Over the weekend, I was thinking about the Entertainment Book. If you aren't familiar with it, you've probably been living under a rock for the last 30 years. It's a book that has a lot of coupons, often of the buy one, get one free variety towards, as the name implies, entertainment activities. When I was child (we are going back over 25 years here), my parents would get the book and often use the coupons at restaurants. I was amazed at how a simple $25 purchase seemed to pay for itself in just one or two meals... and we had hundreds, perhaps thousands of coupons that we could use.
It seemed like we easily saved hundreds of dollars a year. Did we really though?
Before I get my answer on that, let's look at the restaurant's perspective. The reason why any establishment offers coupons is no big secret, they want to bring in more customers, even at a lower price. Restaurant margins when they get a customer in the door are particularly good, so even the buy one, get one free deals are profitable for them. That's especially true if they can convince you through their good food and service to come back and pay full price. My eight-year old mind relished in the fact that we were somehow beating the system, getting a deal.
My 35-year old mind, definitely has a different perspective.
It is very easy to look at these coupons as saving money. Both Entertainment Book and Groupon offer discounts that seem rather large - 50% or better. The cost comes in when the deals lure you into buying more than you normally would. Even getting 50% of every restaurant meal adds up with drinks and/or taxes and tip included. It can easily cost $25 for a dinner for two (even if you are trying to save money at restaurants). It might not be as fancy, but cooking at home is just a fraction of the cost. We have to factor that into the big picture of whether we really "save money" with these coupons.
I think my parents had it right. They used the coupon book every 2 or 3 weeks on meals out that we generally would have gone out for anyway. Rather than have one particular "regular" restaurant, we went to new ones. In some ways that bit of mystery of trying a new place added to the adventure. As a child, I wasn't included into any budget discussions, but it now occurs to me that whether my parents had a formal budget or not, the use of the Entertainment Book was worked into it.
When I look at whether these deals actually save money, I have to measure it in terms of sticking with-in a budget. If you are using the deals to lower your restaurant expenses or stretch that budgeted dollar further then you are saving money. If the deals become an excuse for lifestyle inflation, you may be better off without the temptation.
What do you think? Let me know if the comments below.
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