Can you remember a time in your life when you lived paycheck to paycheck without a budget? Could you afford to spend more to stock up on canned tomatoes at $1 per can instead of buying just the one can you need at $1.79? Could you afford the warehouse club's megapack of diapers, or did you just grab a high-priced small pack when you ran out? Could you actually trust yourself to pay a credit card on time to earn cash-back rewards without incurring debt, late fees and interest charges?
I was not surprised by recent data compiled from Coupons.org that said households with incomes of $100,000 or more are twice as likely to coupon as those who earn less than $35,000. And a 1997 U.S. Department of Agriculture economic report, "Do the Poor Pay More for Food?" found that the cash-strapped do pay 1 percent more than the national average for food. This report has not been updated and found that suburban supermarkets typically have the lowest food prices and widest selection, but lower income families tend to live in central cities and rural areas where prices are higher and selection is slimmer.
"Those who can take advantage of coupons, deals and rewards are paying less at the grocery store, the drug store and the department stores over time," says CouponMom.com's Stephanie Nelson. I have found this to be true: At one time, I couldn't afford to buy those several $50 gas cards, each with a $25 qualifying grocery purchase, to save $10 on each gas card, which was a special deal I took advantage of at Publix last week. The more I could afford to save money, the more I saved on my monthly expenses.
John Ulzheimer, president of SmartCredit.com, adds, "Families that do not plan properly for their monthly expenses often pay late and incur multiple late fees, so they pay more than people who can afford to pay their bills on time, and the problem compounds over time."
In a report from North Dakota State University and U.S. Department of Agriculture, "How Much Should We Spend?" report author Debra Pankow, family economics specialist, says, "You may find that you are spending 100 percent of your take-home pay before you are completely down the list. That means nothing is left for the rest of the categories, for emergency or other types of savings. This is a warning signal for you to take a serious look at your money situation." She advises keeping track of all expenses for a month, and then having a family discussion on how to cut back in each category and how to add income to the family.
Savings experts say that no amount of money is too small to save.
Have you ever sweated buying diapers or paying bills on time?