I don't clip coupons. I *chop* them.

As I've said before, I'm not exactly the resource for devotees of extreme frugality.

I like convenience. And I don't like paper.

All of that means that dealing with Sunday circulars for the sake of 75 cents off my pineapple-orange-banana juice is really not my thing.

But I DO approach certain retail transactions with coupons, given an appropriately low level of effort and a relatively high percentage haircut. Ergo, the coupon chop.

Chop 1: Email subscriptions

I have a junk mail account that I use for very little other than retail registrations. Currently, I'm subscribed to the lists for a major bookseller, a clothing retailer, a floral delivery service, and a few others. A lot of these offers are not worth downloading, but periodically you'll get the "25% off items already on sale" email, and then it's on. The best I've seen for floral delivery is 15% off, but given the price of flower arrangements (which I sometimes send as gifts), that's not too insignificant. Fast to read, easy to delete, and occasionally sizable discounts: What's not to like?

Chop 2: The Entertainment Book

I received my local edition as a gift last year, and it was FANTASTIC. The books don't just cover restaurants and admission tickets (although there are plenty of those). Groceries, car maintenance, and pet supplies are items that most people are almost guaranteed to purchase anyway (and those help the book pay for itself right off). Of course, being a more-than-occasional movie viewer, I snap up the discounted ticket coupons. And I'll be renting a car later this year, so getting the third day free will be a nice bonus. Since I got a discounted price on this year's book (see Chop 1), I expect that I will be able to get three times my money out of it just on groceries and car servicing. And the tidy little book means that the coupons don't get lost.

Chop 3: Google

If there is a store with a web presence, searching on "[name of store] coupon" will almost invariably turn up decent discounts for online or store purchases. I'm currently in the market for new sunglasses (using my grace period for my flex spending). I like Lenscrafters. A two-second search landed me with a "$100 off frames" coupon, which will mean that most of my spending will come from the flex account and NOT my pocket. There's also retailmenot, but I have to admit I haven't used it much.

There are obvious caveats: Don't purchase things you wouldn't normally buy just because you have a coupon, and don't let the fact that one store offers a coupon on an item keep you from comparing to another store's regular price.

But for big-ticket items, these three simple methods give me a fair amount of bang for the buck.

Goal Checkup for 2007 and New Goals for 2008

So, I set up some goals for myself at the beginning of 2007. How'd I do?

1. Improve my condo fund to at least $8K. Done, if later than anticipated. I had originally planned to use some funds from my extra July paycheck to boost this, but my car needed some suspension work done. So I used part of my December bonus to push me over the top.
2. Take a homeownership class. Done. I have to call and get it renewed for next year, which is when I will at least start TALKING to lenders and realtors, even if I decide (as is increasingly more likely) that I'd like to keep saving into 2009.
3. Limit snack/cash withdrawal trips to CVS to once a week. Heh heh heh. This was a dismal failure, but I DID make fewer trips, I think.

And for 2008, my goals are:

1. Reach a positive net worth. Based on my December NW statement, I am N dollars in the red. If I continue to make regular bi-weekly contributions to my short-term savings at the levels I do now, that should give me A dollars (35.6% of the total). If I continue to make principal payments on my student loans at current levels, that will lead to B dollars by the end of the year (32.0% of the total). (It is likely that I will inherit some money from my grandfather, which could push B up. But I don't want to plan on that.) That leaves 32.4% to come from contributions and earnings from my retirement savings. Divided by 27 pay periods (there is an extra pay period this year), that is less than my current contribution and match level, so it should be quite feasible.

So, to make this SMART: I will improve my net worth by N dollars, by making bi-weekly contributions to savings at my current level or higher, by making monthly payments towards debt reduction at my current fixed payments or higher, and by taking advantage of my retirement savings plan and making bi-weekly contributions there, which will get me to my goal by the end of the year.

2. Continue to pursue homeownership. This does NOT mean that I will actually buy a place in 2008. It does mean that I will a) meet with lenders to determine what I can afford based on current salary and savings, b) check with local brokers and Redfin to develop a more refined sense of the market, and c) save at least an additional $3500 dollars in my condo fund.

SMART: I will meet with a realtor/lender by mid-April. I will review the housing market on an ongoing basis, with checkups in February, May, and if necessary, August, October, and December. Part c will be covered by the contributions I've planned in goal 1.

3) Push my emergency fund up to 3 months' worth of expenses. Given my expected rate of contributions to savings, this should be easy to do by the end of the year, even though I will be retooling my "must-haves" to accommodate fuel inflation and some other things.

SMART: So, by mid-February, I will update my estimate of monthly expenses to reflect current spending needs. With regular contributions to my emergency fund, I will add savings throughout the year. By the end of December, I will have three months' worth of expenses.

December Net Worth, +8.8% monthly, +55.9% annually

Cash and Cash Equivalent

My checking account benefited from the later timing of some bills, although I did buy fewer groceries because of all the holiday family meals.

My overdraft fund is now fully funded plus a buffer, so I'll start moving the excess to my e-fund. (It is down from this time last year because I was holding some funds to be allocated elsewhere then.) I'm pleased with the growth in my e-fund and my condo fund over the year.

Investments

Another down month for the markets, but decent allocation and management (for my mutual fund) kept this moving forward. The annual growth has been respectable.

Loan Balances

Sometimes it feels like I'm just chipping away at these for eternity, but then I see how much my balances have dropped over the year and I know that I'm doing the right thing. I could pay down my debt faster, but since my interest rates are quite low, and because I really want a solid savings base, I think my progress is reasonable.

Other Debt

Hey, big spender. Now that I've finally joined the ranks of the reward cardholders, I did make more purchases with my rewards card. I also spent more on gas than I have in any month since I left grad school (driving back and forth to visit family every day will do that). And I also bought some family gifts that would be partially reimbursed. I have now paid down that card to zero, and once I get some medical expenses reimbursed, the other card will join it.

Overall

All told, I'm very fortunate. I didn't practice extreme frugality (I spent funds on LOTS of lunches out, cable, and some fairly expensive theater tickets), I didn't have much alternative income beyond some online surveys, and I didn't do much budgeting beyond my automatic, forced version. But simply setting up automatic savings and making sure I could cover all my fixed expenses helped me improve my position pretty handily in 2007. Here's hoping I do the same in 2008.

The Month Ahead

My grandfather recently passed away, so I'll have some expenses related to that. Of course, they are all well worth it.

This is my three-paycheck month, and that gives me some freedom to make an extra loan payment and savings contribution. But I also intend to put some money aside for my cousin's wedding in April. (My travel/holiday fund doesn't show up in my net worth, because I consider that pre-spent.) And I'll probably do some after-holiday shopping for some things I didn't get for Christmas.

I'm also hoping to get a jump start on my tax return, but beyond that, I hope it's a fairly quiet month.