Idea for Saving: Put Your Change in "Savings" Every Night

If you're like me, you have loose change laying all over the place -- in my desk drawer, in the kitchen area where I keep my briefcase, in the pantry (our "official" change collection site), on my bedroom dresser, in my car's ash tray, etc. It's not a lot, probably $30 or so at most, but this it can add up if you save it purposefully. And that's what one Indiana man did. He saved up his change -- enough to buy three cars over 36 years. Here's the story:

Brant began saving all his change when he started his own family. For 23 years he emptied his pockets into containers around his house. Then, he decided it was time to spend it.

"I wanted a new truck, and when I realized how much I had saved, I went ahead and decided to buy a car for my wife, too," he said.

He had saved approximately $36,000 in change. But Brant wasn't surprised. "As long as you don't put your hands back in the till, it really adds up," he said.

It was 1994 when Brant purchased a Dodge pickup truck and a Dodge Neon with his savings. He had all of the quarters rolled, drove them to the dealership and paid for his new vehicles.

He did it again on Friday, 13 years later.

I must admit, this is a very "creative" way to save. But I'm not sure it's for me. For one thing, what about the interest he missed out on? Yeah, it's not a ton, but it would have certainly added up given the fact that the time period was so long. And for another thing, I don't have that much change anyway. I pay mostly by credit card or check -- cash is probably my least-used method of payment.

How about you? Anyone out there use the "change" method of saving money?

Comments

[claymeadow]

been doing this for years. instead all loose change gets funneled into the kids banks and every six months or so it gets counted and divided amongst them. as a bonus it's a nice way to teach the basics of money to the little ones; coin names, values, saving versus investing, invisible inflation tax, and so on.

[That One Caveman]

We drop every bit of change we get (except for what we need to keep in the car for occasional parking) into our daughter's piggy bank. We empty it out fairly regularly; every time we drop a coin and it doesn't sound like it's hitting ceramic, we dump it out. When that time comes, we usually roll up about $30 in change and deposit it into her savings account. We're literally going to nickel and dime her to college! :)

[mjmcinto]

I don't use cash too often, but I do on occasion. When I do, I make sure I have a few quarters at the office for the occasional time when i want to buy a coke there. Otherwise, it just goes into a cup on my dresser. It takes a long time to add up, but it does. I usually wind up buying stamps out of the machine with it since by the time I've saved up enough change to buy stamps, I typically need them ;) Occasionally I'll have a decent amount left over after a stamps purchase, so I put it in the bank.

[Gatorzone]

This can be a very good thing to do. My Dad has been doing this for many years, and ends up using the money for trips we take as a family. I was amazed at how much he had accumulated. While this sounds like a good idea, I also encourage people to regularly deposit the money into an interest bearing account. I myself tend to use plastic whenever I can (note that I pay off my credit cards every couple of days to try to keep the balances at $0 for credit score purposes). This enables me to (1) have a record of where all of my spending is going (tougher to do with cash), and (2) leverage my money by using someone elses money for even a short period of time, while my money earns interest for me.

[Kevin]

I use credit cards for about 99% of my purchases, so this doesn't really apply to me. However, I have been taking my "loose change" in the form of Chase Freedom dividend checks, expense checks, etc and putting them into our "Ireland 2009" savings account. By then I'm hoping it will almost pay for the trip.

[Scott Moonen]

If you keep close tabs on your expenditures in a tool like Quicken, there is a way that you can simulate a loose-change piggybank. First, create a rolling transaction in your checking account dated a month in the future and with a category of "Loose change". Every time you enter a transaction, determine how much change would be required to take you to the next dollar. For example, if your grocery bill is $92.73, your "change" is $0.27. Add $0.27 to your rolling "Change" transaction to set it aside for investment and make sure it won't be spent. Then, once a month, take all the money you've set aside as "Change" and move it to your savings account or some other investment vehicle.

I haven't tried this yet but it's pretty tempting and I might do it at some point.

[Jake]

Marotta Asset Management would likely argue that your piggy bank full of change was too "risky" of an investment, and that as a safer alternative you should buy stocks in gold mining companies, or prehaps some emerging markets bonds.

http://www.freemoneyfinance.com/2007/12/cash-has-been-t.html

[David]

He saved $36,000 over 23 years, which means EVERY DAY he accumulated or found an average of $4.29 in change. Does that sound realistic?

[Outdoorgrrl]

Interesting idea - IF you use cash on a regular basis. The amount of change that adds up over time, when you mostly use a debit card, wouldn't amount to a car for a very long time. If you DO use the change-pot saving system, make sure you keep that pot in a safe spot. Ours has been emptied by thieves on the two occasions our house was broken into.

[rdub98]

I started saving all change about 10 years ago. Unfortunately, I ended up spending most of it after cashing it in several times, but over the past several months, I empty it out, count it up and split it between mine and my wife's savings accounts. She doesn't know I do this, so it will be a nice little chunk when and if I ever get around to telling her, or she checks her account balance. We made a pact that if we stay on budget this year (for the whole year), then we can take a trip to Ireland in 2009 which we have wanted to do for a long time now. I'm hoping that my change saving will facilitate that.

[msd]

I would consider Brant a dumb fellow ... he lost a lot to inflation when he let that cash sit in the jar (insted of earning interest from bank).

I use CC everywhere - so no change residue.

[Jennifer]

We actually used our change to pay for our wedding 3 years ago. My mom started us on it. She always saved up her change and never spent it and she would have a couple hundred dollars when she would count it. It was her 'emergency' fund. We had a big wedding, better than my dreams, and when all was said and done, the change paid for the wedding and we didn't incur any new debt as we started our new life together. We continue to save the change and roll it once in a while and buy something one of us wants or needs, like a piece of electronic equipment, or gas money for a trip, or to pay for small things we need around the house. It's true, you really need several years in order to save up a bunch, unless you use cash every day and have change every day, but it does come in handy for small emergencies.

[Hawkmoon Nine]

Our cash change doesn't add up to much anymore, I used to do stuff like that back in college when I was a bartender (getting cash tips and paying for a lot in cash as a result). Also, I would put fives and tens and twenties in the jar as well.

Bank of America has a "Keep the Change" program where they round up your debit purchases and transfer it to your savings account (so if you spend $1.87 on something $0.13 gets transfered). It usually is around $15 a month for us. And at the end of each year they give you 5% of the total (they gave us a 100% match for the first 3 months, but I don't know if they're still doing that) it was $8 this year IIRC. I wish my wife had this when we lived in Atlanta and she went out to eat every day for lunch, now THAT would have been a lot transfered :)

[Zook]

Hawkmoon-

I use the 'Keep the Change' program with BOA as well. Last year we got $350+ placed into our savings account at %4+...

And to boot, every time we balance the check book, we are only using round numbers :o)

And they matched 5% as well. I love filling up the tank and putting in $24.01 with the .99 going to the savings. My wife and I make a game of it. We leave that extra penny on tabs at restaurants. Basically every time you buy something, you are setting aside "something". And no, we don't spend more because of the plan.

I think this example is a bit inflated. No freaking way this guy had $36K in coin in his house. And after 23-years he's going to go buy a "truck"? That is the exciting finale to saving $36K for 23-years? Different strokes for different folks.

[M The Tender]

I'm not saying it was the wisest use of his money, but it is quite possible to save that money in change over 23 years depending on your profession. As a bartender I accumulate about $5,000 worth of quarters a year, and although a periodically deposit them into high-yield savings accounts, they are enough to fully fund my Roth IRA every year.

[Amanda]

Definitely. It mostly started out of necessity. My husband hates carrying around coins and began systematically dumping his pockets into a jar we had. It's great though - when the jar is full, it goes to the bank!

[Zook]

5-years? OK. 10-years, OK, but 23-years? That's roughly $1500 a year that could have been making money on-top of money. I wonder if this person was saving in outside investment accounts.

$1500 a year and lets just use 1985 as the starting year. Buying just about anything in 1985 and adding to it would have made this person more than putting it in a can.

If this person was head strong to not spend the money for 23-years, he would have been just as head strong opeing an account "somewhere" and placing the money in once a year.

[Kevin]

Scott @ 12:10 - that is an interesting idea, I may try that for our vacation fund. Maybe I'll go back to December and see what the net "savings" would have been had I round everything up to the next $.

[Greg]

I, too, have habitually put my change into a jar. Unfortunately, it doesn't add up too quickly for me. Eventually the jar is full and I'll cash it out to the tune of $30-40, but that's usually after a few years. In fact, we once had to use the change jar to buy our wedding license.

It's nice to have a spare change jar, but I think that this is a bad way to save money. First, as others have said, you earn no interest until it's in the bank. But more importantly, if you constantly have change in your pockets, then that means you're always constantly spending cash every day.

We're finally making some progress on our finances because we have consciously stopped that kind of spending, and to be proud of all the money you saved while spending money on other things seems to be a bit paradoxical.

[Greg]

Also, I just ran some simple numbers. If he collected up all of his change every month, and deposited it into an account that yields 5%, he would have had $66,584 in 23 years, almost twice as much as he had. No, I think this is a lousy way to save money.

[BradM]

Contrary to what any of us believe, Brant found a way to pay, for a car, in cash! Not many people I know has done that. Granted he could have made more money putting the coins into a savings account, but he also saved 6% over the next 5 years by paying for the vehicles in cash, now!
My wife and put the spare change in the savings account.
And when we start having kids, it will go to the kiddy fund!

I would have to agree with mostly everyone on here. Who keeps 36 grand in there house anyway? Change or paper currency it is just a bad money decision. On top of not earning any interest he then goes and buys a new truck which is just going to depreciate to the point where his years of saving is worth just what he loves so much , pennies. On the other hand it does show how little amounts of money can add up over the years. Imagine if he would have add 1 dollar or 5 dollars bills. I could not sit and watch the purchasing power of my money evaporate like that. I think I would rather try to build a fort out of pennies for my kids then we could have fun with wasting our money.And for the kids Imagine that piece of real estate in 20 Years.

[Jo]

I do this, I put all my change in a jar. I out grew my first jar so I got a bigger one. I also put 1 or 5 dollar bills in there occassionally, (I figure if I forgot about it in a pocket...then I might as well put it into my "savings"). I purposefully will almost always pay with bills when I pay cash just to get the change back. Once my jar is full, which will hopefully be soon I'm going to cash it in and put it into my vacation fund that I just opened with ING. It's definitely not the best way to save, but it is fun and a no-brainer way to have a little extra. It gets exciting when you can physically see it grow.

[Foobarista]

Many banks charge money when taking coin deposits. Fortunately, my CU has a free-of-charge coin counter (as long as you have a combination of $5K of accounts with them). We take our coins in about twice per year and deposit about $50 each time.

Fortunately, my CU has a free-of-charge coin counter (as long as you have a combination of $5K of accounts with them).

What, do they check your balance(s) when you bring in coins>

[Teri]

I never really got the whole change thing. Because we don't use cash.

Seems like we do far better to leave all those pennies in the bank in the first place. Earning interest and all.

Just my perspective, something always lost on me. If you don't take the cash you don't need out of the bank in the first place, then you don't have any change to save. ;)

I have never financed a car either (because I don't leave change laying around everywhere I guess. Hehe).

One thing that we do, since we very rarely use cash, is now whenever we receive a cash gift - we pop it directly into savings. We used to splurge it on extras. Stuff like that does add up. So I do get the whole penny saving thing. Just doesn't make sense for a lot of us.

[Jess]

I've had a lot of success doing this. I got so excited when they finally brought the Coinstar machines to Canada. Since we have loonies and twonies here, my change accumulates faster. Since the bank will take the 1/2$ coins, I bring those directly into the bank, instead of taking the 10% hit. I don't always throw them in with the rest of the change (since it is a fair amount in change sometimes) but my rule is that one "big" coin of the pocket of change has to go in.

Since I've started doing this over the last 4-5 months or so, I would say I've gotten about 100-120$ in extra cash. Then again I pay everything cash. My change jar took a bit of a hit when I changed over to a gift card for my regular coffee, but I still save my change.

The rule is that half goes towards debt repayment and half goes towards savings. It doesn't always work out that way, but that's the theory.

[Don]

I think this is a ridiculous way to save. I never have more than a couple of dollars of change at any time. Why? Because I always try to pay with exact change or as close to it as I can. It's not that hard, and cashiers really appreciate it. They're often short of coins because of silly people like Brant from Indiana!

[Frugal Dad]

I remembering hearing a story from Neal Boortz once around the time his daughter graduated high school. He had saved every single dollar bill he came across (except a few held out for tips, etc.) and put them in a dedicated savings account each week. When his daughter graduated high school he presented her a specially made box with 1,700 dollar bills that he had saved over the years. He said her and his wife made fun of him unmercifully for years for being so adamant about saving his dollar bills, right up until the time they opened that box. Just goes to show that small savings really do add up over time.

[thisisbeth]

I hate carrying around change, so I put it all in a piggy bank. When it's full, I plan on taking it to get counted, and putting that money in my "new car fund" account. Except quarters--they come in too handy for parking meters, laundry, and pop machines. I don't use cash often, so this will take time.

I like having change so that I can make exact change when I need to.

It's not easy dealing with a large jar of change, and I don't want to.

You can save more change by making more purchases, but that doesn't seem like a good idea.

All that said, if you're the type to spend whatever you have, this idea may help you save money you wouldn't otherwise save. And when the stock market drops, you can always joke with your friends that your jar was a good investment.

Also, I save quarters for machines and quarters and dollars in case I'm eating out with others several times in a week, I can easily pay my share every time without needing change. Also, I can raid that cash if I forgot to withdraw money.

Mostly I use credit cards that pay cash back (1% or sometimes 5%), and as soon as I qualify, I get the check and deposit it in my bank. So that's how I save change, but it's the change of my credit card company.

By spending most of my change as I get it, it never builds up and gets heavy and it means I withdraw cash from the bank less often.

[John]

Here's an idea. If you already spend money on Amazon, you can go to those Coinstar machines and get an Amazon credit, with no money taken off the top. 100% of it converted into a credit.

If you know you're going to order something anyway, just go dump your change and get the credit. You can even then avoid having to use a credit card to pay for the order if you saved enough.

I do this about once or twice a year.

[Ryan]

One point to add is if you do stash your change away for savings, it may work for some people becuase then they will not be likely to spend it. You can have a savings account where you can see the money in every day and be likely to dabble. That is why I feel this technique is helpful to some.