Saving up your change...does it work?

I have a friend who puts all her change in a jar each night. She puts all coins including any $1 or $2 coins that she has in her wallet at the end of the day. She saves up this money and uses it to buy wish list items and claims that she is able to afford to buy these things because of her system.

I say that it doesn’t work because you end up spending money anyway. If you have 10 dollars, buy something for 1 dollar, get all coins in change, and put these coins in your jar the next day when something costs 10 you go to the bank and get money out. If you had the change you would have spent it and not gone to the bank.

Does this method of saving really work?

Yes it does. It is the same reason that automatic withdrawals taken from your bank account are one of the best ways to save. The reason is that you don’t miss money that is taken away before you start spending.

I have the same system as your friend. Most of the time, my pockets are buldging with change because I don’t spend it with normal purchases. I don’t even think of it as real money. When it gets too annoying in my pocket, I take it out and pour it into a large jar. When I want to buy something optional and feel guilty about the cost, I sometimes remember my change jar. I take it to the bank or a Coinstar machine and usually end up with $75 - $200 that I didn’t even think about. It is like a free gift.

It works for me on a small scale. About every 3 months I empty the bin and have 80 bucks.

I think the idea is it’s money you keep out of the main account and aren’t really sure how much is in there. It’s also harder to spend twenty bucks in loose change. To use the money in my change bin i’ve to take it to the bank.

Of course, I don’t look at it like extra savings. I’ve just never been an exact change kind of guy. I almost always pay with cash and almost always break a bill to do it. If I buy something for $1.10 and I know I have a dime in my pocket, I don’t use it. I just hand over 2 bucks.

Well, obviously, no, your not going to get any extra money from doing that. However, if she ONLY uses her wishjar to by wishlist items, then she has an upper limit on the amount she splurges each week.

That depends on what you mean when you say “work”. It’s definitely an effective method for spreading the cost of these “wish list” items over a period of time, even if it’s not as effective as a savings account, where you’re earning interest on the money.

However, I use a similar method to help save money. Every paycheck, I have my bank automatically transfer a small amount of money from my checking account to my savings account. I ignore my savings account when I do my budgeting, and so it feels like I’m ending up with a surplus after a year. However, it’s really nothing more than an aid to help me remember to save money, just like what your friend is doing.

So to answer your question, it works to help your friend remember to save, but it’s not like it’s generating money for nothing. She could just as easily purchase one of those “wish list” items directly, and then not put any change in the jar, and the result would be exactly the same.

My recommendation to all you jar folks is to get one of these things: Electronic coin sorter. I just empty my pockets into it each night, and every week or two put a full stack of coins into one of the wrappers I keep next to the machine. When my collection of rolled coins totals around $100, I take them to the bank.

This way I don’t have to spend hours sorting the coins by hand or pay CoinStar a usurious 10% for the dubious service of turning cash into cash. The gizmo pays for itself after collecting only $300, compared to CoinStar.

I took mine rolled to the bank the first time and they made me unroll them. Then, they put them through their own version of a CoinStar machine. All that time waster

She is quite literally ‘saving’ her money. She has it available to her and she ‘saves’ it by putting it aside. This could be an effective way to save if she is using her account to budget her normal expenses. By putting the change aside she needs to go to the bank more often to get more spending money, but as long as she is able to live within the means of the money available in her account then it will work.

That said, if she was only withdrawing the money as she needed it, she would still have some left to splurge. Putting it aside is a good way to keep your hands off it.

Shagnastys point of automatic withdrawals to an interest bearing saving instrument is sound, although at the current interest rates you would have to amass quite a bit and save it for quite some time to amount to much. Direct deposit into an RRSP or 401(k) is a prime example.

I have been saving change for the last decade or so and empty it out every couple of years. I usually have a few hundred which we cash in to help pay for trips to Britain. I have also recently started saving bills this way. If I get some bills back as change and happen not to put them in my wallet but just stuff them in my pocket, then those get put away when I clean out my pockets for laundry. I managed to afford a decent digital camera after a year.

I have had this method of saving money since I got my first job at 16 years old. I rarely spend change when I go somewhere, so it collects in my pocket until I put it into the change jar where it collects until the change jar is full.

When the change jar is fully, it gets converted into ‘real money’ that I can use to purchase something I want. I used this method to entirely fund a three day trip to Toronto a few years ago. I kept saving up change in a gallon jug. When the jug was full, I had a few hundred bucks. I used it to pay for my trip.

I just take the jar to the bank and they happily do the work for free :slight_smile:

We put aside our change (well, DH does it pretty regularly and I do it occasionally), and take it to the bank for the free coin star. We put the money in an account at that time. The small jar we use usually has about $60.00. The account has over $2000.00!

I also use automatic withdrawl and skim about 15-20% off the top of my paycheck first thing every payday. I tried doing it myself, but didn’t have the discipline. I find taking the money off up front to be more effective that trying to save what’s leftover. It’s kind of like setting your watch ahead- you know you have the extra time (or money), but can ignore the fact. I guess it’s kind of a mental game I play on myself, but it works for me.

I put the money that is skimmed off the top of my check into different accounts for different things. It is very satisfying to watch the accounts grow especially as I make very little money.

My friend had a huge change jar (an ozarka water bottle) and when she cashed it in she had nearly $1000.00! It was not full.

I also save it, and turn it in at CHristmas. I usually have like an extra $200-$300 for gifts!

Oh, and I just take it to the automatic coin sorter in the grocery store. It takes 8 % sales tax (NYS), but I can deal with that. Better than having the tellers give me the evil eye or rolling it myself.

I might consider buying that coin sorter **commasense ** recommended.

I just started saving change in a jar a few months ago. The different thing about this is that besides quarters, I consider change to be garbage. I would literally just toss change out on the ground. I still throw pennies away when I get them (I toss them into the parking lot of wherever I’m at…I hate pennies.) and I only save nickels, dimes and quarters. So far I’m about a quarter of the way up on a pretty decent sized vase. I have no idea how much is in there.

My family did this and we could save anywhere from $50-$200 in a month, depending on how faithful we were.

Plus, if you need quarters for something like a car wash or arcade, they’re always there.

Please don’t do this during my lunch hour :mad:

Back on topic… I do this, but it never seems very effective. I tend to spend coins bigger than 10 pence, so the change jar is mostly full of coppers and 5p coins. I save them for months and then… oh, I’ve got about fifteen quid :frowning:

Not even enough for a decent night at the pub.

I tried the ‘save in a jar’ technique for a little while, wasn’t too impressed. I did end up collecting around 80 dollars in the jar, most of it in canadian 2-dollar coins, which became part of my wedding gift to my brother and his wife, who were asking for cash donations. (the rest was twenties in an envelope.)

It doesn’t really seem to fit my patterns with money… I might accumulate a lot in the jar, but then I just need to go and get bills out of the ATM sooner. Most of the big things I want to save up for, (whether it’d be investing, paying off debts or big splurge purchases) I don’t want to have in little coins - I want to have the funds available in my bank account. :slight_smile:

I have developed, since then, a complicated way of dealing with change. Quarters, one and two-dollar coins get transferred regularly into my ‘laundry bag’… I do my clothes in the laundromat in the same stretch of buildings as my apartment, and the machines take quarters and one-dollar loonies, and the change machine is good with coins. (Trying to feed it bills can be a much more frustrating proposition, not to mention leaving you with a larger lump of quarters and loonies at a time.) If the laundry bag of change seems to be growing on the heavy side - more change coming in from my wallet than is getting spent on the laundry machines, then I transfer some of the most valuable coins back into the wallet.

Smaller change - pennies, nickels, and dimes, I use when I’m buying other things with cash - if the total on the till comes to $3.14, before handing over the five dollar bill I count out two nickels and four pennies and put them on top of it so the clerk can just hand me a two-dollar coin back. Either that, or sometimes I leave a tip in a lot of small change at a restaurant. :slight_smile:

Right. If I have $1 and I spend 60¢ on an item, the 40¢ I put in the jar could have been used to purchase 40¢ worth of stuff the next day. This method doesn’t net any money, but instead redistributes it.

I think it is easy to fool your mind on some things. I have my alarm clock set twenty minutes ahead because it gets me out of bed more efficiently, since the sight of the clock generates an emotional reaction even though I can do the math and know what time it really is. All my other clocks are set right on time.

I don’t think much about change, either. I really dislike it. I don’t like carrying it and I hate taking the time to root through it to get the exact penny. When I buy something for 60¢ with a dollar I toss that item into the Dollar Spent category and I throw the change into a big glass beer stein. The cost of doing so is minimal, it’s only 40¢ out of my budget. Over time these small contributions add up to significant money and I can buy something for $60 with it. Additionally, for me, getting rid of the change is a good in and of itself, so the cost of tossing the 40¢ into the piggy bank is 40¢ minus the relief of not having the annoying change in my pocket. So in that regard, 150 contributions of 40¢ don’t add up to the benefit of $60 because the displeasure of using change makes my piggy bank operation a net benefit to my welfare, even though it is not a net gain to my wealth.

(Intuitively, I just know that there is a fancy economic reason why the sum of the little pocket-change contributions is less than the big cash payout of spending the piggy bank, but I cannot think of what it might be. I think I’m probably wrong on that count.)

My sister is a change spender. This scheme would not work on her because of that.

I do the coin thing religiously. Don’t ask me why I started other than that big glass cookie jar was a convenient place to put change when I got home from work. When I roll it I usually get between $200-$300.

I also use the automatic deduction for savings. Happens once a month and goes from my checking account to another institution (where my investments are). From that account some goes to the kids funds and most to us. But the secret is that I set it up in such a way that I can’t get money out without speaking with my broker. No checks to draw on it…no ATM card to take money out…the only way I can get that cash out is to listen to my broker berate me for not saving.

It’s worked. I’ve only touched it once in 10+ years.

My mom is a “tucker”; she has tucked spare change away for years. With 4 kids and a husband contantly leaving change in pockets, she declared all money found in laundry or on the floor or in the vacuum bag was hers. Every so often, she’ll cash it in to buy gifts or go on vacation.

True story: Some friends of mine collected only silver change and bills for 7 years. They studiously never paid with exact change and all change, excluding pennies, was tucked into really large water bottles, about 4 feet tall. They filled up one or two of these a year. They finally cashed it all in and **bought ** a new car. A Chevy Malibu. Bought for spare change. :eek: Two months after buying the car, there was a knock on their door. It was the FBI, wondering where a dirt-poor country family suddenly had the funds to pay cash for a new car. (FBI thought they were money laundering.) They had to show them the jars, which were already beginning to accumulate change. The FBI finally believed them and left.

It works for me, too, because I’m not a disciplined “saver”.
When I receive my paycheck, I round down to the nearest $50, and that’s what I deposit into my checking account. The rest (maybe it’s $2, maybe it’s $42) goes into savings. I’m not a disciplined “spender”, either, so I pay for the little day-to-day stuff with the bills in my pocket (ignoring the coins, so that they accumulate). At the end of the day, I dump those coins into a jar. When the jar gets full, I drop it off at the bank and ask the teller to deposit it in my savings account.
I don’t even consider the “leftovers” from my paycheck or the coins that I bring in as money. If I did, they would be spent and gone.
It’s working for my savings account, so far. Maybe I’ll be pleasantly surprised in a few years?