Tuesday, September 25, 2012

Why you are paying so much at the pump


Breakdown of Gas Prices

When you pump $30 into your tank, that money is broken up into little pieces that get distributed among several entities. Gas is just like any other consumer product: There's a supply chain and several groups who are responsible for setting the price of the product. The media can sometimes lead you to believe that the price of gas is based solely on the price of crude oil, but there are actually many factors that determine what you pay at the pump. No matter how expensive gas becomes, all of these entities have to get their slice of the pie. According to the U.S. Department of Energy, here's an approximation of where each dollar you spend on gas goes:

  • Taxes: 13 cents
  • Distribution and Marketing: 8 cents
  • Refining: 14 cents
  • Crude oil: 65 cents
[source: DOE]
This is what the average breakdown looked like in April 2011. Let's look at those components in more detail.
  • Crude oil - The biggest portion of the cost of gas goes to the crude-oil suppliers. This is determined by the world's oil-exporting nations, particularly the Organization of the Petroleum Exporting Countries (OPEC), which you will learn more about in the next section. The amount of crude oil these countries produce determines the price of a barrel of oil. Crude-oil prices averaged around $35 per barrel (1 barrel = 42 gallons or 158.99 L) in 2004. And, after Hurricane Katrina, some prices were almost double that. In April 2008, crude-oil prices averaged around $104.74 per barrel. During that month, the price of oil reached a record price of almost $120 a barrel [source: DOE]. By May 16, prices had topped $117 per barrel [source: MarketWatch]. On May 22, markets in New York and London reported prices past $135 per barreland, and on July 11, oil hit an all-time high of $147 [source: Forbes, New York Sun]. Analysts speculated that everything from investment in oil futures to increasing demand from countries like India and China contributed to the spike in price.
    Sometimes, gas prices go up even though there is plenty of crude oil on the market. It depends on what kind of oil it is. Oil can be classified as heavy or light, and as sweet or sour (no one actually tastes the oil, that's just what they call it). Light, sweet crude is easier and cheaper to refine, but supplies have been running low. There's plenty of heavy, sour crude available in the world, but refineries, particularly those in the U.S., have to undergo costly retooling to handle it.

  • Refining costs - The cost of refining diesel fuel can be considerably higher than the price of refining regular gasoline. To learn more about oil refining, read How Oil Refining Works.
  • Distribution and marketing - Crude oil is transported to refineries, and gasoline is shipped from the refineries to distribution points and then to gas stations. The price of transportation is passed along to the consumer. Marketing the brand of the oil company is also added into the cost of the gasoline you buy.
  • Taxes - Federal and state governments each place excise taxes on gasoline. There may also be some additional taxes, such as applicable state sales taxes, gross receipts taxes, oil inspection fees, underground storage tank fees and other miscellaneous environmental fees. Add that to the state excise taxes, and it can average 27.4 cents. It could be worse. In Europe, gas prices are far higher than in America because taxes on gas are much higher.
  • Station markup - Of course some of the money you spend at the pump does go to the service station. While some consumers blame high prices on station markup, service stations typically add on a few cents per gallon. There's no set standard for how much gas stations add on to the price. Some may add just a couple of cents, while others may add as much as a dime or more. However, some states have markup laws prohibiting stations from charging less than a certain percentage over invoice from the wholesaler. These laws are designed to protect small, individually-owned gas stations from being driven out of business by large chains that can afford to slash prices at select locations.
Average U.S. Gasoline Prices
Price Per Gallon
Source: U.S. Bureau of Labor Statistics Consumer Price Index (CPI). Average Price Data, Gasoline All Types.
Gas prices also vary from state to state for several reasons. Taxes are probably the biggest factor in the different prices around the country. Additionally, competition among local gas stations can drive prices down. Distance from the oil refineries can also affect prices -- stations closer to the Gulf of Mexico, where many oil refineries are located, have lower gas prices due to lower transportation costs. There are also some regional factors that can affect prices.
World events, wars and weather can also raise prices. Anything that affects any part of the process, from the moment the oil is drilled, through refining and distribution to your car will result in a change in price. Military conflicts in parts of the world with lots of oil supplies can make it difficult for oil companies to drill and ship crude oil. Hurricanes have damaged offshore drilling platforms, coastal refineries and shipping ports that receive oil tankers. If a tanker itself is lost or damaged, or leaks its oil into the ocean, that will put a dent in the market as well.

What Causes Gasoline Prices to Fluctuate?

Have you ever wondered who’s at the throttle of the gasoline-price rollercoaster for the past several years?
With the price of gasoline having peaked at more than $4 per gallon in some areas, then falling to less than $2, it’s hard for consumers to understand – not to mention budget for.
The factors that determine the final price of gasoline are far-reaching and global – from local politics in developing nations to a natural disaster in a neighboring state. Other elements come into play as well.

Factors that influence gasoline prices

Supply of crude oil – Most crude oil that’s refined into gasoline is produced and sold by Oil Producing Exporting Countries – or OPEC. This cartel of 12 countries in Africa, the Middle East and South America uses a loose quota system to determine how much oil to produce and sell. One of OPEC’s goals is to stabilize oil prices by eliminating unnecessary fluctuations. However, its decisions about production, pricing and distribution affect the price of international oil – and, consequently, the price of gasoline.
Worldwide demand – The demand for crude oil in China, India and other developing countries has risen with their population, increased trade, growing internal markets and strong commodity prices. In less than five years, it is estimated that developing nations will account for nearly half of the global demand for oil, up from 36 percent in 1996.
Distribution network – Anything that interrupts the flow of petroleum through the distribution network can cause gas prices to rise, such as a natural disaster like Hurricane Katrina or political instability in major oil-producing countries like Venezuela, Iraq and Nigeria.
Value of the U.S. dollar – Oil is traded on the world market is U.S. dollars. When the value of the dollar declines in comparison to other major currencies, OPEC earns less per barrel of oil. To compensate, it may raise the price per barrel, thereby increasing the price of gasoline.
The market – One of the most complicated factors that affect gas prices is the oil trading market – actually, three different markets that all can play a role in the price of gasoline.
  • Contract market – The fate of most oil and gas is predetermined by contracts among oil companies, dealers, refineries and independent dealers.
  • Spot market – This market fills the gaps in the contracts market by matching companies with surplus oil to those that need more. Of the three markets, the spot market is the only one where actual barrels of oil are traded. It’s also where the best deals can be found because buyers and sellers are not bound by contracts. Thus, the laws of the free market are in effect.
  • Futures market – Crude oil is traded on the New York Mercantile Exchange, although contracts are rarely fulfilled. For instance, while more than 5 billion barrels of oil were reportedly traded on the futures market during a seven-year period, only 31,000 were actually delivered. Regardless, the fluctuation in the price of oil per barrel is driven by information that represents the state of the oil market. In most cases, consumer gasoline prices will mimic the trends of the futures market.

Common misconceptions about gasoline prices

Perhaps the biggest misconception about gasoline prices is that gas companies set them. However, since the companies own only about 5% of U.S. stations, their control over the price at the pump is minimal.
Another misconception is that gas stations like gas prices high. Not so. Profit margins at the pump are about 23 cents per gallon, regardless of the price per gallon. In addition, many stations are under contract to sell gas at a predetermined price, which may yield a profit of only a few cents on a dollar. And when gasoline prices increase, station owners feel the pinch because customers spend less on the store’s profitable convenience items.

Monday, September 24, 2012

How to save money couponing


With gas prices rising, high unemployment, and inflation poised to spiral out of control, your talent for cutting household expenses is becoming more and more important. You can slash services like yard landscaping and premium cable channels (e.g. DIRECTV), and you can reduce your utility bills by using electricity, gas, and water more sparingly. But what about everyday necessities like feeding your family and operating your home?

The 4 Levels of Couponing
Level 1: The Casual Couponer
Level 2: The Generic Brand Store Shopper
Level 3: The Coupon Deal Shopper

  1. Don’t buy it if it’s not on sale.
  1. Combine the sale with a coupon.
Level 4: The Extreme Couponer


“Extreme couponing” isn’t as crazy as it may sound. You don’t have to let coupons dominate your life, and you don’t have to be embarrassed at the cash register. You just need to find the right moves to use coupons in conjunction with store sales and promotions, and then enjoy the satisfaction of getting items for free or close to free. It’s about timing, and not necessarily using a particular coupon just because you found it in that week’s Sunday paper. Instead of using it immediately, you’ll hold on to coupons until items go on sale, maximizing your savings and becoming an extreme couponer.

  • Buy 10 Butterball Turkey Bacons on two-for-$5 special: $25.00
  • Use your 10 manufacturer’s coupons: -$20.00
  • Use the $5 off $20 store coupon: -$5.00
  • Your total: FREE
5 Steps for Extreme Couponing
  1. Gathering
  1. Organizing
  1. Grocery Shopping
  1. Resources
  1. Storage and Distribution
Step 1: Gathering
1. Sunday Newspaper
2. Online Printable Coupons

3. Grocery Stores
4. Manufacturers
5. Neighbors
Step 2: Organizing
1. Coupon Binder

  • You’ll have a portable container that you can move from the house to your car and carry into the store. Should you see an unadvertised sale or something on clearance, you can easily check to see if you have a coupon for that item and make an on-the-spot decision to buy or not.
  • You can make a note of which inserts your favorite coupons came from, so you’ll have an easy reference if you want to get more.
  • You can also keep a list of your stores’ coupon policies in the binder.
  • You’ll need to commit to clipping coupons and filing them. It’s going to take a while to get this organized. You’ll need some space to lay out all the coupons and cut them.
  • Expired coupons are harder to find in a binder organized in this manner. Once in a while, you’ll have to go through your binder and remove the expired coupons to make room for new ones. This audit will be a regular time commitment for you.
2. Whole Inserts
  • You can save plenty of time, especially if you date the front of the insert and arrange the pages for easy clipping.
  • These files are easy to maintain, since you can just wait for the whole insert to expire and then toss the whole thing in your recycling bin.
  • You don’t have to take your entire collection of coupons with you to the store – just the ones you clipped specifically for your trip.
  • It will be difficult to make quick decisions at the grocery store when you find an unadvertised sale or a clearance item. You won’t have time at the store to scan through all your inserts and start ripping coupons right there in the aisle.
  • If inserts aren’t the only source of your coupons, then you’ll still be searching for a system to organize other loose coupons that you’ve printed from your computer or picked up in stores.
Step 3: Grocery Shopping
1. Watch the Sales Ads
Dollar-off coupon: -$1.00
My total: $0.39 for two boxes
2. Set Your Limits
Lowest Price Ever: $0.10 a box;
Can frequently get for: $0.20 a box;
Don’t pay over: $0.30 a box.
Lowest Price Ever: FREE;
Can frequently get for: FREE;
Don’t pay over: $0.
3. Check Store Policies

  • Does your store ever double the value of coupons?
  • Do they limit the amounts of the doubled coupons?
  • Do they have a limit on how many coupons they’ll double?
  • How do they treat coupons used with a BOGO sale?
  • Do they have special discounts for seniors, students, or veterans?
  • Do they accept (or even double) competitors’ coupons?
4. Make Mistakes
5. Have Fun
Step 4: Resources
Couponing Websites

Coupon Databases
Tracking Software

  • January: We bought $2088.27 in groceries and toiletries while only paying $474.59, yielding a savings of $1,673.70 (77%).
  • February: We bought $2,369.40 in groceries and toiletries while only paying $402.85, yielding a savings of $1,966.55 (82.99%).
  • March: We bought $3,122.63 in groceries and toiletries while only paying $361.19, yielding a savings of $2,767.44 (88.43%). The percent savings just keep on growing!
Step 5: Storage and Distribution

  • Clear away clutter in your kitchen cabinets. Throw away old small appliances you don’t use anymore. Use this opportunity to downsize your home and clear out old and expired items too.
  • Add shelves in your garage, wall-to-wall if you can fit them and still leave enough room for your vehicle.
  • Invest in a deep freezer. A chest freezer is more cost efficient and holds more than an equivalent-sized upright freezer.
  • Place like items together and keep things near where you’ll use them. Put the extra cereal in your kitchen, dishwasher and hand soap under the sink, and toilet paper in the bathroom closets. Excess – and you will have excess – goes in the garage.
  • Consume and organize your food and drinks by earliest expiration date, so you can avoid throwing things away. Keep expiration dates in mind while shopping, and don’t buy more than you can use before expiration. If you find no way to consume it all, you can always give it away to friends or donate to a charity.
  • Avoid a stockpile so large it doesn’t fit on your shelves. No deal is good enough to let it fill up your living space. You should be able to relax and watch TV without seeing grocery bags full of chips and soup cans.
  • Pick a few areas of your home that are off-limits, and don’t store anything there. Hallways are not storage areas.
  • Don’t be stingy. If you have more items than you can store, share with your family, neighbors, or a local charity.

The average American family spends between $500 and $1,100 every month on groceries, toiletries, cleaning products, pet items, clothes, and simple entertainment costs. You know you can make some sacrifices to get from the high-end of that range to the low-end. But can you really reduce or even eliminate some of these costs without giving up on good nutrition and hygiene? You absolutely can!
I still shake my head in disbelief when I look at what my family has saved in just the first three months of this year.
That’s a total of $1,238.63 that we’ve spent on $7,580.30 worth of name brand groceries, toiletries, and cleaning products. We saved 84% ($6,341.67 in savings) in three months without sacrificing quality using discount grocery coupons.
With the tips outlined in this article, it won’t take extreme time and effort for you to become an extreme couponer too.
Before I get into an awesome step-by-step guide to extreme couponing, let’s first take a look at the different types of couponers and assess which category you currently fit into:
I love snacks, so I recently printed out a coupon for $0.55 off of one Chex Mix 4.5 oz bag from Coupons.com. Now with coupon in hand, I’m ready to go save some money. But how much money I save will now depend on what level of couponing I’m at. Recent experience has shown me that there are essentially 4 levels of couponing that range from casual to extreme. Levels 1 and 2 are well known, but levels 3 and 4 are starting to become more popular. If you haven’t heard of these couponing strategies before, you could be missing out on a whole world of saving.
This is where many people find themselves today. Most of the time, a person will pay for a whole cart full of groceries while handing over less than 10 coupons. They end up normally saving a few bucks off the entire order. In the simple example of the Chex Mix coupon I have, I could walk into a grocery store or drug store and find the Chex Mix for $2.99 and hand them my coupon, allowing me to spend $2.44 after the 55 cents in savings.
Savings: Minimal
Many people also find themselves in this category. They’ve figured out that they could save more money overall if they buy the generic brand over the name brand even if a coupon was used on the name brand. By doing all their shopping solely for generic brands, they can easily save $200-$300 per month without clipping a single coupon. I can save more than $0.55 on my snack run if I throw the coupon out and buy Generic Mix at $1.49 a bag. In this example, the Generic Mix costs me $1.49 and saves me $1.50, a significantly better deal than if I were a Level 1 Couponer.
The problem for me here is that I prefer the name brand over the generic – it just tastes different to me. So are you out of luck if you’re in the same boat as me and prefer name brands? Don’t worry because there are still 2 levels left to go.
Savings: Good
Believe it or not, when the circumstances are just right, people can save even more money buying the name brand stuff than the generic brands. Items frequently go on sale, and when they do, the Coupon Deal Shopper capitalizes on the opportunity. They’ll combine a store sale with a manufacturer’s coupon, and get the item for pennies or even for free.
You know what happens when you align the Sun, the Earth, and the Moon all in a line? You get a solar or lunar eclipse, right? Well, that’s exactly what the Coupon Deal Shopper does. They set up little eclipses all over the place at different stores and walk away with items for pennies on the dollar. So if I wait for a sale, I can save even more money than buying generic.
For example, I happen to know that Walgreens frequently puts Chex Mix on sale for $0.99 approximately once a month. During this sale week, if I walked in there with my $0.55 cent coupon, I’ll pick up the item for $0.44 instead of $2.44 on a $2.99 item. That’s an 85% savings and way better than buying the Generic Mix!
The Coupon Deal Shopper saves 70% to 95% on everything they buy, because they follow two rules:
Saving at this level requires a little bit of effort. You must clip and organize your coupons, and be patient. By spending about 2-3 hours per week, you can save 70-95% on everything you buy at the grocery store and the drug store. Can’t do better than that, right? There’s still one more level to go!
Savings: Awesome
Did you know that you can use a manufacturer’s coupon and a store coupon on the same item? Well, you can. Did you know that you can use two coupons on a buy-one-get-one-free sale? Well, you can.
Setting up bigger and better deals is what the Extreme Couponer does. They take the same measures as the Coupon Deal Shopper but then they look for multiple deals. Why get just one deal when you can get three or four all at once? To this end, it’s not unusual for an Extreme Couponer to have 4 Sunday newspapers delivered to their home. Let me give you an example to explain why:
At my grocery store, Ken’s Steakhouse Ranch Dressing costs $3.29 for a 16 oz bottle. Sometimes it goes on sale for $1.65 per bottle. So what I do is use my four $1.00 off coupons from the Sunday newspapers during the sale, and get four bottles at $0.65 a pop. That’s how I combine two big deals at once and walk away with 80% savings multiple times. If you can get your hands on more coupons, go back in the store and do it again! The idea here is to stockpile your deals and get a lot of each item because it might be another month or so before this item goes on sale again, so buy a month or two’s worth at once.
Lastly, Extreme Couponers make good use of store coupons as well (i.e. the ones that say $5 off a $20 purchase). So you could walk into the store, buy at least $20 worth of great deals like these and take another $5 off the total. This simply makes a sweet deal even sweeter. It’s almost like you’re buying individual items in bulk at prices that are even better than buying in bulk. The ultimate savings scenario is to combine 3 types of coupons: store coupons, manufacturer’s coupons, and store sales all at the same time. Yup, that’s why we call this person The Extreme Couponer.
Now that you know what all the levels are, what level of couponer are you? Is it worth your time to become an Extreme Couponer to save 90-100% on everything you buy? If your answer is a resounding “Yes!”, read on for a step-by-step guide to learn the ins and outs of extreme couponing.

For example, suppose that Butterball Turkey Bacon normally costs $3.29 at your grocery store, and you find a $2 off coupon. If you used your coupon right away, you’d pay $1.29 and leave the store patting yourself on the back and thinking, “Not bad.” But you can do even better!
If you wait for a store to have a sale, you can really win out and find yourself saving much more. Imagine that you held on to the coupon for three weeks, and after the initial rush when everyone else used the coupon, the store is still trying to move more turkey bacon. Now it’s on special, with a two-for-$5 deal. That means the price is only $2.50 each, so you can use your $2 coupon and pay just 50 cents instead, saving $2.79 just by holding out.
That’s tough to beat, but this example can go even further. Suppose that the store issues a general coupon for $5 off a $20 purchase. Sound familiar? If you collected a few extra copies of that original $2 coupon, say ten of them, you could follow this simple math for incredible savings:
You had $25 worth of coupons, but your receipt will show you the truly good news that you saved $32.90, since that’s the full retail value of the bacon you got for free. That’s the kind of thing that extreme couponing families do everyday. They’re not covering the kitchen table with coupons and letting their lives get taken over by newspaper inserts. They’re just using coupons and store deals together to get the best discounts, and they’re walking off with at least 90% in savings.
There’s no magic to it, but extreme couponing does require a bit of patience and some trial and error. Use this step-by-step guide to reduce the “error” part of that equation.
You’re going to need a lot of coupons, but you don’t need to go out of control. The smart move is to get multiple copies of the same coupon, so that if you come across a deal you can maximize your savings. Think of coupons as “currency,” because at the end of the day, you’re going to use them like cash. Acquire as many as you can, using these top sources:
Coupon inserts and local ads are the best places to start. Look for coupon inserts with titles like “Smart Source,” “Red Plum,” and “Proctor & Gamble.” The more copies of a coupon the better, so I recommend investing in at least four copies of the newspaper. This way, when you find your favorite deals, you’ll have four coupons. Alternatively, if you’d rather not scour through multiple Sunday newspapers, you can actually buy coupons (for much less than their savings value) and have them mailed to your house using the site, The Coupon Clippers.

Insider’s Tip: Write the date on the front of the insert, so it’ll be easier to find two or three weeks from now, and you can track down extra copies once you find a good deal.
Just a few years ago, the Internet might not have been worth your time for finding coupons. You had to dig around for far too long to find the right deals in your area. Now, individuals and various websites are curating the best deals available and, better yet, setting up local deals to get in on coupons and big sales. You can get alerts about manufacturer’s coupons and find links to coupons that you’ll just need to click, print, and file. Usually, on sites like Coupons.com, you can only print one or two copies of a coupon, but it’s still worth it.

Insider’s Tip: Don’t print everything you find just because coupons are “free.” Filter yourself and only print what you need to avoid excess clutter and wasted ink and paper.
Have you ever seen those small devices in the aisles that blink and share coupons? Or have you seen a stack of “Tear here” coupons near the entrance of your local market? Take advantage of these in-store sources of coupons, and don’t ignore the store’s free coupon booklets either.
Insider’s Tip: While coupon booklets are often sitting out in plain sight, some stores require you to take some initiative. If you don’t see them near the door, ask at the front desk.
If you write a letter to the manufacturers of your favorite items and tell them how much you like their products, they’ll often send you coupons – and free samples of new stuff that you haven’t tried yet. Today, I received a coupon for one free three-pack of JELL-O Temptations, worth $3.30. All I had to do was write to Kraft and ask.
Insider’s Tip: Don’t let it get you down when some of your letters go unanswered. You’ll have a few duds, but more often than not, companies will respond with higher-value coupons than you find in conventional places.
Even if you pick up four Sunday newspapers, you can get some extra free coupons by building a rapport with your neighbors and asking them for their coupon inserts. Plenty of people buy the paper and then scrap the money-saving inserts. Recycling is great, but it’s even better if you can rescue some deals before they’re carted off.
Insider’s Tip: I’ve heard stories of couponers whose neighbors have agreed to give them their coupon inserts at the door. After a walk up and down the block, they have around ten copies of great coupons they can use.
With all of these resources, you’ll have a wealth of coupons. But where will you keep them without losing track or letting them take over your home (and your life)?

The trick to successful coupon organization is to find a system that you’re comfortable with and will stick to. You need to know which products you have coupons for, and when your coupons expire. You don’t have time for a frustrating, disorganized pile cluttering up your coffee table. Since there are plenty of options available, think about the pros and cons of two popular choices.
In a coupon binder, you’ll use A to Z dividers and baseball card protector sheets. This thick binder will hold individual coupons, sorted by the first letter in the product’s name. You can also use pocket pages for coupons that expire quickly (within a day or two of the day you find them) or coupons that are only valid at a particular store. The coupon binder is simple and handy, but it has a few drawbacks.
Advantages of a Coupon Binder
Disadvantages of a Coupon Binder
If you choose the whole inserts method instead, you’ll file away the coupon inserts in their entirety. You don’t have to clip a single coupon until you’re ready to go shopping. Even then, you’ll clip only the ones you need. You’ll just collate the inserts you have so that identical coupons are all grouped together.
If you have four identical “Smart Source” inserts, for example, arrange the pages so that when you’re ready to clip them, you get all 4 coupons at once. You can use a hanging file folder system in a filing cabinet, portable bins, or a large accordion folder to hold the pages, and you’ll build a coupon database to keep a record of what’s in the file. You’ll save time over clipping and filing, but you’ll give up some advantages too.
Advantages of Inserts
Disadvantages of Inserts
In short, the whole inserts method saves you time, while the coupon binder method puts you in more control at the store. So now that you have your coupons and they are organized, it’s time to plan a shopping trip.
Especially for your first shopping trip as an extreme couponer, I suggest pursuing only one deal. Keep it simple and get comfortable at the register. Once you’re familiar with the process, you can reach for bigger deals and more of them. But for this first target, let it go something like this:
Take a look at your grocery store’s weekly ad to see what’s on sale this week. If you see what looks like a good sale, check to see if you have a coupon for that item. Do the math and determine if the new price is a good enough deal for you. If it is, compile your multiple coupons and get as many items as you can in a single transaction.
Buy-one-get-one (BOGO) deals are great because sometimes you can use a coupon on the free item too. My local grocery store, for example, is running a BOGO deal with Mueller’s Pasta 16-ounce packages priced at $1.39 each. I have a coupon for $1 off two Mueller’s products of 12 ounces or more. Take a look at the math:
Two boxes of pasta on sale/BOGO: $1.39
That means I’m paying under 20 cents per box, for a total savings of 86% off, and I have ten coupons. I’ll get 20 boxes of pasta for $3.90.
If you’re looking to more easily match sale items at your local grocery store with their corresponding coupons, try out a service like Savings Angel. There’s a monthly membership fee involved, but it can help you save a lot of money and time by automatically alerting you of big sales and coupons for the items you want.

When you’re looking for deals like this one, you need to figure out if the final price is worth it to you. I’d take the pasta for 19 cents a box, but at 35 cents a box, I’d wait. Why? Because as you get more familiar with extreme couponing, you’ll see price points that you know you can beat, and others that you know you won’t find ever again. For instance, I’ll never pay for toothpaste, razors, deodorant, body wash, or shampoo ever again because I know I can find coupons to knock the cost down to nothing.
Decide what prices you won’t go over, and if a sale-coupon combo doesn’t get you there, just wait for a better sale. Keep your target prices in a composition notebook and mark the best deals you’ve gotten on common items. Using the pasta and toothpaste again as examples, my entries look like this:
Periodically check your stores’ coupon policies. Every grocery chain is different in how their coupon policy works, so it’s good to stay in the know on these topics:
Often, cashiers are unaware of policy changes, so they might let you use your coupons today, but tomorrow a different cashier may reject them. Some look the other way on expired coupons. Extreme couponers keep a copy of the stores policy to help “educate” misinformed employees. Don’t be rude about policies, but be aware of the rules and make friends with a store manager and some staff members.
Occasionally, you may learn at the register that your coupon plan doesn’t work out the way you expected. It could be that you bought the wrong size, or the coupon won’t scan properly. Remain calm and be polite. Mistakes happen, whether they’re on your shoulders or they’re the store’s fault. If you can’t resolve the issue, tell the cashier to void the item or call the manager. Just remember that you are not obligated to buy the item simply because you took it off the shelf. If the deal does not work out in your favor, do not buy the item at all. You are the customer, and you should never feel guilty about trying to get a good deal.
Saving money shouldn’t be a chore. It’s a game. When you set up deals, go after them, and take home your winnings, you’ll experience some pretty good emotions. Some couponers get a rush of adrenaline at the checkout lane, and others have reported having a “coupon high” afterward. It’s a pretty good feeling when the cashier and the bagger’s jaws drop and they only utter, “Wow!”
So that’s how you set up your first deal and the subsequent deals. Next, take a look at some extra resources to help spur you along the path of extreme couponing greatness.

Plenty of websites are dedicated to helping you save money at the checkout lane. Coupon compilers scour the news and inserts to prepare deals for you before you even get your paper. They’ll tell you what items to get and where, and which coupons you’ll need. In addition to Savings Angel, which I mentioned earlier, some of the great sites dedicated to extreme couponing (that my family uses first-hand) are:
Many sites also maintain coupon databases, which are useful tools, particularly if you use the whole insert method. A database lists coupon publishers, product manufacturers, stores, values, and expiration dates.
For example, if I saw a sale on Pam cooking spray and wanted to know if I had or could find a coupon for it, I’d type the product name in the search box of the coupon database and get an abbreviated response like, “Pam cooking spray, any: 04-03-11 SS. $1/2.” The SS tells me that it’s a “Smart Source” insert, and the publication date is from April 3, 2011. I also know it’s a dollar-off-two coupon, so I can determine if it’s worth cutting out. It all depends on the sale and other combined offers. The coupon database that I personally like to use maintained by Hot Coupon World.
Want to know how much you’re saving over time? Unless you’re a spreadsheet whiz, you’ll need some tracking software. I recommend Coupon Sense, which will notify you of deals in your local zip code – local offers that other websites don’t usually find. It also has tracking software so you can enter your receipts from the stores you shop at most often. At $10 per month, this service really pays for itself. I’m already in awe at how much my family saved during the first quarter of this year:
To summarize, we bought a total of $7,580.30 worth of groceries and toiletries, and only paid $1,238.63, leading to a grand total of $6,341.67 in savings (84%)!
It’s clear that getting great deals and tracking your savings is a lot of fun and motivating. But what do you do about all the stuff you bring home? This brings us to our last step.
When you start getting extreme savings, you’re going to stockpile items very quickly, and you’re going to need more space. Organization and free space management are two skills that you’ll want to develop over time if you’re going to have a lot of stuff on hand.
You can easily pick up more than a month’s supply of frozen meat and vegetables, so a deep freezer, for example, is a must. Set up a cabinet or shelving unit in your garage to conveniently store the hundreds of canned goods you’re going to stack up. Your may be coupons organized, but if you don’t stay ahead of storage space, all of your free items will overrun your house. Keep this list of do’s and don’ts in mind:

Coupon websites:

Why the experts like it: Coupons.com offers as wide a variety of timely coupons as you'd find in the grocery shoppers' gold standard: the Sunday paper, says Dworsky. Phil Lempert, founder of news site Supermarket Guru, praises the site's simple layout, which makes it easy to browse available coupons, and then print them out for in-store use. Enter your zip code for area-specific deals. There's just one minor drawback: "There are still some retailers that will not accept Internet coupons," cautions Lempert. Check that your supermarket does so before downloading the site's coupon-printing software.
Sample deal: Save $2 on two jumbo packs of Huggies Supreme diapers.
Why the experts like it: CouponCabin.com keeps its discount fare fresh, says Linda Sherry, a spokeswoman for Consumer Action, a consumer advocate. Staffers update deals three times a day, and frequently check each coupon code to ensure it works. Sections for "most-used coupons" and "favorite deals" point shoppers toward the best ongoing promotions at online retailers. An added bonus: A weekly email newsletter alerts consumers to the latest deals every Monday.
Sample deal: Link to Eddie Bauer's web site through CouponCabin.com and use coupon code "Perfect" at checkout to save 30% and receive free shipping. Offer expires Dec. 31.
Why the experts like it: CouponMom.com covers a lot of ground, listing online coupon codes, printout coupons and free samples, among other types of discounts. And while other sites are riddled with offers and banner ads, CouponMom.com's simple design makes finding discounts easy, says Garen Daly, host of Massachusetts-based radio show "Frugal Yankee." Deals are reliably accurate, too, adds Tawra Kellam, founder of frugal living newsletter Living on a Dime. Members can find all available coupons from several sources using the virtual coupon organizer. Sign up for email alerts on sales at favorite retailers, or on a shopping-list staple like the kids' favorite brand of peanut butter.
Sample deal: Link to discount gift certificate site Restaurants.com through CouponMom.com and save an added 40% on any restaurant gift certificate order. (Shoppers pay $6 for a $25 gift certificate, instead of the regular already discounted rate of $10.) Ongoing deal.
Why the experts like it: RetailMeNot.com's dedicated community is what makes this site stand out. Users indicate whether a discount code worked for them or not, helping shoppers quickly filter out bad deals, says Hunt. They also add comments, pointing out when a code last worked, or any strings attached. "It's pretty darn reliable," she says. Email alerts notify you when new codes are posted for your favorite retailers.
Why the experts like it: SmartSource.com merges local store sales and a wide array of printout coupons and online deals to help consumers maximize savings, says Lisa Lee Freeman, editor in chief of Consumer Reports' ShopSmart magazine. The selection is great, and entering your zip code yields even more deals specific to your area. (As with Coupons.com, check that the supermarket accepts printout web coupons before downloading the software.)

Sunday, September 16, 2012

America's Dept andFiscal Cliff: What it means to you and how to be ready for it

The Fiscal Cliff Explained
“Fiscal cliff” is the popular shorthand term used to describe the conundrum that the U.S. government will face at the end of 2012. U.S. lawmakers have a choice: they can either let current policy go into effect at the beginning of 2013 – which features a number of tax increases and spending cuts that are expected to weigh heavily on growth and possibly drive the economy back into a recession – or cancel some or all of the scheduled tax increases and spending cuts, which would add to the deficit and increase the odds that the United States could face a crisis similar to that which is occurring in Europe.
The oncoming fiscal cliff is a concern for investors since the highly partisan nature of the current political environment could make a compromise difficult to reach. This problem isn’t new, after all: lawmakers have had three years to address this issue, but Congress – mired in political gridlock – has largely put off the search for a solution rather than seeking to solve the problem directly. Republicans want to cut spending and avoid raising taxes, while Democrats are looking for a combination of spending cuts and tax increases. Although both parties want to avoid the fiscal cliff, compromise is seen as being difficult to achieve – particularly in an election year.
The most likely result is another set of stop-gap measures that would delay a more permanent policy change until 2013 or later. The election will almost certainly have an impact on the direction of future policy, particularly if one party earns a decisive victory. Nevertheless, the non-partisan Congressional Budget Office (CBO) estimates that if Congress takes the middle ground – extending the Bush-era tax cuts but cancelling the automatic spending cuts – the result, in the short term, would be modest growth with no major economic hit.
Among the laws set to change are the end of last year’s temporary payroll tax cuts (resulting in a 2% tax increase for workers), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that would take a larger bite, the end of the tax cuts from 2001-2003, and the beginning of taxes related to President Obama’s health care law. At the same time, the spending cuts agreed upon as part of the debt ceiling deal of 2011 will begin to go into effect.
Possible Effects of the Fiscal Cliff
The effect on the economy could be dramatic. While the combination of higher taxes and spending cuts would reduce the deficit by an estimated $560 billion, the CBO estimates that the policies set to go into effect would cut gross domestic product (GDP) by four percentage points in 2013, sending the economy into a recession (i.e., negative growth). At the same time, it predicts unemployment would rise by almost a full percentage point, with a loss of about two million jobs. A Wall St. Journal article from May 16, 2012 estimates the following impact in dollar terms: “In all, according to an analysis by J.P. Morgan economist Michael Feroli, $280 billion would be pulled out of the economy by the sunsetting of the Bush tax cuts; $125 million from the expiration of the Obama payroll-tax holiday; $40 million from the expiration of emergency unemployment benefits; and $98 billion from Budget Control Act spending cuts. In all, the tax increases and spending cuts make up about 3.5% of GDP, with the Bush tax cuts making up about half of that, according to the J.P. Morgan report.” Amid an already-fragile recovery and elevated unemployment, the economy is not in a position to avoid this type of shock.
The cost of indecision is likely to have an effect on the economy before 2013 even begins. The CBO anticipates that a lack of resolution will cause households and businesses to begin changing their spending in anticipation of the changes, possible reducing GDP by a full half-percent in the second half of 2012.

Another way of looking at it: 

Federal Reserve Chairman Ben Bernanke and a number of observers have used the term “fiscal cliff” to describe several big fiscal events set to occur in the U.S. at the end of this year and in early 2013. Among them:
  • The expiration of the Bush-era tax cuts at the end of 2012, including current lower tax rates on capital gains, dividends, income, and estates, as well as number of other measures.
  • The expiration of fiscal stimulus measures, such as the payroll tax cut and extended unemployment benefits.
  • Spending cuts scheduled to be triggered automatically in January 2013 as a result of the failure of the deficit reduction super committee last year.
Depending on estimates, the impact of all these actions taken together would be a fiscal shock on the order of $300 billion to $600 billion in just one year. Such policies would reduce the budget deficit and begin to address the nation’s increasingly worrisome debt situation. However, economists generally agree that allowing the fiscal cliff to take effect in full, at the same time, could have a substantially negative impact on the economy in 2013. But that isn’t necessarily going to happen. I see four possible scenarios.

Scenario 1: punt

A likely scenario is that Congress and the president agree to punt the issue into 2013. If this occurs, the tax cuts will not expire, tax increases won’t take effect, and the spending cuts will be delayed until after the presidential inauguration and new Congress arrives in 2013.

Scenario 2: modest compromise

Congress and the White House reach compromises on some tax and spending provisions, with the election having a significant impact on what those compromises might be.

Scenario 3: over the cliff

A less-likely scenario, I think, is that Congress and the White House fail to reach any compromise whatsoever and are unable even to agree on how to delay the looming measures. The economy goes over the cliff. 

Scenario 4: grand bargain

In my view, the chance of a grand bargain taking place after the election and before the end of the year is a long shot. In this scenario, Congress and the White House would reach a deal addressing tax, spending, and fiscal issues for the medium to long term. 
In addition to the fiscal cliff, the U.S. will again approach the debt ceiling early next year. While the sequence of events puts the debate over the fiscal cliff before the debt deadline, the two issues are likely to be intertwined.
The outcome of the 2012 elections matters, but the resolution of these issues is tough regardless of whether Democrats or Republicans are in control. That’s because they reflect longstanding philosophical differences between the parties about the proper role and size of the government, and how to grow the economy.


More Sources:

Here are some answers to common questions about the “fiscal cliff” facing the U.S. economy. This is a revised version of the original post published earlier this year.
What is the “fiscal cliff”?
The fiscal cliff is the combination of large spending cuts and tax increases that are scheduled to be automatically enacted at the start of 2013. Bush-era income-tax cuts will expire for tens of millions of Americans, and billions of dollars of spending cuts will take effect because Congress couldn’t reach a deal last year to reduce the deficit by at least $1.2 trillion over 10 years. Democrats want a combination of spending cuts and tax increases, while Republicans want to cut spending, but don’t want to raise taxes. Both want to avoid the fiscal cliff, because it forces severe cuts, particularly in defense.
What taxes and spending are affected?
A payroll-tax holiday ends, which means a tax increase for workers of as much as 2% of wages. Income-tax rates revert to pre-George W. Bush levels, rising not only for the rich but for nearly all taxpayers. Across-the-board cuts in domestic and, particularly, defense spending are triggered.
What is the immediate cost to the economy?
The sudden rise in taxes and cuts in spending would have a harsh impact. In all, according to an analysis by J.P. Morgan economist Michael Feroli, $280 billion would be pulled out of the economy by the sunsetting of the Bush tax cuts; $125 million from the expiration of the Obama payroll-tax holiday; $40 million from the expiration of emergency unemployment benefits; and $98 billion from Budget Control Act spending cuts. In all, the tax increases and spending cuts make up about 3.5% of GDP, with the Bush tax cuts making up about half of that, according to J.P. Morgan.
How would this impact growth?
The nonpartisan Congressional Budget Office projects that if the tax increases and spending cuts go into effect, the economy would contract at a 2.9% annualized rate in the first six months of 2013 and the unemployment rate would rise to 9.1% at the end of next year. The jobless rate was 8.3% in July. If the spending cuts and tax increases are averted, the economy would grow at an anemic 1.7% next year and unemployment would fall slightly to 8.0% by the end of next year.
.How worried is the Fed?
Federal Reserve Chairman Ben Bernanke has warned lawmakers about the potential effect of the “fiscal cliff,” adding that “there is absolutely no chance that the Federal Reserve would be able to have the ability whatsoever to offset that effect on the economy.” The Fed has been concerned about the fiscal cliff all year. In the minutes of its April meeting, for instance, the Fed said that if lawmakers don’t reach agreement on a plan for the federal budget, “a sharp fiscal tightening could occur at the start of 2013.” That uncertainty “could lead businesses to defer hiring and investment” and weigh on economic sentiment, officials worried at the meeting. Agreement on a long-term plan could alleviate some of that uncertainty. On Wednesday, the Fed released minutes from its July 31-Aug. 1 meeting, in which it said participants see “a sharper-than-anticipated U.S. fiscal consolidation” as a “significant downside” risk to the economic outlook.
What is the state of play in Congress currently, and what are some possible scenarios?
No final action is likely until the end of the year, when hitting the fiscal cliff is imminent, because of partisan divisions in Congress and the political risk of taking tough votes on taxes and spending ahead of the November elections. In the short term, House leaders plan a vote to extend Bush-era tax levels for all taxpayers temporarily, possibly for one year, to give the next Congress time to work on overhauling the tax system to make it more competitive with other countries. That pre-election vote likely will include a fast-track mechanism so the eventual tax overhaul will get an expedited vote next year, and won’t get hung up by parliamentary maneuvering. The badly divided Senate doesn’t appear likely to take a vote on basic tax rates until after the election. A big question is whether and how lawmakers in a lame-duck session will seek to soften the blow of scheduled spending cuts

How to prepare: 
Now there are many ways to prepare for this. This is just what I think people should do to prepare. 
Have a savings plan just in case. 
Get something besides fiat currency
Get out of any debt you may have
Get some other type of fiat currency ex Swiss franks yen ect even maybe bitcoin
Keep your eyes on the news. In cases like this we will never know what will happen or what can happen but it pays to be prepared so keep your eyes and ears open and adopt as things progress. 
Learn a skill and trade just in case. We never know how we will end up we might make it or we might have to resort to stone-age way of life.  Who knows for sure but learn something a craft you can do with your hands. Like welding, carpenter , architect and so on so forth.
Have gold, silver, diamonds, rubies ect. You never know what will be valuable or what will remain valuable have those things never really loose value. 
Learn to live off the grid if need be. Again you never know these days what will happen. 
And finally use your best judgment when it comes to this. You know what is best for you. Not me or anyone else. Use your best judgement and adopt and over come. You can not prepare for everything being able to adopt is key and a way of life. While you can try your best you just never know what life will throw at you.