Earn $100 an hour -- clipping coupons

If you think going through fliers and finding discount offers just isn't worth your time, do the math. Coupons are back in fashion, and for good reason.

[Related content: savings, save money, coupons, online shopping, groceries]

By The Wall Street Journal

Clipping coupons hardly sounds like the subject of high finance -- or even medium finance.

Save a dollar on cat food, some detergent or a couple of boxes of cereal. Who can be bothered? Who has time?

Easy grocery coupons

A growing number of people, it turns out. And they're shrewder than it may at first appear.

The Great American Coupon is making a big comeback, thanks to the Great American Recession.

We redeemed about 3.3 billion coupons last year, a remarkable 27% leap from 2008 and the first annual increase in 17 years, according to a report issued at the end of January by Inmar, a coupon-processing agent. Online coupon use skyrocketed: Companies issued twice as many as in 2008, but redemptions rose 360%. The big upturn began in October 2008, just after Lehman Brothers went belly up.

It's easy to see why coupons had fallen out of fashion for so long -- and why so many consumers still ignore them.

You have to make time to visit a coupon Web site or collect the fliers from your mailbox, the supermarket or newspaper inserts. You then must sort through to find the ones you want, cut them out, stick them in your purse or wallet -- and remember to use them when you are at the cash register and trying to remember whether you bought everything on your shopping list and where you parked the car.

Average saving per coupon: just $1.44, according to the Inmar report.

But let's treat this low-finance topic for a moment the way we treat high finance. Let's subject it to the same math.

How long does it actually take to clip and use a coupon? Certainly the more you use, the less overall time you will spend per coupon, because so many of the costs -- getting fliers, sorting coupons and so on -- are generalized. Let's assume you spend a minute per coupon.

Saving $1.44 for a minute's effort is the equivalent of saving $14.40 for 10 minutes' work.

Hourly rate: $86.40.

Maybe this would be a good time to point out that the typical American working stiff -- anyone lucky enough to have a job right now -- climbs out of bed each morning, goes through the miseries of commuting and endures the daily grind at the workplace for about $20 an hour.

Furthermore, money saved with coupons comes with an additional benefit: Unlike money earned at work, it is tax-free. There are no payroll taxes, no federal or state income tax.

If your marginal tax rate were, say, 20%, you would have to earn $108 before tax to take home $86.40. If your marginal tax rate were 30%, you'd have to earn $123.

Few of us ever do this kind of math, because we tend to treat low finance differently from high finance and small sums differently from big ones. No wonder, even today, 99% of coupons are thrown away unused.

Yet finance isn't separate from the rest of our personal lives. For all of us, our scarcest resource is time. Putting the right value on it, and putting it to the most productive use, is a financial challenge as well as a personal one.

The individual amounts of money may seem small, but they prove the adage about tiny acorns and mighty oaks. Someone who saves $25 a week will save more than $100 a month and $1,300 a year. Over a lifetime that can easily grow to $100,000 or more, even after accounting for inflation.

If motivation is an issue, the next time you find yourself facing a stack of coupon booklets and fliers, don't ask yourself if you can be bothered. Try asking yourself if you'd like to earn more than $100 an hour for a job you can do at home -- while sitting on the sofa watching TV.

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