Simple frugality by the hourly rate
Posted
Feb 01 2008, 10:39 AM
by
Karen Datko
This post comes from Trent Hamm at partner blog The Simple Dollar.
Quite often at The Simple Dollar, I'll suggest a frugal idea, like rewashing Ziploc bags, and inevitably someone will complain that I'm a "cheapskate" and that I should "get a life."
I usually find such comments amusing, simply because those individuals aren't looking at the bigger picture. One instance of frugality doesn't save you very much, but when that instance doesn't take much time, the effective "hourly rate" for frugality can be impressive.
Let's take a look at that Ziploc issue to show you what I mean. Let's say that a new Ziploc bag costs 20 cents, roughly appropriate based on the many varieties and quantities you can buy. (We like two-gallon freezer Ziplocs for meal storage, and those are far more than 20 cents, but the sandwich bags are much less.)
Now, let's say I need one of those bags. It takes me about six seconds to dig a new one out of the box and about 12 to grab a used one and clean it. That means the time cost of washing and reusing a Ziploc bag is six seconds. That six seconds saves me 20 cents.
For most people, that six seconds versus 20 cents doesn't seem impressive, but let's say you make a habit of it and you find yourself washing and reusing two Ziploc bags a week. After 300 weeks (six years), that's about 600 washings, totaling about an hour of extra time used. Each of those 600 washings saved you 20 cents. Thus, the total hourly rate for washing those Ziploc bags is $120.
That's $120 for one hour of work. Most of the people who look down their noses at washing Ziploc bags would jump at that pay rate.
However, it is important to note a few caveats:
That hourly rate is usually spread out over a long time. You work a tiny sliver of that hour at a time and thus are "paid" a tiny amount of that hourly rate at a time.
It doesn't work well unless you make it part of the routine. Since we often use Ziplocs, we wash them and put them in a drawer instead of throwing them away, then retrieve them from the drawer when we need them. We add new ones only when the old ones start to degrade.
It's often hard to figure out how much you're saving. I estimated a fair amount on the Ziploc numbers above. Since we use a lot of the two-gallon freezer bags, which cost about 34 cents a pop, I think our hourly rate is somewhat higher. It's also often hard to figure out how much time you have to use to be frugal. Many people forget to subtract the time that you'd invest with the "normal" way of doing things from the "frugal" way, and they also don't accurately estimate either time.
What other things can be done for a high hourly rate at home? I spent some time estimating the hourly rate of several tasks and here's what I found.
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Can recycling. In Iowa, we have a 5-cent can recycling program. We toss our cans into a separate container (no extra time) and redeem them in a redemption machine about once every three months. The average redemption takes about 10 minutes and we get back about $8 or so, giving a rate of about $48 an hour.
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Coupon clipping. I spend about 15 minutes each week leafing through the coupon section of the Sunday Des Moines Register. On average, I clip coupons worth $4 off stuff we actually need. Thus, my rate for coupon clipping is about $16 an hour, which is great considering it's a lazy Sunday morning activity at the breakfast table.
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Leftovers. I might spend five extra minutes in the evening prepping leftovers to take to work the next day. It doesn't take any longer to heat and eat leftovers than it does to order delivered food or go out to eat (costing about $7 a pop), so my rate for the leftovers is $84 an hour.
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Making my own hot chocolate mix. Winter is upon us, and that means a giant jar of prepared hot chocolate mix is in my future. I could buy mix from the store at a cost of about a quarter a cup, or make my own at home for about 10 cents a cup in about 15 minutes. (I like to shave down bars of dark chocolate for our mix.) Let's say a batch of mix will make 30 cups. I save 15 cents a cup, and a batch saves about $4.50. Thus, my rate for hot chocolate mix is about $18 an hour.
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Sewing. I can handle a lot of minor clothes issues, like replacing a button on a dress shirt or fixing a broken zipper. If I can do that task in 10 minutes and it extends the life of a $50 shirt again by half -- meaning I save $25 from the stitching -- my rate for sewing is $150 an hour.
Frugality might seem silly at first, but if you apply it to things that are part of your life routine, that you will do over and over again, it can be very lucrative by the hour.
Other articles of interest at The Simple Dollar:
"Maximizing that hourly rate: Figuring out how to best utilize my working time"
"
10 simple ways to beat impulse buying" "Your money or your life: The American dream on a shoestring"
