Couponing 101: Set a Budget + Goals

In my opinion, setting a budget and having goals is THE MOST IMPORTANT part of couponing.  What's the point of saving money if you're going to waste your savings?

I can't tell you how much you should spend on groceries, etc. each month.  But I can offer you two pieces of advice that has helped us dramatically and increased my savings percentage.

Make an honest budget.  When I first started using coupons regularly we didn't have a budget--I just bought what was a good deal.  I wound up spending more money chasing deals than I did before I used coupons.  While I was getting three times more stuff than I was before, it was still more than we needed to spend.  My hubby and I sat down and made a budget based on what we were actually spending each month combined with our financial goals and the reality of our income.  We had to make some difficult decisions and be brutally honest with ourselves about our spending habits and commit to changing them.

For our family of four I try to spend less than $50/week on everything:  food, diapers, toilet paper as well as any incidental expenses that come up like a new water filter for our fridge or the oil for an oil change in our cars.  I really do mean everything.  This is not a reasonable goal for everyone and for many you may be able to afford more (and that's okay!).  The more important point is whatever your budget is:  stick to it!  When the money is gone, it's gone.  This really helped me to plan my shopping trips better and made my savings percentages increase.

Switch to cash only.  By switching to cash for everything except bills and gas for our cars and being faithful to only use cash we cut our spending by another 25% each month.  Again, when the money is gone it's gone.  This has encouraged me to plan my shopping trips better and decide what deals are necessary this week and what I can skip.  It has also cut down on impulse and unnecessary purchases.

What should you do with your savings?  Ideally, I'd like to take what's written on the bottom of my receipt where it says "this is what you saved" and use that money for some of our financial goals.  For example, if I saved $75 I would take $75 out of my checking account and put it in a savings account designated for whatever:  kids college, retirement, vacation, etc.  I know others who budget a set amount each week for groceries etc. and then whatever is left over at the end of the week goes into their fund.

However you'd like to do it is up to you, but there really is no point in saving money on groceries if you just use that money wastefully on something else.