Your Loyalty Could Be Costing You

No, I’m not talking about your loyalty to your spouse or significant other. What I’m referring to is the companies you regularly do business with. Your loyalty to them could be costing you a lot of money.

Companies used to reward loyalty. Take pensions, for instance. It used to be that you went to work for a company after finishing school and you worked for that company your entire career. Both my father and father-in-law have been working for the same company their entire working lifetimes. In exchange for our loyalty, the company provided us with a nice pension for retirement. Today, pensions have all but disappeared.

This same sentiment carried over to the consumer world as well. Now, companies routinely punish loyalty while rewarding new customers with specials and discounts. This trend is taking hold in more and more industries. Below are some specific areas where your loyalty could be costing you.

Cable and Satellite Providers

These companies are among the worst when it comes to punishing loyalty. How many times have you seen an ad for a steeply discounted rate for TV and internet service? If you read the fine print you’ll see that the rate is only valid for new customers and only for the first six or twelve months.

To get the best deals, you need to shop around every time your contract ends. If switching providers sounds like too much work, at least make some calls to competing providers and ask for their new customer specials. Then use that information to negotiate a better deal with your current provider.

Banking Services

Big banks love to reward loyalty with increased fees and minimum balance requirements. They don’t care about you, your family or your future, no matter what they might claim. To get free checking and better service, go with a credit union or online brokerage company like Schwab or Fidelity.

When it comes to savings accounts and CDs, there isn’t one bank that consistently offers the best interest rates. To find the best rates, go to Bankrate.com and select the product you’re looking for. Rates are updated daily, so you can be sure you’re always getting the best rate for your savings.

The Dentist Office

Occasionally when I pass a dentist office I’ll see a large banner announcing a “New Patient Special”. This could include an exam, x-rays and a routine cleaning. As an uninsured college grad on a strict budget, I took advantage of one of these offers a few years ago. At $85, the service was as good as I received from my regular dentist in the past. If you don’t have insurance, you could save over $100 using these offers.

Car and Homeowners Insurance

Insurance companies have different methods for determining the rate they will charge you. Because of this, you might be overpaying for insurance. Take car insurance, for example. Young men aged 18-24 are notorious in this industry because of their high accident rate, so they tend to have a hard time finding reasonable coverage. Progressive is known for taking on this group at lower rates than other insurers would. This isn’t a guarantee, but it shows that comparing rates can save you real money regardless of age.

It’s a good idea to compare rates for car and homeowners insurance (or renters insurance) every 2-3 years when your premium comes due. Sites like NetQuote.com and Insweb.com can help you get quotes.

Grocery Store Brands

Your loyalty at the supermarket could be costing you greatly. The typical family spends $6,500 a year on food. By shopping at discount stores and Walmart for the majority of your groceries, you could save 30%, or about $2,000 a year!

As I mentioned in a previous post, buying store brands is one of the best ways to save on groceries. But what if you just can’t bring yourself to try generic? Then look for the brand that’s on sale, and combine it with a coupon when possible. A couple of examples will drive home the point.

I’m a big frozen meal nut — I eat them 5 days a week at work instead of going out for lunch. There are certain meals I like, but I’ll only buy when they’re on sale. If none of my usual suspects are on sale I’ll try something new.

My wife really likes ginger ale, and sends me to the store weekly to buy some. There are always about eight different brands, but I only consider ones which are on sale. She gets her ginger ale and we save on our grocery budget!

Never be afraid to try things differently from the way you’ve always done them. You’ll save dough and you just might discover something that works better in your life.

Walmart Increasing Its Focus on Healthy Foods

As the nation’s largest grocery chain, Walmart plays an important role in the lives of many American families. Many of its customers tend to be lower-income and can’t always afford healthy food choices. But now, the king of low prices is shifting its focus and making it easier for people to find healthy options.

According to The New York Times, Walmart will begin rolling out bright green “Great for You” labels this Spring. The labels will be placed on about 20% of its grocery items which are high in protein or other nutrients and low in fat and sugar.

Health groups, as you can imagine, are coming out in support of Walmart’s efforts. According to one such group mentioned in the article:

Any visual cue that allows consumers to quickly differentiate healthier food options helps busy families, and we are pleased that Walmart continues to be a critical leader among a growing number of private sector organizations looking to end this (obesity) epidemic.

It’s clear that Americans are on the go more than ever. By introducing this easy-to-see label on certain foods, Walmart is doing its part to mitigate the obesity epidemic we’re currently faced with. Shoppers in a hurry can now easily spot healthy items without having to scrutinize the nutrition labels.

Something to watch for as Walmart rolls out these labels is whether the items they regard as healthy really are good nutritional options. Companies routinely place marketing speak such as “All-natural” and “Wholesome” on their packages. They’re able to get away with this because the FDA doesn’t regulate such claims. But whenever a company this big makes a shift like this, it’s worth paying attention to because of the number of people it could impact.

One of the arguments people give against eating healthier foods is the cost. Now that the country’s largest retailer will offer more healthy options that fit the budget, you may not have an excuse!

Image by blog.outerbanksvacations.com

Is Cooking at Home Still a Bargain?

According to Daily Finance, the price of groceries rose between 4.25% and 4.75% in 2011. The cost of eating out rose only half that amount — 2 to 2.5%. The article states that high unemployment and low wages continue to lead more people to eat at home. Increased demand for groceries last year led to higher-than-normal price increases (typically 2.9% a year).

Given these numbers, it’s a good time to ask: Is eating at home still cheaper?

Some restaurants such as Olive Garden, Starbucks and Taco Bell, are adding menu options to appeal to the price-conscious and drive business during slow times of day. Olive Garden is revamping its menu to offer lower-priced options, renovating some of its restaurants, and changing its ad campaign all in an attempt to refresh its brand. Starbucks is adding alcohol at some locations while Taco Bell is experimenting with breakfast. All this at a time when some grocery staples, such as milk and beef, rose 9.2% and 11.5%, respectively, in 2011.

Restaurants are also experiencing increasing food costs, but are often forced to absorb the increase or look elsewhere to cut costs:

If restaurants pass along all their cost increases to consumers, it will make them less competitive.

Restaurants are in an interesting bind. On one side they’re facing higher food costs, and at the same time they’re facing consumers who increasingly expect a deal. I don’t envy restaurant managers who have to make some tough decisions this year about how to cut costs while still offering a quality product.

Back on the grocery side, what can you do to save at the store? Recently I wrote about 7 ways to spend less on groceries, and followed it up with 3 more ways to save.  With some forethought and a little planning, it’s possible to blunt the impact of higher prices on your wallet. One of my suggestions was to give store brands a try. Recently at the store, I bought three different generic items and saved 60% versus the national brands. This tip alone can produce substantial savings.

Even with higher grocery prices, eating at home remains a bargain. Last time I ate at Olive Garden, the cheapest entrée on the menu was about $12. After tax and tip it was $15. I could instead take that $15 and buy enough food for two full dinners with leftovers for my wife and I at the grocery store. When comparing the number of meals you get for $15, it’s Restaurant: 1, Grocery Store: 6. Not even close.

The USDA predicts that grocery prices will increase 2.5% to 3.5% in 2012. While this is much closer to the average, prices are still headed up. What this means is that you’ll have to be more creative and find ways to save that work for you.

There are, of course, reasons you might still choose to eat out. Maybe you want some time to talk with your family without worrying about putting dinner on the table, or maybe you just want out of the house. But in pure dollars and cents, eating at home still beats going out.

Photo by ReneS

3 more ways to save on groceries

A while back I offered 7 ways to save at the grocery store. Here are 3 more ways to save:

1. Compare prices for your favorite items. Prices for your most frequently-purchased items will be different depending on the store you’re shopping at. Next time you go grocery shopping take a pen and notepad and write down the prices for the items you buy most frequently. Repeat at a few other stores in your area, and before long you’ll have a good idea of which store has the lowest overall prices.

2. Product substitution. Say you like peanut butter. The price of peanuts has risen this year because of a shortage caused by bad weather. So instead of buying peanut butter you might try jelly or jam or any number of other alternatives. I use this tactic frequently when grocery shopping. I have a few different brands of bread that I prefer, and I don’t hesitate to buy them — when they’re on sale. When they’re not I find something else to try.

3. Don’t be tempted by items at checkout. Items are placed in checkout lines for one reason only: to get you to buy more. Gum, candy, batteries, lint rollers, anything the store thinks you may have forgotten while shopping. Magazines also appear here. While it can be tempting to pick up one or more of these items while standing in line, your wallet will thank you if you avoid them.

Now that we have 10 ways to save at the grocery store, are there any that I missed?

Photo by qmnonic

7 ways to spend less on groceries

Food prices at the grocery store are projected to rise 4 to 5 percent this year, according to the USDA. Some of the factors causing this increase are higher energy prices and growing global demand for food. This comes at a time when many Americans are struggling with stagnant wages (for those lucky enough to have a job) and high unemployment. With a little planning though, you can avoid paying more at the grocery store.

1. Plan ahead. Check newspaper fliers before your trip and create a weekly meal plan based on sale items. Use your meal plan to make your shopping list. If you don’t subscribe to the paper, try Sundaysaver.com, which lists weekly sales circulars from most major grocery chains.

2. Don’t go when you’re hungry. You’ll find yourself putting more than you intended into your cart.

3. Shop at hard discounters. Aldi, Save-a-Lot and others fall into this category. You can save 40% off your typical grocery bill by shopping at a hard discounter. These stores may not appeal to some though, because they tend to have a limited selection, carry mostly store brands, don’t accept credit cards (in most cases), and you have to bring your own bags. We don’t have an Aldi near where we live, so I get a little giddy when we are out of town and find one. My wife finds humor in my excitement, but I get the last laugh after all the savings!

4. Stick to your list. You have a list for a reason. You’re on a mission — don’t allow yourself to deviate from what’s on your list.

5. Use coupons. Sunday papers are the best source, but there are some great coupon sites out there as well. I like Coupons.com and Hip2Save.com. The latter alerts you to not only grocery coupons, but deals at other retailers and free samples as well. When combined with your frequent shopper card, using coupons will yield considerable savings.

6. Give store brands a try. If you find that you prefer the name-brand, fine. But most store brands taste just as good and are of similar quality.

7. Pay attention to unit price. Generally you’ll get a per-unit discount when buying in bulk. This is the magic of the warehouse clubs. But this isn’t always the case. By comparing the unit price of different items you’ll know if you are getting a deal. Most stores list unit prices on the shelves, which makes your job easy. A word of caution though: don’t buy a larger product just because the unit price is lower. Buy only what you will use up before the expiration date, because throwing away expired food defeats the purpose.

Budgets are tight right now. By having a plan in place you can make the price increases irrelevant in your life.

Five cheap foods to avoid

More Americans are turning to fast food and other processed foods in an attempt to save money. According to Savvysugar.com, while these foods may be good for your wallet, they aren’t as kind to your health.

The five foods they list are:

  1. Spam
  2. Instant noodles
  3. Fast food
  4. Pop Tarts
  5. TV dinners

While each of these may be cheaper (and faster) than a home-cooked meal, they contain processed ingredients, preservatives, and other unnatural substances.

I’m guilty of eating fast food (occasionally when on the go) and TV dinners (most days for lunch at work.) When eating fast food, I try to pair a less healthy option like a sandwich with a more healthy option like salad. And when eating frozen meals, I limit my choices to those with reasonable calorie and sodium numbers.

This list is by no means exhaustive. There are many other artificial foods out there clamoring for your dollar. Eating these types of foods in moderation isn’t bad for you – it’s when they constitute the majority of your diet that problems arise. Towards the end of last year I noticed that I wasn’t eating enough fruits and vegetables, so I made a resolution to include these in my diet as often as possible. Now, when I’m at the grocery store, I tend to buy whatever fruit is on sale that day and eat it over the following week. I’ve had mixed success with this goal over the past year.

With some effort, you can find reasonable choices that are good for your wallet and won’t harm your health.