Wednesday, February 23, 2011

One Man's Solution To Our Economic Woes......

Not quite the usual fare today. I'm not even sure this really was a response to a newspaper story as the first line suggests. I got this as one of those e-mails that groups forward all over the place, but it makes so much sense that it's worth including here.

Some additional thoughts follow. Here is what I received:

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There recently was an article in the St. Petersburg , Fl. Times. The Business Section asked readers for ideas on: "How Would You Fix the Economy?" I think this guy nailed it!

Dear Mr. President,

Please find below my suggestion for fixing America 's economy. Instead of giving billions of dollars to companies that will squander the money on lavish parties and unearned bonuses, use the following plan.

You can call it the "Patriotic Retirement Plan":

There are about 40 million people over 50 in the work force. Pay them $1 million apiece severance for early retirement with the following stipulations:

1) They MUST retire. Forty million job openings - Unemployment fixed.

2) They MUST buy a new AMERICAN Car. Forty million cars ordered - Auto Industry fixed.

3) They MUST either buy a house or pay off their mortgage - Housing Crisis fixed.

It can't get any easier than that!!

P.S. If more money is needed, have all members in Congress pay their taxes..

Mr. President, while you're at it, make Congress retire on Social Security and Medicare. I'll bet both programs would be fixed pronto!

If you think this would work, please forward to everyone you know.

If not, please disregard.
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Back to me now. I'm sure you join me in thinking "Great idea! But it will never happen". So for my contribution to this I'd like to suggest what needs to be done to actually get this to happen.

Take a few million more and pay 6 or 7 figure bonuses to the active politicians who make this happen within their area of service. Since money seems to be what motivates them, that part could happen with the right incentives.

Put the IRS to work on determining who is eligible for this plan. After all, they have all of the financial information on all of us that pay our taxes. It would keep government workers and take them away from auditing people and going for blood for at least a few months.

Meanwhile, this gives me another idea. Someone should track down the guy who wrote this, and then get each of the 40 million people over the age of 50 who are now working to contribute just $1 each toward his political campaign for a prominent office. If only the politicians would think anywhere near this, but that's a different topic.

Friday, February 4, 2011

Coupons Are Not Always Helpful

When it comes to grocery and home supply items (paper towels, napkins, etc.), The Frustrated Consumer is actually not as bullish on coupon usage as you would expect. My secret is to let coupons assist with a purchase rather than drive it under most circumstances.

Everyone has some degree of brand loyalty. It may be the detergent that always comes through for you, specific brand and category of food, etc. This is when coupon watching is of most value to you, when you plan on purchasing that product regardless.

For any and all products that you purchase based on best value, I find that coupons should be nothing more than a consideration rather than an “automatic” when it comes to purchase time. From tracking coupons for items and products I regularly purchase (not limited to specific brand names), I have noticed over the past couple of years that manufacturers’ coupons are becoming more about marketing and less about saving money for us. The “50 cents off” on a specific brand might be for a more expensive version and/or larger quantity than you would normally purchase.

One important step, if you are not already doing so, is to track prices for what you purchase, especially during the shopping visits when you are not planning to buy them. Get to know what the store(s) you frequent sells them for so that you can spot a true sale. It gets interesting when you find an item you buy for $2.99 on “sale” for $2.95 with the “regular price” suddenly shown as $3.25 to make it look like you are saving 30 cents when in fact it would save you 4 cents. On the other hand, if that item really was 30 cents off and you could get it for $2.69, then you should make the purchase even if not on your schedule. If a coupon is involved, be especially aware of this “regular price” practice that some stores use. Do not “think” you are getting a better deal, know it!

I’ll use dry cereal as an example. There are a few brands I especially like, made by different companies. Aside from sale pricing, I know that one store sells one brand for at least 30 cents per box less than the store “across the street”, but the opposite occurs for another brand I like. Of course, I watch coupons and for store sales. But I realize that a 25 cents off coupon at the one store would still result in a 5 cents per box higher cost than I regularly get at the first store.

There have been many times when I have not used a 50 cents off coupon for a brand of cereal that I like because it still does not bring more value than my “regular” price for another brand. The other factor I monitor for cereal is the “cost per ounce”, which is usually found at the bottom of the price tag on the grocery store shelves. You might think the Rice Krispies box is less expensive than the Special K box on the shelf below, but a check of the “cost per ounce” tells a different story.

Ideally, you should have a pocket calculator with you (or perhaps your phone has one you can use) to determine whether or not a revised “cost per ounce” when you factor in a coupon will make a difference. Sometimes it will, but there are times when even a coupon does not make a brand a better value at the time.

Lately, it seems as though many manufacturers are issuing coupons on more expensive lines of a product. That’s where they get you, rather than help you. More expensive lines do not always mean larger. Detergent is a perfect example of this. Suppose a 50 oz. bottle is regularly priced at $10 ($9.99, but let’s use round numbers), and the 100 oz. bottle is $17. The manufacturer issues a $1 off coupon, but only for the 50 oz. size. A good deal? Actually, no.

This coupon knocks the 50 oz. price down from $10 to $9. So if you purchased 2 of them (and the coupons usually allow you to purchase up to 4), your $2 “savings” via the coupon gets you a total of 100 ounces of detergent for $18. Yet, if you KNOW that the 100 oz. size still costs $17, you “save” $1 by NOT using the coupon instead of $3 by purchasing the larger size. Plus, the additional $1 takes a few more cents out of your pocket to hand over to the government for additional sales tax.

And that is if the retailer hasn’t raised the 50 oz. “regular” price to $10.50 for the duration of the coupon period to catch consumers unaware. The crucial strategy is to know to only use a coupon when you know it really saves you money when compared to the “real” regular price and to the cost of the product from other manufacturers (unless it is a brand loyalty purchase).

The next key to successful grocery and related item shopping is quantity buys. Know how much room you have in your cabinets, pantry, storage areas, and with any luck additional refrigerator or freezer space. In many instances, you can save significantly by purchasing a 3-pack or 5-pack of an item, or a 24 pack of toilet paper for example. Other than dairy products or other food products for which the “use by” date is critical, be ready to stock up based on price moreso than need.

It always helps to monitor items you purchase occasionally when visiting different stores, in order to be ready to buy when the best deal is there for the taking. Often I will go down aisles which carry items I use, even when not planning a purchase, to scout for price changes and a true good deal. When I find one, I save money. When I don’t, it doesn’t cost me a thing while keeping me up to date on where to find the current best price in case I absolutely need to buy the particular item.

I like to think I save the time back from checking the aisles by the way I often do my shopping list. I’ll keep coupons I might actually use in my pocket. On my list, I’ll note that I have “50 cents off Brand X detergent 50 oz. size” so I’ll know to check that price against the others.

It also helps to check the flyer for the store(s) you shop at on a regular basis before going in. Sometimes check the stores you don’t go to. If you find enough truly good deals, it can be worth going to two or more stores to complete your weekly shopping.

Keep in mind that it is how much you save, and not how many or few coupons you use. Even if these practices help you to really save only $10 per week, that would be $520 saved over the course of the year on grocery and related items. For a family of four, you will find the true “savings” will come to a lot more than that.