True Value of a Coupon  

In order to determine the true value of a coupon, you must evaluate what it takes to recover that amount of money. At first glance, it seems like an easy task. If you make $10.00 an hour, then a $5.00 coupon is worth half an hour of time, correct? No, not really … let’s look at an example: 

Anne (a real person in a real company whose name has been changed) makes $10.00 an hour and works 40 hours a week. Her weekly pay check, because of taxes, is $324.40, or about 81% of the $400.00 in “gross” wages she earns. 

So, Anne’s “net” hourly wage is about $8.11 an hour. Now, let’s look at that $5.00 coupon again. How long does it take her to “recover” that $5.00? Five dollars represents 37 minutes of Anne’s $8.11 hour. That is 23.3% more than the 30 minutes we calculated in the first paragraph. (Remember the 23.3%, because it’s important.) 

What does this mean? It means that the $5.00 coupon is really worth atleast 23% more than what is shown on the coupon itself.Because of taxes, anytime you save money, you receive this added benefit.    

Money managers on Wall Street are considered “great” if they deliver consistent annual earnings of 12% to 15%.In a low tax bracket, you can earn20%-plus on your money, andmore in the higher tax brackets.  

This simple example shows the true value of clipping coupons.