A Penny Saved is a Penny… Saved

January 5th, 2009 by Matt | Posted in Save Money

Want to know a quick and easy way to save money?

Keep a piggy bank.

That’s right… just like you did when you were a kid and had no financial worries in the world. Simply find a container that is lying around the house, unused, and put it to use. I use a sugar jar (which hasn’t actually contained any sugar for probably about 2 years) to collect my spare change.

Many people will scoff at this idea, believing that you can’t actually save any real money using this method. Well, guess what? I save at least $10 per month this way. That’s $120 per year for doing NOTHING; certainly nothing to laugh at.

How do I collect so much change per month? It’s easy. Every two weeks (after my paycheck is deposited), I withdraw about $150 to use for entertainment, according to my budget. This $150 is subsequently used for all my entertainment needs during the following two weeks.

And here’s the secret: anytime I receive spare change for an expenditure, I deposit that change directly to my piggy bank.

I don’t spend my time searching for spare change at the drive-through window, so that I may give it to the cashier in order to receive a whole dollar amount. Why would I do that, when I can trick myself into saving money, by receiving a handful of change instead?

Saving your spare change is an excellent psychological trick to help yourself “save money“, even when you may not be the “saving money” type. Try it out. Your mileage may vary, but I believe you will be surprised at the results.

Let me know your thoughts on this method in the comments. Thanks for reading!

Popularity: 50% [?]

If you enjoyed this post, make sure you subscribe to my RSS feed!

6 Comments

1
the weakonomist // January 5th, 2009 at 10:40 am

I don’t collect much change anymore because I use the credit card. However I do have my own change bucket. I made this awful ceramic bowl in high school that no one would ever touch for practical use. It started collecting keys and wallets over time. Now it’s holding about 3 years worth of change. There probably isn’t but $30 in there, but I’m holding out for the right time to roll it up.
2
Matt // January 6th, 2009 at 10:56 am

@the weakonomist: Thanks for the comment! You mentioned you are using a credit card for your purchases. I’m curious, are you receiving a cashback rebate for these charges? If so, I suppose that’s just as effective as collecting change.
3
Money Beagle // January 11th, 2009 at 4:24 pm

I don’t collect change much anymore because I pay for most with a debit card. But, when I used to pay with cash, I would keep all of my change and roll it up. I saved it for about 10 years and it ended up being a few hundred dollars which I used as a down payment for an engagement ring for my now-wife! She said yes!

Money Beagle’s last blog post..Good Thing For Savings
5
prufock // February 10th, 2009 at 10:38 am

I find this a pretty dubious method of “saving” money. If you’re spending the same amount, it’s mathematically equal to using your change for small purchases and not breaking bills.

I think the real psychological trick to this is that you THINK you’re saving money, because you see it all in one pile. But I find it just as well to have an extra ten dollar bill in my wallet as it is to have ten dollars in change in a jar.
6
Matt // February 10th, 2009 at 10:45 am

@prufock
Good point. If you are disciplined enough to “set aside” $10/month in your checking account for savings, then by all means, do it. If that’s the case, you don’t need this method. But unfortunately, many people aren’t disciplined enough to do this.

As you said, this method is a great way to TRICK yourself into saving money. Psychologically, you are spending the same amount… the money you are setting aside for savings ends up being mere “pocket change”… but it’s not… it’s potentially $10/month or more.

Thanks for pointing this out, and for participating in the discussion.