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Consumerism on a Budget: Why Americans Proudly Use and Love Coupons

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Maybe Americans love of extreme couponing has something to do with their Puritan roots. While the word “frugal” probably wasn’t tossed around when the early settlers set up shop on American shores, making the food stretch and getting through the harsh New England winters certainly required vast amounts of foresight and budgeting. According to statistics compiled by the coupon-and-promo-code site RetailMeNot, which surveyed 10,000 consumers from 11 countries, Americans are the most frugal shoppers and deal hunters in the world. Numbers don’t lie, but what do these statistics say about our society?

Taking Pride in Saving Money

According to RetailMeNot, nearly half (48 percent) of consumers in the United States said that they use coupons as a symbol of their savvy shopping. Now compare that number to Sweden, where only 15 percent of consumers think that looking for opportunities to save money is important. Whether cutting food coupons from the Sunday newspaper or clicking through websites for Black Friday-type sales, in the end, it doesn’t matter if we shop at a brick and mortar store or find it online, we pride ourselves in saving money on products and gravitate towards places with the best deals, discounts and sales. Of course, why Americans spend so much time devoted to finding the best deal is another question; for many shoppers, bargain hunting is a hobby, sport and Grail quest all rolled into one. Our society may be comprised of entrepreneurial money-makers, but it is also a society of getting the most out of our money. Those 17th century Puritans would be proud.

America’s Most Coupon Loving Cities

So if we are a nation of couponers, what cities and regions take the gold medal when it comes to bargain hunting? According to DailyFinance, Midwestern and Southern shoppers love digital coupons, with Atlanta taking the top spot as the city with the most online couponers. Boston, Philadelphia, Pittsburgh, and Washington D.C. have the most frugal shoppers in the Northeast (notice the exception of New York). In Coupons.com’s Top 25 Most Frugal Cities list, the West Coast is the least frugal region in the nation, with only Seattle making the cut. What, if anything, does this say about Californians?

Couponing as Couture

People have always cut coupons and looked for doorbuster deals at stores. Who doesn’t want to save a couple of bucks, right? Budget shopping, however, gained popular attention following the 2008 recession. It makes sense. If you’re not in a good financial position, you will look to budget and cut costs everywhere you can. Savvy shopping became trendy, a sort of fashion-cum-lifestyle statement.

Just as all fashion fads rise and fall, however, couponing is not as trendy as it once was. According to NCH Marketing Services, manufacturers sent 305 billion coupons into circulation in the U.S. last year. That’s roughly the same total as 2011. However, the number of coupons used by consumers in 2012 measured 2.9 billion, representing a dip of 17 percent compared to the year before. Still, the question remains: are Americans more financially secure today and therefore using less coupons, or is the couponing craze as a trendy lifestyle statement waning? It all depends on whether you ask a budget-shopper or a spendthrift.

Forgetting to Rebalance Makes You Wobbly

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Quick question:

What does a good investor have in common with a good tightrope walker?

They both remember to rebalance!

HA!

I’m here all week folks.  Don’t forget to tip your wait staff!

Forgetting to rebalance is just as dreadful for an investor as it is for a circus performer.  Let’s talk about why.

First, let’s dispense with a definition.   My definition of rebalancing is this:

Rebalancing is the act of periodically putting one’s portfolio back to one’s previously well thought-out asset allocation based on one’s unique risk tolerance, time frame, goals, and objectives. 

Fun, huh? Disecting each part of that definition results in the following:

1 )   …act of… – this means that rebalancing is an action.  You.  Must.  Do.  It.  (or at least cause it to be done through automatic programming).  Rebalancing is something that must be done, by you.

2)   …periodically…this doesn’t mean whenever you feel like it or whenever you remember.  It means you need to select that time and mark it in your calendar.  We prefer annually, but semi-annually is OK, too.  Quarterly…eh…you’re probably wasting time.  Any more frequently than quarterly and you’re doing market timing by a different name.

3)   …putting…portfolio back… This next part is relatively easy.  You’re putting it back – the way it was.  No  thought required here.  Just like I tell my kids.  Put your toys back the way they were.  In the places they were before you played with them.

4)   …previously well thought-out… During your rebalancing activities, you do not need to redesign your model.  You’ve already done that.  Previously.  And it was well though-out.

5)   …asset allocation based on unique… We could spend hours here, but here’s where you should’ve spent some serious thinking time around your risk and goals.  Rebalancing is only rebalancing if it’s back to an asset allocation.

What can happen if one doesn’t rebalance?

That’s easy – anecdotally, consider the late 90s or late 2007.  A big run up in one area of the market (say the Large Cap stocks of the 90s) could mean they’re overvalued.  What happens when something’s overvalued?  It eventually becomes undervalued!  Rebalancing can help to sell winners at a gain and buy more shares of positions that are undervalued.

One of the “tricks” professionals have up their sleeves is rebalancing.  It is a automatic process designed to take the thinking and emotion out of investing and allow investors to capture profits and reposition those dollars where they can buy the most shares of undervalued investments.  Use rebalancing to your favor!

PS: The US stock market is up HUGE this year.  Is it time you rebalanced???

Photo: quinn.anya