Welcome FUSION readers!

Tuesday, February 23, 2010

Calculating Your Savings

Some of you may be wondering how I calculate my savings each week. This is kind of an in-depth math lesson, so if math isn't your thing that's a-ok with me. I give you permission to skip over this post (just this once). However, you might find the Savings Tracker links at the bottom very helpful.

First, lets define our variables.

OOP (Out of Pocket)
Retail Cost
Actual Cost
  • The OOP amount is basically what I paid for the transaction after all sales and mfg coupons. My total here also includes Register Rewards, Extra Bucks & Catalinas since I consider these items cash in paper form.
  • You calculate the Retail Amount by adding the savings shown at the bottom of your receipt (this will automatically include RRs, ECBs & Catalinas spent) to your Cash spent. This is what those items would have cost if you had not utilized sales and coupons.
  • Earlier, I stated I that consider RRs, ECBs & Catalinas to be cash in paper form, so in order to determine what I Earned I add up what I received back after a transaction. I also add mail-in rebates into what I Earned but I don't count them until I physically have them in hand. I have never had a rebate get lost or be rejected (knock on wood) but I don't like to count my chickens until they hatch.
  • To determine your Actual Cost, you would subtract what you Earned from what your OOP expense was.
  • To calculate your Savings, simply subtract your Actual Cost from the Retail Cost.
The formula looks like this:
OOP: Cash + RRs + ECBs + Catalinas spent.
Retail Cost: Savings on receipt + Cash
Earned: RRs + ECBs + Catalinas received
Actual Cost: OOP - Earned
Savings: Retail Cost - Actual Cost

To calculate the percentage saved, use this formula:
(Savings/Retail Cost) * 100

The main reason I count RRs, ECBs and Catalinas as cash is because that is the way I advertise it in my matchups. If I tell you that the cost of your Colgate toothpaste is $0.25 after ECBs, then I want to make sure I calculate my savings under that same premise. No matter how you calculate your savings, you need to make sure you do it the same way each time, every week. If you want to count RRs and ECBs as coupons rather than cash, that is fine. However, don't count them as coupons and then try to subtract out what you earned as well. That's double dipping and your counts will be off.

I also use a savings tracker to keep my costs tallied up for the year. Here are some that you might find helpful.

Grocery Savings (I use a modified version of this one)

I also like to track my savings by store, so I created this spreadsheet: Weekly Savings By Store

So, is all that clear as mud? I hope not. Do you keep track of your savings each week/month/year? What formula do you use?



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