Although clipping coupons at the kitchen table may be something you remember your grandmother doing, a whole new generation is catching coupon fever. With websites and TV shows devoted to extreme couponing, including The Krazy Coupon Lady and TLC’s Extreme Couponing, it’s easy to see why more people are turning to coupons to save money for their household.

But after coupons are redeemed and money is saved, what should you do with your spoils? If you don’t have to re-invest it all in gas money and rent, use it to improve your financial situation. Here’s a list of the five best places you can store your coupon savings for a rainy day and a brighter future:

1. Invest in Retirement

Nearly 25% of all Americans have less than $1,000 saved for retirement and 43% have less than $10,000 saved, according to the Employee Benefit Research Institute Retirement Confidence Survey. If you find yourself in either camp and are saving money from couponing, make a point to set some aside for retirement. If what you save from couponing doesn’t seem like enough for retirement, think of it this way: if you invest $1,000 each year from coupon savings into a Roth IRA, and your account earns 8% annually, in 20 years, you’ll have almost $46,000. That’s nothing to sneeze at.

2. Establish an Emergency Fund

More than one quarter of Americans have no emergency fund in place. In the case of a major medical emergency or job loss, an emergency fund is crucial. Most experts recommend that you have at least six months’ worth of living expenses set aside in case disaster strikes. The best way to set aside emergency fund monies is to budget for them. Another method is to save your grocery receipts and add up how much you saved by couponing at the end of each month. Then, contribute this amount to a savings account earmarked specifically for emergencies.

3. Invest in Your Kids’ College Education

While it’s certainly a debate as to whether you should invest for your retirement or your kids’ college expenses, if you save enough money from couponing, it’s possible to do both. Consider investing in a 529 college savings program with your savings. Depending on where you live, you may get a break on your state taxes, so check with your tax preparer.

4. Eliminate Credit Card Debt

The average American household carries more than $15,000 in credit card debt. But no matter how much debt you’ve got piled up, pay it off now. If you’re saving money by couponing, devote your extra funds to paying down your high-interest debt first. Again, save your grocery receipts and add up your savings at the end of the month. Devote all of or a large portion of these funds to your debt even if you’re also building up an emergency fund or saving for other purposes.

5. Pay Off Student Loans

Student loan debt can put a serious drag on your monthly finances. Until you pay it off, it’s not going anywhere–even if you file for bankruptcy. Unfortunately, like your degree, your student debt is yours forever. Your coupon savings may not be able to wipe out all your student loan debt, but they can make a dent in it.

Final Thoughts

Once you’ve decided where to put your savings, consider automating your efforts. Each month, have a set amount deducted from your checking account and deposited directly into your savings or retirement account. You can also set up automatic payments towards your credit card statement or student loan bill. Pretty soon, you might find that saving money and paying down debt is just as easy as clipping coupons.

In what other areas can you use your coupon savings?

This is a guest post by David Bakke, an extreme couponer and small business owner who writes about cash saving strategies on the blog Money Crashers Personal Finance.

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9 thoughts on “5 Smart Ways to Use Your Coupon Savings”

  1. Anonymous says:

    Love this post. I think people don’t think about these things. I was fortunate when I started my career in 2005 to have people who told me about all these things and because of it I started retirement funding from year one, and when I had kids we started college funds. Don’t have to put away hundreds even $25 a month adds up over years :)

  2. nepatrish says:

    i also have to add that because i have a stockpile of groceries in my house now, i eat out less and save money that way too.

  3. nepatrish says:

    since i started couponing, i went from counting out change for gas money the day before pay day to having a couple of dollars in my wallet. i got a free credit report and started paying off old credit bills that i neglected for a long time. a few of my smaller accounts have now been settled. i took advantage of the discounted payoffs that they offered me.

    because i’m not in good health and have pain issues that keep me from working full time, i’m doing private duty. i have one case and when my client goes into the hospital, i don’t get a pay check for that week. i’ve learned to rely on my stockpile for those times and see me thru. couponing has revolutionized my finances.

  4. Julie says:

    Smart ideas! We are nearly paid out of debt, have a small savings, and our next big thing is our 6-month cushion. We’re even teaching our kids to coupon, which will be great for our oldest who is nearing college age!

    • vanessa says:

      yes my daughter, who is 6, gets just as excited as I do when we get things for free with our coupons… she says “MOM! Your rich now cuz you have coupons and dont have to spend any money!” lol if only .. lol

  5. As good as these ideas are, they all assume you have that extra money from “savings” just laying around. The majority of couponers I know, myself especially, use coupons because we can’t afford the necessities at regular price, let alone any luxuries or to have any savings above and beyond. As a single working mom, couponing simply keeps us in our house and provides groceries/toiletries. The “savings” are nice but aren’t realistic for a lot of us couponers to do extras with them

    • Sara Foxyjolie says:

      I’m a single mom myself… I do know what you are saying but the article does say if not all your money goes to rent and gas money then…..

    • Sara says:

      So agree… I started couponing when I realized that shampoo, deodorant and other basics cost us such a huge amount of our budget (and I found KCL!!). We don’t eat out or do many of the “extras”. I wish I could follow the article but its not realistic at this point…
      I’d catalogue this article in the “remember for future when we hope to bein a better situation” filebox that I’ve been meaning to buy when it goes on sale. ;)

    • Vanessa says:

      I agree… I would love to think that im saving tons of money.. but realistically, the coupons allow me to get what I need, and use that money i would have spent on those things on gas and bills, etc… :( .. but couponing is awesome… dont get me wrong.. lol