You think you're being responsible -- you clip coupons out of the Sunday newspaper and use them regularly at your local Albertson's (NYSE:ABS) or Safeway (NYSE:SWY). You may have read articles such as "Want to Be a Millionaire?" that stress how frugal most millionaires are. The people at Visa surveyed Americans and found that 72% of Americans earning more than $125,000 per year use coupons vs. 65% of the population at large. It sure seems sensible to use coupons -- how can they not save you money when they give you 50 cents off this and 75 cents off that?
There's a problem, though. Check out this snippet from a Money magazine article: "Tests of a new supermarket scanning gizmo in Syracuse, N.Y. last fall showed that people who used coupons spent 8% more than folks who didn't. This follows a 2002 study co-sponsored by Washington University in St. Louis that found that shoppers spent an extra $8 on unplanned and luxury items for every $1 coupon they used."
This is a big deal. You may be saving $4 on your grocery store trip thanks to coupons, but if you spend 8% more on a $75 shopping trip, that comes to $6 and you've lost a net $2. Why is this happening? Well, perhaps it's all psychology. When using coupons, we may feel so responsible and financially prudent that we allow ourselves an extra splurge or two, not realizing that our splurges are outweighing our savings. Alternatively, we may be using the coupons to buy things we otherwise wouldn't buy -- at least not at that time or in that quantity. Maybe we would have had inexpensive pasta for dinner, but instead spent $10 on a steak, saving a few bucks on it via a coupon.
The solution here is not to stop using coupons. They do represent free money. Just be sure to use them on things you would be buying anyway. And rein in those splurges, too.
You'll find lots of money-saving tips on our Living Below Your Means discussion board -- drop in to see what folks are saying. Be sure to check out the board's incredibly well organized long list of tips.
Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.
