Freebies Archives - Frugaling

4 Ways Coupons Manipulate Spending Habits — Watch Out!

Every Wednesday and Sunday — if you subscribe to a paper — you generally receive a healthy dose of coupons. Everything from soups to toilet paper to deli meats are frequently included in the pile. With open arms, many clippers sift through the mass to find a couple deals.

Some people collect them, place them in binders, and combine coupons with store deals. Websites and shows like The Krazy Coupon Lady and TLC’s Extreme Couponing examine, research, and find incredible coupon-based deals. Everyone seems to love coupons!

You should be concerned.

Coupons are developed by vast marketing and advertising teams for corporations. The advertising industry as a whole is estimated to be in the hundreds of billions, and a significant portion is outlined for couponing. But subtly, clipping those weekly coupons affects the psychological decision making in the supermarket. Here are 4 ways that coupons manipulate your spending habits.

1. Clip, cause cognitive dissonance

Every time you clip a coupon, your mind buys a product. Even though you haven’t gone out and purchased the item, to clip a coupon, it’s a commitment of time and action. This has a direct effect on your wallet.

A powerful psychological effect that can occur when you clip a coupon: cognitive dissonance. If, for instance, you decide to clip a coupon and then later question whether you really need the product, this may lead to dissonance. Essentially, this is a distress associated with spending the effort to clip a coupon that you now might not use. For many people, they’ll use a coupon just because they clipped it — regardless if it’s the cheapest option once they get to the store.

2. Exposure predicts spending

Exposure is the key to purchasing a product. What a simple conclusion, right? Well, stores know that the more face time you have with a product, the more likely you are to buy it. If the exposure begins prior to entering the store, you’re effectively being primed for the future purchase.

With coupons, your eyeball sees the product at home. If you clip it out, you are further intensifying the duration of the exposure. More time in front of you equals more money for the grocer and advertiser. How easy!

3. Is that really any cheaper?

One of the most important reasons that people clip coupons is to save money. Ironically, this may not actually lower your shopping bill. Coupons are not usually offered for generic, store-brand merchandise or fresh produce. Instead, they’re frequently marketing name brand items that already have a built-in premium. This added cost often voids any discount associated with using a coupon.

It’s very important to pay careful attention to the coupon you’ve clipped out. At a store, you need to look for generic items, and then compare them to the name brand item for the coupon. All of this takes a level of vigilance and time that many don’t have or care to have at the grocery store. For both time and money, just buying generic items is normally the best bet.

4. Coupons are getting smarter

Smartphones, apps, and online coupon sites are increasingly digging into your spending habits. Your rewards credit card, frequent shopper card, and web browsing history may be leeching your data to third-party companies. These organizations then will compile and predict what you want. They’re so accurate that Target can tell when you’re pregnant, about to have a child, and/or the ages of your children (read Brandwashed for more on this tactic).

By using these predictive tactics, companies can practically read your mind. If they know all your purchases and habits, coupons can be created that make you look at new, similar products. These choices may cost more over time, but offer a great deal at first. If you like the newer product more, the system has worked and you’re hooked. Now, the money is theirs to reap.

It’s not that coupons are always bad or more expensive than generic brands, but they can sometimes change your spending habits for the worse. Moreover, think about all the time that’s necessary to clip those coupons and find the special savings — this adds up. If you spend your time making more money and buying generic, this could actually be smarter in the long run!

5 Tricks To Save Money At Starbucks (Updated)

By Frugaling 34 Comments

Updated: Unfortunately, Starbucks reduced certain benefits, and is making it more difficult to find these powerful savings. I’ve changed a couple points to reflect the shift.

Starbucks is a favorite scapegoat of budget-minded personal finance gurus. Spending $4-5 on an espresso drink is unfathomable. The basic understanding is that if you spend that much every day or even a few times a week, it adds up. Spend $5 for 120 days (1/3 a year) and you’re looking at a staggering bill of $608. For someone on a strict budget that can really hamper your goals. Few people who are frugaling would argue that they have an extra $608 lying around for coffee.

Today, I’m presenting a slightly different angle. As a student, I’m often away from home for extended hours. I frequently make coffee before I leave, but I like to have a cup in the middle of the day, too. This presents a budget versus energy conundrum: To have the coffee and get my rocket fuel, or save money and feel tired.

Rather than choose one option, I’ve decided to save money at Starbucks and reduce the amount of times I frequent the major coffee chain. When you look at the prices at your local Starbucks, you probably see a variety of high-priced, calorie-packed drinks – all exorbitantly indulgent and painful to your pocketbook. But the way I see it, I immediately take 12-13% off that price – every time.

Photo: shinji_w/flickr

Here are 5 tricks for staying frugal at your favorite coffeehouse:

1. BYOT: Bring Your Own Tumbler ($0.10 discount)

Anytime you bring your own mug or tumbler, Starbucks rewards you with a $0.10 cup discount. Filling up a 16+ ounce tumbler should cost you over $2, but the discount helps keep it under that. I always carry mine around, as it’s far greener than using and throwing away paper cups every day. An added perk of using a tumbler is that it stays warmer for longer and you drink slower.

2. Use, Register Your Starbucks Card (8.33% discount)

This is pretty simple: Get a Starbucks card and register it online. Yes, you’ll sacrifice some privacy and Starbucks will have a rough estimate of every location you could possibly be in (just think how many Starbucks there are in the world). In exchange for this location information, Starbucks rewards you with 8.33% (or more) and free refills on brewed coffees.

Basically, once you register the card and start using it, you’ll collect drink points. For every 12 drinks/food items, I get a free one. When I bring my own tumbler ($0.10 discount) and use that with my Starbucks card, I’m actually receiving an additional 8.33% off the final price in the form of a future reward. The best part is that the reward can be for anything. Once you collect your twelfth bonus drink, you can use it for a venti whateverfrap at $5 or buy a bacon gouda sandwich (like I often do). These both cost more than my traditional morning/afternoon coffee, and effectively cause your total discount per order to be even more than 8.33%!

3. Order The “Short” (cheaper and you still get free refills)

What’s a “short”? Well, it’s an off-the-menu drink size that every Starbucks employee knows about. Instead of the tall size, which is 12 oz, the short is a measly 8 oz. Now, if you’re on-the-go and a regular coffee drinker like me, it’s hard to fathom drinking such a paltry sum (am I right?). But if you’ve got some time on your hands and you’ll be hanging out at Starbucks, it’s by far the best deal.

Order a short coffee with your registered Starbucks card and you’ll pay a face value of about $1.65 (depending on the location). Based on the 10% discount from before, your short, brewed coffee will ring in around $1.49. At that price, you’re likely to beget the myth that Starbucks is a super expensive coffee chain. The best part is that you can still get free refills on these drinks, too! I regularly get a refill, which effectively halves the price per cup at $0.75.

4. Use A Rewards Card To Pay Your Starbucks Card (2% discount)

I’m back to using credit cards after a brief experiment only using cash. When used responsibly, credit cards can maximize your savings for purchases you were already going to complete. When you refill/top off your Starbucks card using a rewards credit card, you still get the bonus points that the credit issuer pays out.

Let’s say I use a rewards credit card to refill my account. By doing so, I get an immediate 2% discount to the Starbucks refill/order. If you follow the previous method, you’re actually going to be paying only $0.73 per cup!

5. Buy Starbucks Coffee At A Grocery Store ($5 per pound)

This is one of the simplest methods to save when you’re out and about and need a coffee fix: Buy a pound of Starbucks coffee at your local market. On the front of every bag of Starbucks coffee nowadays should be a coupon for a free tall coffee. To be honest, Starbucks coffee is hardly ever the most inexpensive, frugal choice at the supermarket, but when you combine free drink deals and maybe a coupon from the Sunday ads, you’re in serious business.

Starbucks regularly offers a $2 off coupon on the purchase of 2 one-pound bags of coffee. Let’s say one pound is $8 – multiply that by 2 and you’ll get $16. Use your coupon and the price gets knocked down to around $14. The two bags will include two tall coffees, as well. That is a value of about $4. Effectively, this brings your grand total for the 2 bags to about $10 after all your savings ($5 a pound).

Unfortunately, the free coffee for a bag of coffee is actively being phased out. Scoop up some of the last bags with the old design, and you’ll still get a free cup!

Best Brokers For Commission-Free ETFs

By Frugaling

New York Stock Exchange NYSE Broker ETFs — *Photo: Wikipedia/Library of Congress*

Little funds, big investments

Despite great strides to make the market more friendly to those with lesser funds, it is frequently stacked against the little player. Before I was in debt, I had a paltry sum money to invest. Wanting to avoid the hassle of reporting tax gains and losses from stock trades, I decided to open a Roth IRA. There was only about $1,000 in my initial deposit.

The commissions from my initial broker made trading cost-prohibitive. Every trade was about 1% of my total account value (~$10). If I wanted to realize gains on one share of a $100 stock, I needed to wait for it to climb 20 points (ten for purchase and ten for sale). With $1,000, it becomes very difficult to invest diversely and smartly. This was a recipe for disaster, until I found commission-free ETFs.

The advantages of commission-free ETFs

For me, as a small player in the market with scarce time for research in individual stocks, it’s important to save money in trading fees and pick more diverse index funds. Mutual funds are great as a diversification strategy, but often require a sizeable sum to start. That’s where commission-free ETFs come into the picture.

In 2008, ETFs became a popular way to purchase managed (someone controls what the index is invested in) funds on the open market with live pricing; unlike mutual funds, which NAV prices update only once a day. They’re easy to trade right on the traditional exchanges, and instantly diversify your portfolio, while giving you the choice in a variety of broad-market sectors.

As the popularity rose, brokers took a keen interest in attracting new customers by offering free trades in certain ETFs. There are serious considerations to make before investing in any of these commission-free ETFs. Despite the diversification, these investments still have sizable risk and still require some research. That being said, commission-free ETFs can be a tremendous way to begin investing, diversifying your holdings, and saving money.

The Top 3 Commission-Free ETF Brokers

1. TD Ameritrade

TD Ameritrade offers 101 options and some of the biggest names are included: iShares, PowerShares, SPDR, and Vanguard. The list is a collection of Morningstar reviewed and recommended ETFs and most of them have small expense ratios (especially Vanguard ETFs). Account minimums and flexible investment options make TD Ameritrade a solid trading platform. Accounts include free CNBC TV, as well.

2. Vanguard

Expense ratios at Vanguard have always been notoriously low. They pride themselves on being affordable and smart for the average investor. This fairness easily makes Vanguard a great option for commission-free ETFs. Their group of about 45 ETFs are all free to trade within a Vanguard account. The only reason this doesn’t rank higher on the broker list is because TD Ameritrade accounts already have access to most of these funds.

**3. E*Trade**

E*Trade is the stalwart of online brokers. They’ve been around since the beginning. This broker offers about 90 commission-free ETFs from DB-X, Global-X, and WisdomTree. The largest concern with E*Trade is that these funds tend to have larger expense ratios. E*Trade offers an incredible mobile trade platform and terrific customer service. Opening a new account is easy to do.

Important considerations before you invest

Despite this great convenience and ease, here are three concerns to watch out for:

Some ETFs are traded sparingly. This liquidity problem may lead to great differences between bid/ask prices, and a trade that isn’t in your favor. Consider the volume traded each day in the ETF you hope to invest in.
Commission-free ETFs aren’t a good way to daytrade, as some companies (i.e., TD Ameritrade and E*Trade) charge an exit fee for ETFs held less than 30 days.
Beware of exploitative expense ratios. ETFs, like any other fund, charge a commission for the privilege of diversification and sometimes active management. These fees may add up over the long-term (See E*Trade as an example).

Have you ever invested in commission-free ETFs? What’s been your experience? Need some help further understanding ETFs? Read this book.

What Are The Best Sites For Freebies?

By Frugaling 22 Comments

My Mom always says, “Nothing in life is free.” In a way, she was correct. Even the laudable Google products – often considered free – are heavily ad-supported. For the price of free, Google’s algorithms decode our behaviors, messages, and actions to better sell others’ products.

The loss of information privacy has led to a data-based growth in marketing. Fair or not, by exchanging personal information with companies, prices decrease – sometimes they become free.

Fortunately, “free” isn’t limited to the digital world. Every couple weeks I receive yet another freebie from a company looking to promote a new food or magazine. Last week, I opened my mailbox to find Rolling Stone and Wired Magazine. Today, I received a six-pack sampler of instant coffee. All three were free.

There are ways…to snag loads of samples, perks, swag, and other promotional goodies at no cost—and with little or no risk (Time).

I’ve been receiving these samples and subscriptions for years now. There’s no magic secret or private list that requires special membership payments. All you have to do is find the right sites and be quick to grab the free offer. I recommend checking out these three sites.

3 Best Sites For Freebies

1. Reddit (r/freebies+efreebies)

Reddit is the “front page of the internet.” It is the catch-all website that has thousands of different categories – subreddits – and topics to choose from. Reddit is the 119th highest trafficked website. Because of this incredible audience and user base, the site is a hub for freebies and ways to save. The crowdsourced nature of Reddit allows regular users to post new content and ideas. The freebies+efreebies is the first place I look for updated offers. This combined subreddit includes both digital and physical freebies. New products are being offered every day – check back regularly.

Link: http://www.reddit.com/r/freebies+efreebies

2. Hey! It’s Free (HIF)

Hey! It’s Free (HIF) prides themselves on deals that require no credit card or donation to acquire. The site has been an active site for freebies for the last 6 six years. Through HIF, I’ve found numerous deals for free magazines: Rolling Stone, ESPN Magazine, and Wired. The quality of these freebies tends to be strong and the effort is minimal.

Link: http://www.heyitsfree.net

3. Hunt 4 Freebies

Similar to HIF, Hunt 4 Freebies writers are scouring the net for freebies. Once they find some good ones, they post them directly to their site. By the time I check out this one, there’s usually quite a bit of overlap. But, sometimes there’s a hidden gem. Yesterday, I applied for a free bottle of lens cleaner and contact case. It wasn’t featured on either of the other two. Using a diverse group of sites helps to make sure you find all the freebies you can.

Link: http://hunt4freebies.com