Clipping, cutting and scanning: how to use coupons effectively

Coupons can be a clipping hassle, but if you start small and use them to get deals on your regular personal care and grocery items, your budget will benefit.

To her online following of 16,000 fans on Twitter and 38,000 on Pinterest, Tracie Fobes is the “Penny Pinchin’ Mom,” a wife, mother and coupon-clipping blogger.

She gives discount seekers advice on how to buy what they need for less — and she speaks from experience. Like many Americans, Fobes once found herself burdened by debt.

Several years ago, on a casual night out with friends at a Mexican restaurant, Fobes started talking about finances and became inspired to overhaul her budget. She and her husband got serious about saving from that point forward. They used a combination of techniques to eliminate their more than $35,000 in debt, including selling off unwanted possessions, creating a realistic spending plan and using tax refunds to pay down what they owed.

These contributed heavily to their savings, but Fobes also changed her mindset toward money. A key to this new shopping mentality was using coupons, which freed up money that she could use to pay down her debt.

“I’d always tried using coupons, but they didn’t really work for me,” Fobes says. “I just felt like it was more hassle. But I knew they had to work, so I started researching and reading and trying to put systems together.”

She put in the time to pore over coupons, comparing what was offered with the brands she typically used. She started studying retailers to get familiar with their pricing, their store brands and their discount programs.

Eventually, she says, “I started making it work and realized we started saving 30 to 35% on our grocery bill every time we were going to the store.”

A snippet about coupons

Grocery stores aren’t the only places that have coupons. The small money-off squares that people once only clipped by hand out of the Sunday newspaper are now available online, in apps and all over social media as well.

Coupons were created in 1887 as a marketing device for soda giant Coca-Cola, according to Coupon Sherpa. Now, coupons are prolific.

Digital marketing research firm eMarketer estimates there will be 127.5 million digital coupon users in the United States in 2016. And Nielsen reported that 55% of smartphone shoppers used their phone to use a mobile coupon in the fourth quarter of 2015.

Young people may be helping to keep the coupon trend alive. A 2016 report by direct mail media and marketing company Valassis found that 47% of millennials say they increased their use of coupons in the past year. That’s 14 percentage points higher than all respondents and 21 percentage points higher than baby boomers.

“People might have thought there was a stigma years ago with using coupons because you couldn’t afford things or you were overly frugal,” says Jeanette Pavini, a savings expert for Coupons.com. “That’s just not the case. These days, using coupons or other strategies to save money is like the new black. It’s cool.”

Pavini says consumers clipped 1.6 billion coupons on Coupons.com in 2015.

Is clipping better for the consumer or the retailer?

How realistic is it to save thousands with coupons? Remember, Coca-Cola originally began offering coupons as a marketing tactic. Businesses distribute coupons to encourage increased spending on their product or brand. In fact, eMarketer predicts nearly half of U.S. companies with 100 or more employees will distribute mobile coupons by 2017.

“A coupon is a classic price promotion,” says Utpal Dholakia, a marketing professor at Rice University. He uses the example of a peanut butter manufacturer. In general purchase behavior, there are two types of consumers. Some shoppers will be so serious about their taste in peanut butter that they’ll buy only the chunky version from their favorite brand, regardless of price. But other, less loyal consumers will gravitate toward whichever brand is on sale.

That’s where coupons come in. When a manufacturer issues a coupon and drops its product’s price enough to make it appealing, the brand can attract a new segment of shoppers. “The marketer has made the price low enough that other people beyond just that small group of brand-loyal users are buying that peanut butter,” Dholakia explains.

The danger here is obvious: Coupons can tempt you, as the shopper, to buy more or different products than you ordinarily would, simply because you’ve discovered that a deal exists.

For the sake of our example, let’s say you discovered a dollar-off coupon that takes the price of the peanut butter down from $3.50 to $2.50. But with a little research, you could’ve found a brand that was $2 from the start.

“Using more coupons is not necessarily a good thing,” Dholakia says. He endorses their use in only one particular situation: “If you judiciously and selectively use coupons for things that you’re going to buy anyway.”

Rather than finding a coupon and feeling the need to purchase the product in question, take a reverse approach. Look for discounts on things you already know you’ll need to buy. Or, use a coupon to substitute a purchase of a brand you usually buy with a similar, more affordable brand. That’s when coupons can save you.

How to use coupons the right way

Couponing isn’t a one-way ticket out of debt, but there are ways to use coupons to your advantage without falling victim to retailer tactics:

Fit them into your lifestyle. Contrary to popular belief, you don’t necessarily have to buy in bulk to see savings. Incorporate coupons into your ordinary routine.

“It’s such a psychological thing,” Pavini says. “I think people get discouraged. They just feel like they need to rob Peter to pay Paul and live paycheck to paycheck. The reality is, in your monthly budget, there are certain things you really have control over. You might not have control over what your mortgage or your rent is, or your kids’ tuition or child care, but you do have control over what you spend on groceries, personal care items, entertainment and travel.”

Look for them everywhere. You can still find coupons in the Sunday paper, but they’re a lot of other places, too. Start by running a Google search for the retailer’s name plus the word “coupon.” You’ll discover that some websites are dedicated to aggregating deals from all over the internet, and there are even apps, like Shopular, that provide notifications of nearby offers.

Get rewarded for your loyalty. Sometimes, manufacturers will send you free stuff simply for telling them how much you love their product. Fobes said she’s made a list of her favorite brands, then emailed the manufacturers to thank them for their products. In some instances, she’s received coupons in return. It can’t hurt to try.

Develop a process. If you really want to make a dent in your monthly bills, stack discounts. For instance, sign up for a store’s free loyalty program to accumulate rewards points while you shop, and become a member of a cash back website such as Ebates.com or BeFrugal.com to earn extra cash on your purchases. Then combine coupons when applicable. Diligently using all possible reward avenues can be time-consuming, but it’s beneficial when you shop at the same store regularly.

Start small. Some coupons may save you only a small amount, but don’t get discouraged. A dollar here and a dollar there can add up over time. Think of it as a dollar or two less than you’d otherwise have spent. Look at your overall savings in a month or a year instead of in one shopping trip.

“Start small and you will start to see the progression as you learn how to follow your sales cycles, learn how to put coupons with sales, to create your stockpile and find the discounts,” Fobes says. “These little things all start to build on top of one another, kind of like Legos. They kind of click together. As you click them together, your tower gets taller, and as your tower increases, so does your overall savings.”

Courtney Jespersen is a staff writer at NerdWallet, a personal finance website. Email:courtney@nerdwallet.com. Twitter: @courtneynerd.

This article first appeared at NerdWallet.