The best way to accumulate wealth over time is to pay yourself first, and to put your savings in some sort of tax-deferred retirement plan (like a 401K, a Keogh account, or an IRA). Because you make contributions on a pre-tax basis, you are saving and investing money that you would have otherwise paid the government. The earlier you start saving, the more time your money has to grow with the magic of compound interest.
Owning your own home is also a good example of paying yourself first. Monthly mortgage payments help accumulate equity. Mortgage interest also qualifies as a tax deduction so that you can save and invest money you would have paid the government if you rented your home.
The challenge, of course, is figuring out how to squeeze an extra 10% out of your paycheck each month to pay yourself first. That’s where coupons come in! If you know where to find coupons for the goods and services you buy regularly, coupons are actually free money. The key is to know where to find them and how to use them. My favorite examples of easy coupon savings are:
- Grocery coupons: As the third highest expense in the average household’s budget, grocery spending offers the most potential savings. By combining sales with coupons, it is possible for many households to cut their grocery bills in half. Over $318 billion worth of grocery coupons are distributed each year, and 99% of those coupons are thrown away. I believe that is because they are tedious and time-consuming to use. However, the Virtual Coupon Organizer and the Best Deals lists on www.couponmom.com help take the work out of using coupons so that shoppers can easily save with this free money.
- Restaurant coupons: About 40% of the average household’s food spending is spent outside the home. Fortunately, there are many great sources for coupons and deals at restaurants. Find restaurant coupons at:
- Entertainment books are coupon books available for specific cities, and sell for about $25-$35 per book. There are many “buy one, get one free entrée” coupons as well as generous $10-$20 coupons for many restaurants. There are also many coupons for casual and fast food restaurants. Books come out in September and do not expire until 14 months later, on November 1st of the following year. Over the course of the year, the price of the books goes down. By June, the books can sell for as little as $9.99 per book (with a full five months left before the coupons expire).
- You can print discounted gift certificates for many restaurants at Restaurant.com. You can purchase $25 gift certificates for only $10 at a variety of restaurants. If you have a coupon code, you will pay only $5 per $25 certificate.
- Print free coupons for some restaurants at sites like valpak.com and hotcoupons.com.
- Coupon codes for online shopping: If you shop online on a regular basis, become familiar with a few coupon code sites to take advantage of easy savings. Coupon codes are simply codes that you enter in the promotional code box on the checkout page of your online retailer. You will not find these codes on the retailer’s page. You can get them for your retailers by signing up for their email newsletters, or by checking a coupon code site to find one.
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