I have been reading a number or articles and blog posts about saving money by having a change jar in your house. The basic premise is that when you come into the house you immediately get into the habit of putting your change into a jar and then you can use that money later on down the road for anything you want like a dinner or a vacation.
While I agree that a change jar or piggy bank can help in saving money I think that the basic premise of holding onto that change for a rainy day or for a trip is flawed. If you want to save money with a change jar then I say spend that change every month and you will save money.
Your money in your change jar is not earning you any interest. It is just sitting there doing nothing for you. Instead of spending it you are going to the bank or an ATM and you are pulling money out every week that is earning your interest. You are doing this because you think you are saving money by throwing that change in a change jar. The whole idea is flawed.
Here are two things I do with my change that help me save money. I roll it up every month, cash it in and you that money for my spending money or pocket change every month. The number of times that I have to go to the bank or an ATM has dramatically decreased thus allowing me to save my money in the bank and earn interest on it at the same time.
In Canada we have one dollar and two dollar coins. I keep these separate and use them to buy my coffee every week. That way I am not always breaking ten dollar bills and going right back the bank machine to take out more. I do the same with quarters. I throw them in my car ashtray and end up buying at least a coffee with them once a week. I saved breaking a five or a ten and my money stayed in the bank.
I golf a lot. It can be expensive buying beers or paying off my buddies for the games we play on the golf course. I throw all of my change from the golf course in my golf bag and save it in there. It doesn’t take long to build up and I can pull enough out to pay for a beverage, rent a golf cart or buy some golf balls. By doing this I am not putting items on my credit account and I am not using the ATM as much as I would normally.
Your change can save you money but squirreling it away is not the way to do it. Cash it in each month and use it for your spending money the next month. You will find that you will keep more of your pay check in the bank and save money.