How To “Change In” Your Ways
There’s an old saying that coaches love to utilize when they find their sports team struggling. It’s called “back to basics.” To go “back to basics” in your financial life you must return to your first bank, the piggy bank. The piggy bank could always be counted on. The piggy bank never got “too big to fail” like all those other banks. I am proud to say that I still own a piggy bank. Although, at 24, the brightly colored pig has been replaced with this cooler, oversized, thick martini glass. However, the aim is the same: to save loose change.
If you don’t have a designated place for your change, you need to make one, and the couch cushion does not count. I have my aforementioned martini glass, and this oddly shaped rubber thing in my car console. For those who deal frequently in paper money, you will find your coin mountains build rather quickly. For those who make only electronic transactions, you may find that keeping a store of cash (i.e. $75 a week) may help curb general spending habits. As always, if you are not using a tool like mint.com yet, you need to hop on the bandwagon. Once you have accumulated a nice reserve of coins, you need to get out the rolling papers. Banks may provide you with rolls for free if you ask; otherwise the dollar store is a great place to pick some up. Once you’ve obtained rolls, spill the change on the floor, put something good on television, and get to rolling.
What To Do With Your Change
The next question is where to allocate your assortment of rolled change. The best strategy is to roll them right into a savings account and forget about them. Preferably a savings account that can be partitioned into various mini-accounts, and that has a superior interest rate. If you still don’t have a savings account, see a previous post on three reasons why you should open a savings account. Whatever you do, do not get tempted by the Coin Star machine! It is not worth the 9% “counting fee” to cash in your change directly at the grocery store.
Saving change may seem trivial in the pursuit of wealth. It may seem tedious, and it is by no means as glorious as the concept of other investments. Although, I do know a family that took a vacation entirely on Zephyrhills water jugs filled with coins (they owned a restaurant). On the other hand, I have a savings account for loose change that has swelled to a mind-blowing amount of $281 dollars in less than 2 years! Ok fine, so that’s not exactly an epic gain, but it shows that forming a habit like this in your twenties can save you a little money over time. Most importantly, it gets you “back to basics,” and establishes a mode of thinking. A mode of thinking that leads you into the mindset of a great investor.
Kevin’s Note: I also have a “saving change” program implemented. I have a large beer mug I took home from Germany many years ago that is not used as the “change jar”. It really is amazing how the coins add up. Every time I cash in the jar, I’m easily over $100!
A regular contributor to 20smoney.com, John is a 20-something that resides in Orlando, FL with aspirations in writing, entrepreneurship and investing.