THE LOWLY CHANGE JAR

Most households have one, you know that jar, bank, bottle, vanity tray, dish, whatever that you drop your pocket change in at the end of the day.  For some it is merely the bottom of their purse, their car ash tray, wherever it is, coins get collected.

Some of us, myself being one, will stop and pick up change off the street, be it a penny or a $1 coin (or in of one recent incident a $10 bill), others are the people who would rather not “stoop so low” as to do that. 

Some, like myself, prefer to save the coins until needed, others prefer to spend exact change at every opportunity they come across.  Whichever you are coins are a valuable part of our day to day living. 

We all consider the penny to be the lowest denomination of our cash system here in the US.  But at one time we had a half-cent coin. It was discontinued in 1857.  In recent history there have been two proposed bills to discontinue the penny because it takes two and one half cents to produce one (as of Feb. 2011), but the lowly coin hangs in there. 

In 1982 the copper penny became the zinc and copper penny to help reduce production costs.

Canada’s 2012 budget calls for ceasing production of their penny.  To some this makes tremendous sense.  To others it would mean changing a whole lot in their lives. 

Here in the US it would mean all payments would either have to go either down or up (most likely) by as much as four cents.  And in some budgets that four cents can really hurt.  After all minding your pennies is how you can build your wealth.

Just ask the Massachusetts man who just paid off his house with pennies.  He’d been saving every penny that came into his possession since he purchased his house in 1977.  He recently made his final payment with two 800 pound boxes of pennies.  The count, according to the news story I read, was 62,000 coins.  That’s a whole lot of pocket change. 

Me being the math nerd I am couldn’t help but think, “but if he had put those coins in a savings account every time he got $5-$10 worth he would have garnered a lot of interest over the years and been able to pay it off sooner.”

This brings us back to the subject of this post.  Your coin jar, or whatever you have.  What are your plans for it?  This man had a goal.  I have one too, it is to pay for our celebration trip to Walt Disney World when our debt is paid off.  You already know this if you have read my previous posts.

I’ve already written about how to feed that jar on a regular basis, if you haven’t read about this before you can now at: http://cjpattersonontheranch.blogspot.com/2012/01/paying-for-your-magical-trip.html

There are other ways to also add to your coin jar.  One bank advertises that they will roll up your purchases for you to the next dollar and “save” the difference.  Meaning basically that if an item costs you $1.01 they are going to deduct it from your account as $2 and put the $.99 into a savings account for you. 

I have no idea if they charge for this service or not.  I’ve never employed it. Instead I do it myself.  I never pay with coins, only even dollar bills and all change leftover from those dollar bills goes into the “Tinkerbell Fund”.

The easiest way to do this is to employ what is called “the envelope system”.  Many of you are already familiar with this system.  Basically it is part of a zero based budget in which all your “spending” money goes into designated envelope sand you can only use the money in that exact envelope to pay for the purpose it is labeled for.

A zero based budget simply means that EVERY dollar that comes into your household has a name and that name is what it is to be spent on.  With your budget the difference between income and outgo should be zero.

Before you panic at this thought, your budget includes EVERYTHING, including “blow money.”  It is completely explained, far better than I could do, in Dave Ramsey’s book “The Total Money Makeover”. 

But back to the coin jar and singing its praises.  If handling cash is just not your thing, and you are completely dependent on your debit card you can still have  a “coin jar,” just an electronic one.

Remember that bank with their fancy “we’ll save it for you” account.  You can do the exact same thing.  It just requires a little bookkeeping on your part.  Use your debit card as you normally would, only record the use to the next higher dollar denomination whenever the dollar amounts aren’t even.  Then at the end of the month when you reconcile your statement you take the difference and make it into a savings deposit.  You’ll be amazed how quickly that change adds up.

I know some of you are saying “but isn’t that taking away from your budget?”  Not really, because how many of us truly pay to the exact penny every single time we shop.  No we drop those coins into a jar, or down in our purse and we forget about them until there is a real need for that money.

An example of such a need I saw recently was a college student for toilet paper in pennies one day.  THAT is a true need.

However you decide to save your odd cents, do it.  Set a goal and save for it.  Maybe it is to pay off a big debt, like the man who paid off his house, or to buy that something special, or the trip of a lifetime.  Make every single penny count in your budget.  Save your pennies, and just like the person who is eating an elephant one bite at a time, you will meet your goal a lot faster than you ever dreamed. As Granny always said, “mind your pennies and your dollars will mind themselves.”

Jan who feels her granny was very wise in OK