and definitely not if you won’t be paying off your balance when the bill comes from your creditor. Why spend (in the form of interest charges or extra shopping to meet a threshold) to ‘save money’ and/or earn intangible rewards?
Lesson: Airmiles seem like a great freebie – I know I’ve bought extra peanut butter and cereal to earn some bonus miles – but if you’re not using the points anyway, they’re really not doing much for you. Especially if you’ve spent extra (via inflated pricing, impulse purchasing and interest on your charges) to earn them.
Maximize the deal: When you have cash for a large shopping trip, put it aside to pay off your credit card when the statement comes. Then shop as needed, combining coupons, sale prices and store points cards to maximize your discounts. Pay with the bonus-earning credit card.
Buy in multiples for a sale price or shop at a bulk supplier
Costco ropes so many of us in, but have you ever walked around with a calculator, figuring out their prices versus your regular, inexpensive grocer? I did. It turned out that my soy milk was actually more expensive per litre than it would have been at my No Frills store – but that three for $10.99 sign almost had me convinced. Try it and see what you come up with for your regular shopping list.
Lesson: if a deal seems amazing, it might actually be smoke and mirrors. Know your needs, regular prices for sizes of products that you’ll need (or have room to store) and don’t be afraid to keep the Costco membership for the savings on clothes, gel pens and books alone. I’m not judging you.
Maximize the savings: You find a great deal on something in bulk in comparison to your regular retailer, but there’s no way you’ll use it all so buying it would actually be burning money. It might not be if you split it with a friend, group or donate it to a worthy, needy cause.
What’s worse than spending extra to get points, freebies and so on, coming home and feeling like you over-did it? Driving across town to do so with a tired, hungry child. If there’s a superb deal but it’s further than you’d ordinarily shop, or you have to go to multiple stores to maximize your grocery savings, it might not be worth it. Gas, insurance, stress, quality time with your children, your time – those all have a price, even if most of them aren’t tangible.
An example: If you drive for half an hour, you’ll get a ham for Easter dinner at a quarter of the price it is in your neighbourhood. You’d save $15! How much would you spend in the extra gas, though? Let’s say five dollars. Now factor in an hour of driving, assuming that you avoid traffic rushes and the half hour you’d be shopping in an unfamiliar store – that’s at least worth $30. Tack on your son’s tantrum because they have The Cereal With The Cartoon On It and he needs it, now. Priceless. Add the stress of knowing that you must get home, store the ham and there’s a list of things waiting for your attention. Also, impossible to quantify. On top of it, you end up snapping at your son because his tantrum has finally broken you down a bit, so now he’s upset, you’re feeling guilty and stressed and no one’s happy. That’s gotta be at least an hour of therapy for each of you. So, to save $15, it may have cost you at least $260.