The Problem With Extreme Couponing

The Problem With Extreme Couponing

In A Word: Liquidity

TLC has recently turned a one-off show into an ongoing series. And in the time between the first "Extreme Couponing" aired and this latest season, the problems with this behavior have really been brought home to me.

Last January, a family member died. And it turns out that he had been something of an extreme couponer and a hoarder of new items himself. I have been helping with the ongoing effort to clean out their home so that his wife can sell the house, and it has been a real eye-opening experience.

The problem with extreme couponing comes down to one word: liquidity.

I'm sure this family member thought he was providing for his family by buying (e.g.) 40 compact fluorescent light bulbs. He no doubt found them on sale, and bought as many as the terms of the sale allowed.

Then he died.

What do you do with 40 compact fluorescent light bulbs? Given that each bulb supposedly lasts for five years, that's 200 years' worth of light for one lamp. Or 20 years' worth of bulbs for one household with ten lamps. You get the picture: it's a lot of dang light bulbs.

Unfortunately, the sales market for light bulbs is, shall we say, a little weak. We may be able to sell them at a garage sale for pennies on the dollar. More likely they will end up being given away to various friends and family members, or donated to charity.

A charity deduction on the taxes is good, don't get me wrong. But you know what his widower would much rather have? Money.

It's become clear that he spent a whole lot of money on all of these purchases over the years. The cabinets and closets crammed full of "new in box" household items (toothpaste, laundry detergent, deodorant - the list goes on) represents thousands of dollars in cash. I can tell you that if his widower moved a pile of paint cans to find a few bundles of $20 bills, she would be ecstatic. Moving a pile of paint cans to find another hoard of hand lotion? Not so much.

The truth about life is that the unexpected happens. This kind of hoarding behavior is seen by the hoarder as a hedge against bad times. Unfortunately, it is just the opposite. If he had saved all that money in an interest-bearing savings account, it's possible that his widower might not need to be selling their house right now.

Even if you discount the possibility of a sudden death (car accident, heart attack, cancer), everyone can experience a sudden change in their situation. If you lose your job, or have to move across the country, or have a baby, or your house burns down, you would be sorry to have sunk all of your money in 50 boxes of Life cereal.

Liquidity - such as money in a savings account - can be used to buy groceries OR pay the rent. You never have to worry about how you're going to re-sell it. It's always there when you need it, and it's portable as all get-out.

Using coupons is great, and I wholeheartedly encourage it. But if you're stockpiling more than about six months' worth of something, you are making a big mistake.