Quite often on The Simple Dollar, I’ll suggest some specific frugal idea, like rewashing a Ziploc bag, and inevitably someone will complain that I’m a “cheapskate” and that I should “get a life.” I usually find such comments quite amusing, simply because these 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, either, the effective “hourly rate” for frugality can be impressive.
Let’s take a look at that Ziploc issue more specifically to show you what I mean. Let’s hypothetically say a new Ziploc bag costs $0.20, roughly appropriate based on the many varieties of Ziploc and the quantities you can buy (we like two gallon freezer Ziplocs for meal storage, and those are far more than $0.20, but the sandwich ones 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 twelve to grab a used one and clean it. That means that the time cost of washing and reusing a Ziploc bag is six seconds. That six seconds saves me $0.20.
For most people, that six seconds versus $0.20 doesn’t seem impressive, but let’s say you make a habit out of it and you find yourself washing, say, two Ziploc bags a week and reusing them. After 300 weeks (six years), you will have washed about 600 Ziplocs, totaling about an hour of extra time used. Each of those 600 washings saved you $0.20. Thus, the total hourly rate for washing those Ziploc bags is $120.
$120 for one hour of work. Most of the same people who would look down their nose at washing Ziploc bags would jump for that kind of pay rate.
However, it is important to note a few caveats:
First, that hourly rate is usually spread out over a long time. You only work a tiny sliver of that hour at a given time and thus are only “paid” a tiny amount of that hourly rate at any given time.
Second, it doesn’t work well unless you make it part of the routine. Since we use Ziplocs so much, we just wash them and put them in a drawer instead of throwing them away, then retrieve them out of that drawer when we need them. It’s part of our Ziploc use routine – we only add new ones when the old ones start to degrade.
Finally, it’s often hard to figure out discretely 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 $0.34 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 that well. I timed things for this post just to figure it out, for example.
What other things can be done for a high hourly rate at home? Obviously, any effort put towards trimming your monthly spending automatically will be absolutely great, but I’m looking beyond that to active things you might do to save money. I spent some time estimating the hourly rate on several tasks and here’s what I found.
Can recycling In Iowa, we have a 5 cent can recycling program. We simply 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 ten minutes and we get back about $8 or so, giving a rate of about $48/hour.
Coupon clipping I spend about fifteen minutes each week leafing through the coupon section of the Sunday Des Moines Register. On average, I pull out $4 worth of coupons for stuff we actually need. Thus, my rate for coupon clipping is about $16/hour, which is great considering it’s a lazy Sunday morning activity at the breakfast table.
Leftovers I might spend five extra minutes in the evening prepping leftovers to take to work the next day. When there, it doesn’t take any longer to heat and eat leftovers than it does to order delivered food or go out and eat (costing about $7 a pop), so my rate for the leftovers is $84/hour.
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 I could make my own at home for about ten cents a cup in about fifteen minutes (I like to shave down bars of dark chocolate for our mix). Let’s say each mix will make 30 cups, and I save $0.15 a cup, a single batch saves about $4.50. Thus, my rate for hot chocolate mix is about $18/hour.
Sewing A lot of minor clothes issues can be handled with sewing, like replacing a button on a dress shirt or fixing a broken zipper (I don’t tackle anything too complicated). If I can do that task in ten 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/hour.
Frugality might seem silly at first, but if you use it on things that are part of your life routine that you will do over and over again, simple frugality tasks can be very lucrative by the hour.