Save 10-15% on your annual grocery bill AND fund your ROTH IRA!

Sprouts Farmers Market is selling gift cards at 90 cents on the dollar this coming Wednesday 11/4/2015 (traditionally this promotion happens once a year on the first wed. of November.)

So let’s say your household grocery bill is $400/month, you can open a new credit card, buy 5k of Sprouts gift card for the year’s grocery. While you pay for your grocery throughout the years with the pre-paid AND Discounted (10% off) gift cards, you can funnel that $400/month towards a ROTH IRA!

Pros of buying a year worth of grocery NOW on a credit card include,

1. Your grocery is automatically discounted at 10% with the gift cards you buy on 11/4/2015 (once a year promotion).
2. If you use a card like citi double cash back, you make additional 2% cash back, which means you really are getting approximately 12% discount on all your shopping at Sprouts.
3. During the 0% interest rate promotion of a new credit card, you only pay 1% of the revolving balance per month. Let’s say you buy 5k worth of gift cards on citi double cash back. You get to ride the 5k balance interest free for 15 months while only paying about $50/month minimal payment.
4. Each month, instead of paying $400 for grocery, you only pay $50 towards the minimum payment. This frees up $350 cash flow each month to fund your ROTH IRA. Remember, ROTH space in your training years are incredible deal because it combines the power of TIME VALUE of money & low tax brackets.
5. You can even utilize other cards that have rewards that better suit you. For instance, certain cards such as SimplyCash® Business Card American Express gives you $300 cash back after first $1000 spent and at least 12-15 months interest free too. You an see how much additional cash back/benefits/mileage etc. you can rack up with buying your grocery a year ahead!

Cons of buying your grocery using gift cards pre-paid with a interest free credit card.

1. You do need to make minimum payment to your credit card monthly, generally 1% of your revolving balance on that card.
2. If your credit card limit is about 5k and you carry a balance around 5k, this may ding your credit score a bit.
3. You do need to come up with the funds in 15 months to pay the credit card off. (It is quite easy though. Balance transfer checks are coming in the mail weekly offering 1.3-2% interest when you pay off a credit card with one of these checks.)

I’m definitely heading to Sprouts to buy my annual worth of groceries. How about you?