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Look for money-saving ideas on the Internet and you're sure to hear about the latest and greatest apps like Ibotta, Checkout 51, Coupon Sherpa, etc.
But do these apps really help you save money?
To judge for myself, I downloaded 3 money-saving apps and used them faithfully for one year. After spending an average of $800-850 per month for groceries, toiletries, cleaning products, etc., I have saved a total of $26.50. That's hardly an avalanche of savings and not anywhere near the hundreds of dollars most supporters of these apps claim.
So why didn't I save money with these apps?
First, you need to understand that many of these apps are not the creations of altruistically minded app designers who just sit around all day using their skills to create tools for strangers to earn money. That'd be nice, but it's not the driving force here.
Most money-saving apps are designed to create income for the app designer/owner. Some apps are data collecting so that product developers and manufacturers can better market products. Sounds harmless enough, right? You save money in exchange for your data on purchasing habits. So far, no problem.
Some apps, like Ibotta, are basically advertising agencies and are designed to win a sale, much the same as a commercial on television, billboard or ad in a magazine. In exchange for receiving the coupon, you have to watch a short video or read a blurb about the product. Again, this really isn't a problem. We're surrounded by advertisements every day.
The "money-saving" comes in when the advertising works and you buy the product. However, the first rule of couponing--whether it's paper coupons, digital coupons, rebates, etc.--is that you only save money if you were already going to buy that product.
Buying a product you wouldn't normally buy because you happen to have a coupon for it doesn't save money. It's actually the opposite of saving money because you spent money on a product you wouldn't normally have bought.
This is a simple enough concept, but it's surprisingly easy to forget when faced with the lure of digital money savings!
Now, if you happen to find a coupon for a product you were already going to buy or regularly buy, then you'll actually save money (which is how I earned the $26.50 mentioned earlier).
However, that's not how most consumers operate. Many people will purchase a product with a coupon, assuming it's the better deal because--hey I've got a coupon!
This is the knowledge app designers are using to their advantage and why $600 / year of savings using one of these apps probably wasn't actual savings.
So what are some simple ways to save money?
As mentioned before, I spend $700-800 per month on food, toiletries (including makeup, hair care products, sanitary products, etc. for myself + 2 teenage girls), and cleaning products for my family of 8 (5 of whom are over 13 years old and eat like adults). Here are 4 ways I keep our costs down:
If a sale price makes a different brand cheaper than the one you're accustomed to purchasing (adjusting for any size/weight difference), then try the brand that's on sale.
Same thing with coupons. Using coupons can save money--if it makes a product you normally would have purchased or an equivalent product cheaper. For example, let's say you are accustomed to purchasing a 32 oz container of JIF for $4.50. You have a $1.00 coupon (digital or print) for Skippy, which brings a 32 oz container of Skippy down to $3.99; try the Skippy.
Often, store brands or generics are cheaper than name brands without sacrificing quality. Don't believe me? Here's the definition of brand:
So, consumers are paying for an experience or sometimes a perceived quality difference. Now, I'm not naive enough to believe that every generic is going to be just as high quality as a name brand. There are times when you truly can tell the difference. However, that's not always the case and, according to Consumer Reports, you can save 5 to 60% by purchasing store brands! That makes it worth experimenting to find out which products you can substitute generic.
What's more, there are some store-brand products that are identical to name brands, but with a different label! Check out these 9 Store-Brand Items Made by Name Brands by the Krazy Coupon Lady.
Don't assume that a sale price or coupon yields the best savings. For items that you regularly buy, know your base price (the amount you spend for the brand and size you typically buy).
The best way to do this is with a price journal. Whether it's a physical notebook you keep in your purse, a note-taking app on your phone, or your memory, know your base price and the store where you get this price. Then, when you encounter a "deal"--either a sale, coupon, or different brand--you'll have something to compare it to.
This is especially true for products that you regularly buy or use a lot of. If you're certain that the price beats your base price and it's for a product that your family will use up before the expiration date, this is the time to stock up.
The bottom line: Money-saving apps can save you money, but only if you are a saavy shopper and don't get suckered into a purchase you wouldn't normally have made. However, sometimes there are better ways to save money.
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