Saturday, February 13, 2010

Coupon comeback

Over at the Wall Street Journal, Brett Arends was writing about the new popularity of coupons ... here in the U.S., we redeemed 3.3 billion coupons last year -- a 27% increase over last year. Average savings, $1.44 per coupon. (I admit to being a bit puzzled about this figure ... even with double coupons.)

On the surface, not a big deal. But he points out something that most frugalistas seem to understand: Even the small economies add up.

How long does it actually take to clip and use a coupon? .... 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'. Hourly rate: $86.40.

Furthermore, money saved comes with an additional benefit. Unlike the money you earn at work, it is tax free.

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

Something he doesn't mention: Saving $5 or $10 on a week's groceries also means I can make that money work for me by earning interest (even with the puny rates) in a savings or investment account. Admittedly, there's usually tax on those earnings. But at least I don't have to battle traffic to go make that $$, LOL!

And for real entertainment value, flip over to the comments. The pro and anti-coupon forces are putting up quite a fight. Who knew that these little bits of paper could spark such passions?

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