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Apr 15

Can couponing alone help make you frugal?

saving and spending

saving and spending (Photo credit: 401(K) 2013)

Any couponer will be quick to say “I saved xx dollars today”, but it is what do we do with that money that is important. It is not truly saving if we don’t save it, right? ūüėČ If we fritter it away going out to eat, buying shoes and purses, or other things, that is defeating the purpose, is it not?

Have you considered taking the money you save and setting up a savings account? A savings account is a deposit account where you deposit money, but cannot withdraw it by writing a check. You also receive a benefit from the money you are keeping in the account, which is called interest. Interest is money the bank pays you to keep the money in the account, while giving them the use of it. Interest is sometimes¬†compounded daily, but paid monthly, which means you are getting paid interest on the interest! If you are like me, I thought the bank just kept my money there, the same money I put in, but the bank uses your money to loan to other customers. Don’t let that worry you,¬†because your money is insured through the FDIC (Federal¬†Deposit¬†Insurance Corporation) up to a certain amount.

Using a simple savings calculator, I was able to come up with the following scenario: Imagine if you went to the grocery store, and took the money you saved that month, by using coupons, and brought it to the bank. If you deposited $100 that month and continued to deposit $100 every month for 10 years, not too hard for us couponers, right? Do you know what you would have in your savings account after that 10 years? At an interest rate of .01%, (compounded monthly) you would have $12,106.05!!!

I think coupon use teaches us to be frugal, but we shouldn’t stop there. It is what we do with the savings that will benefit us for the rest of our lives.

Disclaimer: Couponing with Integrity was compensated for this post, but we would not endorse products, services or ideas if we did not feel they would benefit our readers.

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