Groceries Without the Games

What's the Grocery Game

If you've been to a couple of personal finance blogs you've probably heard of "The Grocery Store Game". If not, here's a story on it over at Get Rich Slowly. The idea is that you combine coupons in such a way that you get most of your groceries and toiletries for very little cost.

It's Hard Work

Frankly, it seems like a lot of work. You have to go through all the store fliers each week, find the best coupon deals, find the manufacturer's coupons that match with the fliers coupons, etc. Oh. Then you have to drive to each of the different grocery stores and get all those deals, figure out what meals you can make with whatever products you may have been able to get for cheap.

As noted in the comments of the story over at GRS, most of the goods are actually toiletries or unhealthy foods. For me, I don't think it's worth the work.

Saving 14.5% On Groceries With (almost) No Work

As you'll see below, I save 14.5% on groceries before coupons even enter in to the equation. The process I use depends on the store having the two programs I use in place, so my process may not work for you.

Of course, playing the grocery game depends on you having the right big-chain stores in your area anyways, so I think this is a viable alternative for many people who could play the grocery store game.

Full Sheet : http://spreadsheets.google.com/pub?key=pFOJsib3bG6Gbi-GWZVFXRA

Here are the factors that let us save 14.5% whenever we get groceries:

• Grocery Gift Cards
  • Our grocery store sells gift cards which give you a 10% bonus. Eg. Buy a $300 gift card, get a $330 gift card. We bought $1200 of cards five weeks ago.


• Buy the Gift Card on your cash-back Credit Card
  • We get 1% on our Credit Card purchases. That's $12 back on our $1200 purchase


• 5% Student Discount Card
  • The grocery store has a special student affiliate card which gives you 5% off your purchase beyond the normal affiliate card price. My wife is still a student, so I don't think this is dishonest in the least.

Affiliate Card Price Caveat

The grocery store we go to doesn't always have the best overall prices, however when using the affiliate card the prices are competitive with other stores in the area. For this reason, I do not include the "mark down" that the affiliate card gives us. That mark down is only present because they mark the prices up for anyone who doesn't have the card.

Downsides

1) Be sure that the grocery store you do this at is one that you like, otherwise you get stuck with $1200+ of gift cards locked up in the one store.

2) It's easier to be spendy if you're spending gift-card money than real money.

3) You have to put down a large chunk of money right at the start. If the 10% bonus is going to be an ongoing thing, we will buy the smallest denomination possible, and leave the rest of the money in our ING account to further stretch our grocery money.

Real Life

Between May 9th and June 16th we bought $306.94 worth of groceries for a cost of $265.08. Considering that we had agreed to increase our grocery spending (we did) and decrease our eating out (we did!) we are about where we expected to be for grocery spending for the month.

Other

I have no idea where the extra $41.86 I saved went. Probably into my ING account...

On Hypermiling and Common Sense

What Is Hypermiling

Hypermiling is a set of techniques which are supposed to increase your fuel efficiency beyond the EPA estimates.

To me it seems like mostly hype around traditionally good driving practices. Eg. Don't accelerate or decelerate quickly, slow when approaching red lights so you don't have to stop, etc.

Some hypermiling proponents recommend dangerous or illegal practices such as drafting, putting the car in neutral on the downhill, or turning off the car at long red lights. These activities are foolishly dangerous or illegal and are part of what turns me off to the hypermiling hype.

The upside to the hypermiling trend is that normal average Joes and Janes are hearing about good driving practices from a fresh angle and some are adopting it. Like say, my wife, for example. Last weekend as we were driving home I noticed that she was making a concerted effort in her driving style. I didn't say anything (critiquing driving skills is asking for trouble), but when we got home she said 'Did you notice I was driving differently?'. Um, yes, that was kind of weird. "I was Hypermiling!", she said.

A few trips later and her efforts are much less concerted, and our MPG has gone up!

The 308 Mile Test Drive

We took a trip this weekend to see my wife's grandpa, who lives 308 miles away (according to Google Maps). Our estimated highway fuel efficiency before the trip was about 32 miles per gallon. On the way to grandpa's, we got 36.5 and on the way back we got 33.5 for an average of 35 miles per gallon. It's downhill overall on the way there, but I think averaging the two makes it fair.

We haven't had enough in-city driving time to recalculate our city MPG, but the higher freeway MPG makes me happy and is saving us money. Ok, so we only saved $6.36 on this trip, but hey, it's a start.

I've updated the MPG calculator to reflect the new highway MPG.

8 Reasons to Keep Your Credit Card

Are Credit Cards Evil?

Credit Cards catch a lot of flack in the personal finance blog world and deservedly so. Many people have fought or are fighting mountains of credit card debt and feel that credit cards are unsafe.

Brack over at Goliath Debt, David Income is one of those people fighting back from debt. He is working on paying off "$68,000 in credit card debt, student loans, and a car loans". He recently asked if he should Cancel the Card? Or Be Prudent?.

Despite the risks of credit card use I still think they are a great too. I can't imagine having to carry cash or a checkbook everywhere so I am going to assume that the decision is between Credit Cards and Debit Cards. I think that keeping a Credit Card and being prudent with it is the best choice.

Eight Reasons To Use a Credit Card

Liability

The most you can be liable for a stolen credit card is $50 (if you report it correctly). With a debit card the limit is your bank account balance (plus overdraft!). See http://www.ftc.gov/bcp/conline/pubs/credit/atmcard.shtm

Built in Overdraft Protection

You have $50 left in your bank account and you're getting paid tomorrow. You buy $100 at the grocery store. With a credit card, there's no problem. With a debit card you will very likely have an overdraft charge.

This is assuming that you don't blow your credit limit of course. That kind of use wouldn't be prudent though.

Self control

As you use your CC wisely, you will improve your overall self control. This will benefit you in your financial life and in other areas of your life.

Earn Interest

It's seems silly to me to keep hundreds or thousands of dollars in your checking account when it could be earning money in a high-yield savings account or a money market account.

I put my paycheck into an ING savings account earning 3% APY. I pay off the credit card a few days before it's due. That gives me 25 or so days a month to have $1000 or more extra dollars in my savings account making me money. If that money was in my checking account, I'd make zilch.

Rewards

As I posted a few days ago, I am currently getting 1% cash back with my credit card. I'm not aware of any debit card that offers rewards, but if you are, please tell me!

Credit Score

If you have large loans in your immediate future, you probably want everything in your favor for a lower rate. If keeping even an unused no-annual fee credit card open will keep my credit score higher and make it easier to get a lower interest rate on my mortgage, you can bet I'm going to do it.

Benefits

Some Credit Cards offer benefits like car rental insurance. This can save you money if you use these services anyways.

Emergencies

If you do have an emergency, you will have the Credit Card to fall back on. No, it's not idea and yes you should use your emergency fund first, but debt is better than homelessness, missing meds, or other urgent situations.

Prudence is a Virtue

Essentially what you need to do is treat your Credit Card like a Debit Card. You can even write DEBIT on it with a sharpie if it will help you be responsible.

I come from a town where hunting is quite popular, but there's still a lot of controversy over guns. It seems that feelings among personal finance bloggers are similar, and I take the same position I do on guns:

They are useful tools if you use them right. If you use them incorrectly they are incredibly dangerous. If you or someone in your home can't use them safely, get them out. If everyone who will be using them can be safe with them, then by all means keep them around.

Driving Adds Up

Driving Cost Estimates

Blah blah blah price of gas blah blah blah. You already've heard all that.

On the Road Again

Our Chevy 2007 Malibu gets roughly 24 MPG city, 30 MPG freeway. Given the cost of gas, the miles per gallon and a couple of quick lookups on Google Maps, I now know how much it's costing us to go places. Like, say, $0.48 to visit the inlaws ($0.24 each way).

I kept separate columns for City and Freeway miles, and we just have to think for ourselves which trip belongs where.

Run the Numbers

This is a stupidly simple spreadsheet, but you might as well see how much you're paying for yourself.

1. Download it as ODS, XLS


2. Enter your MPG and local price per gallon. Get your MPG estimate at http://www.mpgbuddy.com/ if you don't know it


3. Use the dollars per trip to estimate the value of using public transportation, ride sharing, getting a new car, quitting work (just kidding), etc.

View the whole thing online

Next Steps

I have no idea how many times we drive different places. We should start tracking that so we can see if we can cut out trips to the inlaws ($0.48!), to the grocery store ($0.12!), etc.

This week I will also be checking our tire's air pressure and getting those pumped up correctly. We are also working to drive more smoothly to improve our mileage.

Scooter Love?

Lots of people are getting scooters thinking that they're going to save a ton of money. At least for us, this wouldn't have been the case if we'd bought the scooter ourselves. My scooter is a 2006 Honda Helix which was $5,000 new. Since I only drive it in the city, the money saved per mile is $0.07. At that rate, I'll need to incur no other expenses for the scooter (oil, tires, insurance, etc.) and drive 71428.57 miles.

That's not going to happen, and so I don't think I can recommend getting a scooter (at least at this price) in addition to a car.

If we hadn't been given the scooter we would have needed a second car eventually. In the case of buying a scooter instead of a second car, it can make sense.

Don't forget to get a helmet.

Warily Eyeing Credit Card Reward Programs

Are Credit Card Rewards Programs Worth The Trouble?

Currently we have two credit cards. One we've had since we got married, almost five years ago. The other we got when we switched to the credit union.

The old Visa card is through a large national bank, and is pretty crummy. 24% interest, no rewards. The only reason we haven't closed it is that it's the oldest piece of our credit history. We'll keep it around until our mortgage is secured, then we'll close our account with that bank.

The newer card gets 1% cash back at the end of the year. It's convenient that we can just transfer money from our savings or checking to the credit card account, all in one spot.

Our Spending Habits

Neither of us likes carrying cash. I hate having things in my pockets, and she loses stuff in her purse. As a result, we use our credit card everywhere we can, our debit card where that doesn't work, checks where debit cards aren't accepted and cash as a last resort.

We always pay of the entire balance each month.

Current Rewards Program

I guesstimate that this year we've been spending about $2,200 on our credit card each month. If 1% cash back works the way I'm assuming it does, that means we'll get $264 back at the end of the year (.01*$2200*12).

Other Reward Options

Thinking that I'll get $264 back and knowing my average monthly spending means that I can now start comparing other credit card offers and maximize my rewards. Some cards appear to offer really good deals with reasonable APRs and no annual fees.

Let's pretend for a minute that I really did get 5% back on all purchases (there are a couple of exceptions). Spending the same amount each month would then get me $1320 cash back. (0.05*2200*12).

Is this really how it works? If I use the card responsibly (paid off in full each month!) do I really stand to gain that much in cash back? Does anyone have experience with any of these types of cards?

Other Factors

Our credit union is local. We will be closing our accounts when we move in January. Since we don't like our other credit card or the bank it's through, we'll need to get a new credit card anyways.

The cards I listed all require having 'Excellent' credit. My credit score according to Credit Karma is 811. My wife's is similarly high. That along with a car loan in our name and regularly paid cell phone bills I think might put us in the 'Excellent' category.

I'm not fan of credit card hopping. I don't want to switch or open cards every year in response to good deals, so I don't care much about the introductory bonuses or APY; I want to find the card that will be best in the long run.

I've heard Dave Ramsey's and JD's calls to get rid of credit cards, but that's not how we live. We have both been pretty financially reasonable, even before we had a budget. We treat credit cards like we would guns: useful but dangerous tools that need to be treated with respect.


I'd love to hear other's advice and experience with these or similar cards.