One of the complaints I have about about couponing and money-saving hacks involves the tendency to count the savings before the consumer actually sees them.

For example: Have you heard of a couponer claiming she “made money” on a shopping deal?

It’s rare that a store will give what is called “overage” at the initial transaction. In the case where a jar of peanut butter cost less than the coupon was worth, the supermarket gave the peanut butter to me free but I was not given the difference in the value of the coupon as cash back. The clerk even wrote the actual retail price on the coupon.

What “making money” usually means in couponing is that the shopper earned a coupon or rebate with that purchase that she can use on a future visit.

Sometimes the promotion she earned is worth more than the up front cost, especially when she used coupons or sales in the first place.

The problem is: the shopper hasn’t seen those savings yet. And it’s a fact that many such offers never actually become savings, given the short expiration date on promotions and the fact people tend to forget to bring back the coupons or submit the rebate codes.

That’s why I count my savings only after they are “spent.”

Here’s another scenario: it is common for personal finance writers to create checklists that add up a number of cost-saving steps in which someone could save thousands of dollars.

The last time I linked up such a piece, one of my readers pointed out most of those “expenses” were items that weren’t in her family’s budget in the first place. Awesome answer!

To be fair, I do have a list of money-saving hacks organized by household budget category in my Downsized Budget series. But I didn’t attempt to put a dollar value on those ideas.

What I did instead is instead is include a discussion There’s no quick fix for a downsized income in the introduction.

And here’s that lesson:

Many of money-saving tips that work best for working class and middle-class families require an investment of time and / or money in order to notice the savings later.

It will take a month or two to notice the cash flow improving from:

  • Smaller grocery bills from using grocery store coupons, drugstore rebates or the groceries-by-the-box food purchase programs.
  • Dropping the restaurant lunches, coffee shop treats, vending machine candy bars or lottery tickets from your daily routine.
  • Changing your cable / phone / wireless / Internet to a less expensive service or bundle.
  • Using less gas because you are driving out of town less often.

It could take several months to a year before you notice the cash flow improving from:

  • A lower electric bill settling in from installation of CFL bulbs, or more efficient appliances, or unplugging charger cords, or constantly telling the kids to “turn off the lights!”.
  • Lower property taxes or lower homeowners insurance bill to be reflected on your mortgage payment.
  • Less money spent on clothing because you’re acquiring some items second-hand rather than automatically buying everything retail.
  • Smaller grocery bills because you started a backyard garden.
  • Smaller amounts spent on cleaning supplies because you went to cheaper / eco-friendly methods.
  • Less money spent on bank and financing fees because you’ve stopped the cycle of late fees, use of overdraft protection, bounced checks, using ATMs that are not in your network, payday lending services, using high-interest credit cards instead of paying cash or a lower-fee credit account.
  • Less money spent on rent or mortgage because you moved to a lower-cost location or a smaller home. (Keep in mind there are usually overlapping housing and utility bills during a move.)

It could take a year or two before you notice:

  • Less money spent on Christmas gifts and birthday gifts by keeping both your gift list and your budget per person within reason.
  • Less money spent on hosting birthday parties, tailgate parties and other social events.
  • Less money spent on family vacations. (Sometimes there are upfront expenses to downsizing this cost in the long run, such as in the case of purchasing basic camping equipment.)
  • Better cash flow by planning ahead for unscheduled expenses such as new tires for the vehicle and scheduled expenses such as the graduation party.

The sooner you join the frugal living club, the longer your money will last.

Or you could spin it this way, the sooner you join the frugal living club, the faster your savings will actually be noticed.

This piece is my contribution to 2013 America Saves Week, which is Feb. 25-March 2. Follow the conversation on Twitter at #ASW2013


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