Cutting Out Coupons

I came to a realization today as I was making my turkey sandwich for lunch. When I was adding the salami (what, you don't put salami on your turkey sandwiches?) I looked at the price tag and started to do some math--see, I bought the store brand over the name brand because it was $1.50/lb. cheaper. (woo-hoo!) Net savings: 40¢.

That's when I started thinking about all the other things that are supposed to save me money but aren't actually worth it.

My wife and I decided a couple weeks ago that it's OK to use credit cards to buy gas again. Yes, there's a higher price (and why that's tolerated, if not illegal, is beyond me--try that in any other retail establishment) but the difference to fill the 10-gallon tank on my Corolla is 60¢ extra on a near $30 purchase.

One of the reasons I like using cards is I get to download the activity into Quicken and keep track of my spending. Having to [remember to] collect all the receipts and enter all the info manually or, worse, having to write down or remember every purchase is something I'm just not going to do. (I'm lazy that way.) To me, it's a nominal fee for the convenience.

Plus, there's a bunch of rewards cards that offer up to 2% cash back on purchases--like gas--which offset some if not all of the cost.

Now, there are research studies which say that people tend to spend more when they use plastic over pulling tangible cash out of their pockets. But I'm not heading out to the mall for back to school clothes, I need gas. Spending this way just requires a little discipline (which I don't have).

This lack of discipline is why I'm only taking cash the next time the wife and I go to Costco. We can't seem to get out of there for under $100. Go in for some food and cleaning supplies, and come out with an XBox, 2 coats, 4 pairs of pants and a new coffee machine. Oh, sure, they were cheap, but until we saw the ridiculously low prices, we weren't in the market for them. You also have to be able to recognize a bargain when you see one. The toilet paper was half the price of the supermarket, but now I need a place to store 72 rolls in a two-bedroom condo. If you're not buying for the football team picnic or stocking your underground bunker, you probably don't need the two 20-lb. vats of peanut butter or mayonnaise.

You need to do a cost-benefit analysis. Figure out the cost per square foot of your home, then figure out if that space is best suited for saving a few bucks on condiments. Also, how much do you make an hour that you'll take the time to clip and organize 25¢ coupons and have it worth your while?

I think it was Gary Marcus in his book Kluge, when talking about failures in reasoning, who points out that most of us would drive across town to save $25 on a $50 toaster, but wouldn't bother to save $25 on a $2500 flat screen TV. We reason (or, rather, fail to) it's about percentages, that 10% isn't enough of a savings for the effort, when really we should be deciding if $25 is enough to drive across town - either it is, or it isn't.

My wife just found a new job; I just lost one. (I didn't really lose it--I still know where it is, I just don't go there anymore.) Finding ways to save money is important to us. We stopped buying organic milk and eggs, which were twice and up to three times more expensive, respectively. But combing through circulars for an hour or two to save 40¢ on substandard cold cuts?