Two values in one variable

Let's say you have two small values that will never get past 10, and you use the first four bits of a char for the first var and the last bits for the second var. Do people do that?

>>4
If it's even slightly speed-critical, optimize your memory use instead.
How would you do that then? It makes sense to me to use bitflags when, say, programming a game for an embedded system such as the DS, but pretty much everything is speed-critical then.