Remember my announcement last week of our new Challenge Everything Savings account? Well, this is proof right here of how POWERFUL this idea can be if you really apply yourself. And it doesn’t require any major change to your normal routine either!
[In fact, this $6k doesn’t even include any expense savings money which is the core of what we’ll be personally stashing ourselves. Meaning this number can be even greater if you were to add it into all the other forms of “spare change” which we’ll get to in a moment…]
Here’s a snippet of the correspondence I’ve been having with a fellow reader of this site:
I have 4 areas of savings:
1) Extra principal towards my residence and rental property mortgages
2) Traditional savings
3) SEP IRA
4) Cash — I don’t spend any of my change, $1′s or $5′s. You would be shocked at how quickly this adds up!
Let’s break down how awesome this is…
1) Extra principal towards residence and rental property: Yes, brilliant! The more you pay off, and the sooner you do it, the quicker those dang debts disappear and the less money you spend over time in stupid interest. And you don’t have to put in a lot extra either if you can’t afford to do so. Try rounding up to the nearest $100th like I do, or nearest $50th if that’s too much, and it’ll all go to accomplishing the same goal in the end. You’ll hardly notice the difference.
2) Traditional savings –– Not sure how this differs from all the other savings she does which we’ll see in more detail in a sec, but more savings on top of other savings all sounds good to me!
3) SEP IRA — This tells you right off the bat she’s self-employed as that’s what many of us use with our small businesses – the SEP IRA. We don’t know if she maxes it out or not which is a smart move to make in order to capitalize on all the tax benefits, but regardless it’s a great thing to do. Especially as we don’t get our beloved 401(k) matches anymore like we did at the 9-5, ugh…. That’s FREE MONEY FOR THE TAKING people! Y’all better be grabbing that if you have the option of it!
4) The “spare change” trick — This one was my favorite, and the reason I wanted to share with you today. Again, cuz it just re-emphasizes how simple and easy this stuff can be if you put the plan in place ahead of time. You always want to have a purpose for your money whether it’s cash you’re already expecting to get (ie, a paycheck) or it’s cash that comes unexpectedly. You should always know where it goes before you even get it, thereby avoiding any crazy expenditures or lifestyle inflation. And it’s of course okay to splurge on something outside of savings, but the difference is you consciously decided that action before the money came a trickling. Though it’s not always easy to do. (I’m just as guilty not following this at times…)
Here are two great articles on this by blogger friends who explain it much better, and thoroughly, than I:
- Treat your $1.00 bills as soldiers
- Why you should think of your dollars as employees
I got to talking more with this new reader friend of mine (turns out she’s a currency collector too and subscriber of my coin blog! Woo!) and she elaborated more on this “spare change” idea:
You ought to try my savings idea……. I sock away a minimum of $6,000 a year from change, $1’s and $5’s + misc receipts (b-day cash, refunds, found cash, etc.). My clients have had the same success rate as me — and you never notice that the money is gone! In fact, where did it go before I started saving it???
Exactly…. where does it all go? And notice she says “clients” there too – that’s because she’s a CPA and recommends this to everyone she helps as she goes along :) When was the last time your CPA hooked you up with fun savings tricks? Haha… (okay, that was a dumb question – they help save us money all the time on stuff – especially during tax time!! But you get the point…)
So this $6,000 comes from spare change (I’m guessing coins), ones, fives, birthday money, refunds, found cash (*ahem*) and any other extra money she receives. Sound familiar? If you weren’t convinced last week when I unveiled this plan, I hope you’re getting closer to it now. $6k is no joke. And remember, it doesn’t even include any of the monthly savings from the expense-cutting missions either! Which alone will be a hefty number when all is said and done…
Needless to say, I’m pretty invigorated here. I only have 15 cents in the account right now as I’m waiting for all the bills to hit (I found a dime and a nickel on my walks this week, haha… who throws away money???) but I’ll soon be xfering over the differences of all these new bills vs old ones in it shortly. And I’m officially going to try and beat out this $6,000 number too :) That’s enough to max out your ROTH Ira and still have some cash leftover! Hubba hubba!
Hope this helps motivate y’all this fine Monday morning… Keep collecting that money!
UPDATE: My friend who saves this $6k every year saw this post and sent me a little back story on it – thought you’d find it interesting :)
I began this process only saving change which totaled about $1,000/yr but once I made the commitment to save $1’s, $5’s and what I call “extra” cash, the amount just skyrocketed…… probably due to my focus on it. And yes, I only carry $20s so if I buy a bottle of pop, it may end up costing me out-of-pocket $20 ($1.50 for the bottle of pop and $18.50 for my savings) since my area prefers to give $5s as change.
(I also use my debit card a lot to pay for purchases, electronic payments, etc. For each use of it, $1 is transferred from my checking to my dog’s savings account to pay for her medical insurance and expenses. She is an English bulldog and is susceptible to expensive medical bills!)
But the whole goal of this method of savings was to make me conscious of how much money I was wasting before implementing this system. If I can save an additional $6,000+ a year and not even feel it, then I really wasn’t in control of my cash receipts/expenditures in the past. And accumulating cash this way is actually fun and exciting for me….. I enjoy it! Everyone has a vice and mine is collecting cash!
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PS: Did you list your one item for the week yet on Craigslist?
[Photo cred: c_ambler]
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You know what’s even crazier to me than the people who drop their change and don’t pick it up? The people who spot it and STILL pass it by! Every time I find some small “soldier”, I grab it and think I AM A MONEY MAGNET! Though I usually save it for the laundromat rather than savings ;)
Haha YES! Agreed! I even have friends that will THROW all their change on the ground as if they can’t be bothered keeping it in their pockets, haha… wtf.
Damn J. let me know who your friends are and I will walk behind them after the morning starbucks purchase. I will be a millionaire faster by saving the wasted coins.
You’re like the change version of this guy – http://www.goldfeverprospecting.com/urprnymanpas.html Clearly we should all be mining the sidewalks for pennies AND diamonds.
I pick up everything but I also wonder who uses cash still. The only time I do is at bars/restaurants and never get coin change back. I can’t remember the last time I was handed a coin…
I’m of the thinking that using cash is irresponsible because you’re foregoing the cash back you get from credit cards. Unless of course you’re in debt or don’t pay yours down. But if you do, why wouldn’t you take that “discount”?
Haha I am guilty of that. *runs away in shame*
We have used a 2 gal bottle that holds all our change. Everyday we empty our pockets and put it there. Ive never kept track of how much it averages per year but we typically get $400 per fill up and we empty it 2 or 3 times a year.
Never pass up on change lying on the ground. Doesn’t matter if its a penny either. It all goes in the bucket.
1s and 5s is not a bad idea. I couldn’t tell you exactly where they go but we use them, so I will start paying attention and if it turns out to be junk spending, Ill put it back to save.
I know exactly where all my spare change goes – into the vending machine at work. My waistline no longer cares for this and… Ohmyword – if I spending thousands at the vending machine, I need a slap in the face. I’m going to start saving my spare change and see what happens.
Yikes! You need to put a sticky note on that machine to say “BACK AWAY KIRSTEN!!!” Haha..
Wow, $6K a year in change? I don’t know if I’ve used that much cash in the last 10 years! Even the farmers market takes cards these days. I wonder if this reader is using cash exclusively for regular transactions?
I think I go to the ATM about twice a year :-) It’s to the point where I have a hard time remembering my PIN…
Really? I take out $200 every month or two cuz I love having cash on me at all times… it’s my “splurge” money where I don’t have to think/worry/care about where it goes. It’s empowering! :)
Saving $6K is impressive, but in change is crazy. I cash in my change from time to time, but usually just put the money in my pocket. Need to be more diligent about my savings.
$6,000 a year is impressive. I think that we save about $1,000 a year in change, and now that we have joined in the savings challenge (when do I need to send you my bank balance info?) I should add that to our account when we exchange the change.
YES! Do it. I’m throwing my spare change in there too – no doubt (at least when I go to cash it into the bank). Send me the balance after the month closes out :)
$500 per month in change is a LOT of spending!
But my curiosity is piqued…I’m going to sit down later and see what I’d come up with if I rounded up all of my transactions. As it stands now, I don’t do cash.
Okay, I’m back, having spent some quality time with Mint. I rounded up all of the transactions from August that I could have paid with cash.
IF I had gone to the ATM every single time I needed to make a purchase, and IF I withdrew money in multiples of $20, and IF I paid every transaction with $20 bills instead of re-using change from previous transactions, then my total change would have been $500.35. Of course, the “best” transactions for jacking up my “savings” were the frivolous little ones, like a cup of coffee here or there.
A lot of people are using the word “impressive”. I find the discipline of saving all of that change impressive for sure, but the only way to get change is to spend money.
Did you just spend the last hour and a half on this? Haha.. you are too funny (and by funny, I mean awesome :)). You’re right – lots of spending in cash would need to occur to get so much added up, but perhaps she uses cash for everything and not plastic? never know… We all spend way more than $500 a month in our lives no matter what tools we use.
Haha…well, I’m a major nerd :) But there was also some quality feeding and chasing around the baby time in there, too.
I’ve always had some questions about people who round up purchases/don’t use $1 or $5 bills for savings- how does this work with your budget? Do you use zero balance budgeting and if so, does that savings still just get counted into the budget category (so you actually spend less in the category than you track)? Also is there anyone who has found a good way to do this when you do most of your spending using credit cards? I put as much on a card as I can to get rewards back and always make sure I don’t spend more than I can pay off in full each month.
I do the same as you actually – budget by credit card. You can see real fast if you’re on budget by just looking at the one main number on the statement every month. If you like tracking it down into categories and sub categories it does get tricky, but places like Mint.com/etc help with that. As for the people who save the extra bills/change, I’m guessing they just put that it’s all spent, and then it’s a nice surprise later and goes right into savings?
I had done this once with loonies and twonies (I’m Canadian) for a year and saved up $600 and this was just from spending alone, no extra gifts etc… But $6K is serious! We currently save all our change except the quarters (laundry) but I know that if we did this with $1 and $5 bills we’d have a decent stash too…hmm…
We were really good at this and put all of the extra money toward debt payoff, but I got off track this year. Heading to the change jar now to start the cycle up again. BTW, I listed TWO things on Craigslist this week. :-)
Yeah girl!! Work it!! That’s impressive! :)
Wow, I am super impressed with the $6000 in spare change savings! We almost never have cash unless someone pays us back for something. We really never go to ATMs (because whenever someone does pay us cash for something, we keep the cash until one of those rare occasions when we need cash!). Any, bravo to that reader!
My husband has been saving his spare change for years in a little bucket in our closet, and it used to drive me crazy until I realized how much he saves from it. I guess I need to suck it up and admit that he was smarter than me about this idea!
In your closet??? Haha… I guess because that’s where y’all undress, and thus empty out the pockets? I have mine on top of my dresser drawer for that reason, so I guess it makes sense :)
$6K a year from change is quite a lot. I save all my change (not $1 or $5 yet), but I don’t get anywhere close to that amount.
I use a 5 gallon water jug to keep my change, but have never been able to fill it up to the top. I always bring it to the bank when it’s a quarter full.
Cuz that $hit gets crazy heavy, right??? Haha..
The problem I have is that I never carry cash – ever. You’ll never see a $1 or $5 bill in my wallet. I mean maybe once or twice in a year, but that’s it. Sometimes I come across change, so I could save that. Usually, I keep it in my wallet for parking downtown though. I’m not sure how I could change this really; I think I could be more diligent about saving my extra / discretionary money left over in my budget. I bet I would easily save more than $6,000.
All our change goes into an empty vase from our wedding. When it’s full, we cash it in and use the money for a date. Whoever guesses closest to the amount in the jar gets to decide what we do on the date. But it’s nowhere near $6,000/year.
Know what Canada has done really well lately?
Money.
Canada got rid of the penny and has both $1 and $2 coins. Do you know how quickly change adds up when you have NO PENNIES and $1 & $2 coins?
I keep all my $1 & $2 coins in one piggy bank, and my other coins in a separate jar. I’m saving it until the banks for each are full before I open it up and see how much is in there. When Canada still had the penny I got over $400, now I’m even more optimistic ;)
Couch cushion change is my secret wealth.
Note to self: Next time you’re in Bridget’s house raid her couch!
6K that’s awesome. I do have a piggy bank that I have been stuffing money with for the last 6 months or so, I’m certainly curious when it gets full the total amount.
We snowflake everything we save to one of our goals – savings or debt repayment. We don’t use cash, though (or, at least, rarely), so at first I was really excited about this challenge, but I think I will have to modify it. I have thought about rounding up on all of our purchases and squirreling that money away towards meeting a goal. That’s a lot of math, and I know there are programs that do the calculations and put the money into a different account for you, but I want to have control over where that money goes. Great inspiration, J. Money!
That’s an idea :) At the end of every month just go through them and maybe eyeball estimate the difference? Switch back and forth between a spreadsheet and just add the numbers up and then xfer it over into savings? If you get a friend/significant other to help you can just say them out loud while they type it up. Prob take 90 seconds tops (unless you spend a lot, haha…)
Hi J ~
You know I adore you, but we have a difference of opinion here. The good news is that everyone should do what works for them as there’s no real cookie cutter approach to growing wealth. Of course, like you, I can’t pass up a coin (or bill) laying around on the ground. I don’t care if people snicker as I stoop down and scoop that treasure up!
Where we depart is on saving “spare change” of any denomination. Here’s why I don’t:
– For people who are newly committed to growing wealth, saving spare change is like playing the shell game with money. It perpetuates games we play with ourselves and keeps our head in sand. You end up never really knowing what you’re spending and most people spend the booty saved on a splurge so it didn’t really net them anything.
– If the goal is to pay down on the debt, why wait until the end of the year? In my opinion, it’s better to throw every last cent you can at it every month.
– If the goal is to grow wealth, isn’t it better to move that money as fast as possible into an investment fund? Granted, a few hundred dollars (or even a couple thousand) doesn’t make a huge difference immediately, but we all know the beauty of compounding.
Anyway, it’s a great debate and I hope you don’t mind me offering a difference of opinion here :)
Be happy, healthy and wealthy,
Ree
Don’t mind at all! You know I welcome all opinions up in here – I don’t discriminate just like money doesn’t :)
And overall I agree with you. Unfortunately a lot of people have a hard time actually following through on stuff, so the little mind tricks help them to stick to it more. At least initially.
It’s kinda like the whole Tax Refund debate. Financially speaking it’s best to break even at the end of the year and use all your money efficiently throughout the 12 months, but we all know people don’t do that – including us sometimes. Whereas if you got back, say, $2,000 at the end of the year for this “free loan” you gave the gov’t, it’s enough to stop you in your tracks and make a conscious decision to do something big with it – like pay down debt, invest, save, etc. Of course, you can also equally spend it on nonsense splurges, but at least you stop to think about it first – vs the smaller amounts you’d be “gaining” with every paycheck you get throughout the year.
Anyways, as you said it’s all different for everyone. I think once you get into the upper phases of wealth building a lot of these tricks don’t matter as much, but early on while you’re trying to figure it all out it’s a different story – at least in my opinion.
I wish I was seeing you this week at FINCON!!!! I still haven’t met you in person and would love to :) Just fly out to NOLA will you? We’ll have fun!
Excellent tax refund contrast, J! Admittedly, I live in fear of not having paid enough so that I end up owing. I’ve been “self-employed” for the last 12 months and paying estimated taxes. I’m even more nervous about that because it’s uncharted territory for me. The desire to squirrel away more than is needed is hard to resist. I suppose this wealth-building thing is an ever evolving skill!!!
While I’m really bummed that I won’t be hanging out with you and the rest of the FINCON crowd, I’m cherishing being with my mom at this time; she really needs me here. I know I’ll get to meet you in person sometime…soon, I hope :)
Family first – always :) Really good you’re able to spend so much time with her right now!
And don’t even get me started on quarterly taxes, ugh… the 1 thing I hate about self-employment, though luckily I pass on the buck to my accountant who keeps me on track w/ that stuff :) My income fluctuates so much!
I love the spare change challenge, but I prefer to use a credit card for most, if not all, of my purchases (I always pay the balance in full every month, treat it like a debit card and don’t spend more than I have available – but I like earning rewards as well as the extra protections and perks that a CC offers). The way I have adjusted this to work for me is by rounding up all of my transactions and depositing the “extra” into a savings account. I try to do this weekly, but even if you do it monthly it is not too cumbersome.
I personally track my spending/do my budget with Excel, so I hand-total all of my transactions. However, if you were using Mint or even just your regular interface with your bank/credit card company, you could do the same thing. It takes a little bit of time and a little bit of math, but it was totally worth it to me when I bought an entire round-trip airfare to Russia (~ $1100) completely from one years’ worth of doing this + saving actual change, with the occasional $1 or $5 thrown in.
Nice! Sounds like you’ve got a great system in place :)
I’m doing a cat food focus group tonight. Two hours, $125. I’ll use it towards my credit card bill. Thankfully, I don’t have to taste any cat food or actually bring the cat along. Maybe there will also be a gift card drawing!
While I don’t think I’ll find $6,000 this year, I’ve decided all the spare bits can count — change in the coffee can that I redeem at the bank, judging for a high school speech or debate tournament, cat food focus group, etc. I do track all these miscellaneous payments on my Excel (budget) worksheet just for the heck of it.
It would be interesting to see what a year’s worth of miscellaneous payments look like – if you ever want to share with me/us :) I really REALLY like that idea, and will be doing it too as we track this new Challenge Everything Savings account/idea over the year.
(we’re such nerds)
Hi J,
Happy to share when I have more info. It’s been a quiet year for that type of money, but I love tracking it on the old spreadsheet. You never really know where or when these odd amounts will surface. Your Challenge Everything project has been excellent, and quite useful for me, even if it’s an area I’m not currently looking at making changes. My next up is the will, beneficiaries, health care directive, etc. Just getting the House of Carol tidied up.
Smart woman! :)
This method doesn’t make sense to me.
At the beginning of each month, I budget my money to where it needs to go, including to my investments. So, I have complete control over my money at the start of each month. I don’t need to hide money from myself with each purchase I make.
And I rarely have change to begin with as most of my spending goes on a card (paid off each month, of course) to get the rewards / cash back.
Seems like you’ve mastered the system then :)
I once had a friend who didn’t like change (except paper bills) and so she’d never keep any coins on her person. I wonder how much she’s given away in change over the years…
My husband and I have a “poor box.” It is literally an adorable wooden box with a slat to drop in coins (or dollars), that has “Poor Box” painted on it. When we empty our wallets we drop our change and bills in there. Mostly it’s our vacation fund so we can feel like we’re vacationing for “free” since we’re not pulling any money out of the bank. A funny side not about this poor box. When my now husband and I were dating I saw this box in a store when we were window shopping. This box was seventy bucks! … And I wanted it. Badly. Because it was so cool. My boyfriend said, “How much?! I could make one for nothing with spare wood.” I felt bad about my consumerism and left it alone. I secretly planned to buy it later though. Ha ha. Guess what I got for Valentine’s Day? A poor box that he’d made for me. It’s one of my most treasured possessions and it holds…treasure. :)
Awwwww what a wonderful story!! (And what a smart man you married! ;))
You totally need to blog about this if you haven’t yet, and then send me the link with a picture please :)
We have a piggy bank, and we put every spare dollar or coin into it…but $6K?!? I think the past 6 months got us $67 :)
I need those ones and fives! There are a ton of restaurants I go to that are cash only. Can’t imagine how much cash I would sock away though if that was my rule. That’s a lot of savings.
And yes, picking up change on the ground is the best. Free money and all you have to do is lean over and pick it up! Just make sure you aren’t about to get run over by cars. That’s the only time I won’t pick up change is in a busy intersection.
I know, I run into “cash only” places all the times yet people always seem to think they never need cash? I just feel comfortable having some one me at all times – even if I end up pulling out the card more so than the bills.
That saving those small coins or bills are so true!
I have a full briefcase of coins that i have saved through the years. That’s my surprise fund!
Anyone cheers!
Anha
My husband saved all coin change he received for over a year, and it added up to $600. It was a planned splurge – but the splurge wasn’t yet decided. A trip to the slopes with his snowboarding buddy seemed to be winning out. He called me into our room one night and showed me the empty jar. Then he showed me the envelope full of $100 bills. “What are you going to do with it?” I asked. He handed the envelope over to me so that I could splurge:) Pretty sweet, eh?
Awwwww…. Smooth man right there :)
She could have about an extra $500 if she stopped buying a soda pop for $1.50 and putting $18.50 into savings if she would drink water (essentially free) and put the whole $20 in instead.
I’ve done this in the past and without any effort at all I have managed to save a couple of hundred bucks via just one’s. I recently moved to the USA from Canada and with the loonie and tooney it’s really easy to save. Because it’s just ‘change’ you don’t really think about it when you save. I never made it to six large though.
I don’t spend my change or $1s either and I have used this for different things in the past. Most recently I changed this all in and used it for spending money on a trip I took last fall. I haven’t become good enough to actually roll it and bring it to the bank yet though. I am still keeping Coin Star in business. I know I know, kind of counter productive.
Lots of banks used to have their own (free) coin counting/accepting machine but they seem to keep disappearing :( Guess it ended up being too much hassle for them?
I did add my item on CraigsList, though it hasn’t sold yet! My wife has always put away change that she finds on the ground wherever she goes. At one point she had over $300, just in change found on the ground. She uses it buy present for people randomly.
$300 from on the ground??? Where is she searching – Vegas?? :)
Along with picking up dropped coins, I also put in the change jar any coupon savings I got from grocery stores. I don’t do the in store savings, just the manufacturers coupons(plus the downloadable ones). Last year, between the two I was able to buy ally Christmas gifts :)
Now THAT idea I like. A lot.
I’m all about putting away the would-be-savings into ACTUAL savings!
As evidence of this post here :)
https://budgetsaresexy.com/2014/09/the-new-challenge-everything-savings-account/
I saved in change every cent i saved using coupons for 18 months a few years ago. If i used a10 cent coupon 10 cents went into the tin. I only used coupons for things I really use. Even the Coupons for online shopping – free shipping etc I would figure out what I saved and put that amount into my Tin. Any coins i found on the ground also ended up in the same tin. I started doing it to prove a point to my siblings – that the money saved in coupons does add up. i saved enough to pay my share of a group trip to Hawaii – which was just over 2000 dollars at the time. My sisters and mom started using coupons after that and quit telling me it was a waste of time.
Hell yeah!!! Haha… That is bad ass. And a perfect way to prove a point too – well played :)
i do the spare change challenge. it’s pretty awesome. i’ve even fought my friends over their change. i see some on ground and i pick it up and people make fun of me. i tell them not to laugh when i have more money than you
Haha…. indeed.