Do you keep a change jar? My mom keeps all of her change and has been saving it for the last two years for a vacation. She is not alone as many people hoard their change as a way to save money, especially if they feel they’d otherwise be unable to. However, just as many (or more) argue that keeping change is a waste of time and space. Both sides have valid points; I find there are 5 benefits and drawbacks of keeping a change jar.
Benefits to Keeping a Change Jar
There are benefits to keeping a change jar, which is why so many people do so, even in this age of prevalent credit card usage.
Save for Something Special
Have you ever seen the big five-gallon jugs that people use to collect their change? One man saved for 10 years, and when he cashed it in, he had over $3,000, which he used for a trip to Europe. Would he have saved that money without keeping his change? He says no. If you don’t have the discipline to save, keeping your change is a good, mindless way to save.
Cash Emergency Fund
Another woman saves her change for a rainy day. She and her husband had an expensive car repair that they hadn’t planned for, and they robbed all of their budget categories to pay in cash for the expense. That left her with no grocery money for her family of four for the month, so she raided her change jar. She had $224 in there, which she used to feed her family. It was still a tight month, but she didn’t go into debt, and her family didn’t go hungry.
Drawbacks to Keeping a Change Jar
Unfortunately, there are risks and expenses with saving this way.
Could Earn Interest
One of the major drawbacks to keeping all of your change in a jar for years is that you miss out on the interest you could be receiving. Take the man who had $3,000 in change. He could have invested his money as he saved and been earning interest. He would have made more money than he did just leaving it in his closet.
May Lose It All
An even bigger drawback is that you have the potential to lose all of the change. A friend of mine had about $120 in change she’d been saving, and, unfortunately, her house was robbed. All of that money was gone. Even if your house isn’t broken into, you could lose the money if you have a fire. Even teens have been known to dig into their parents’ change jar for a little extra money.
You May Pay a Fee
A select few banks still offer coin counting machines for free, but many won’t take coin rolls. If you have to rely on CoinStar, you’ll pay an 11.9% fee, so if you turn in $300 in change, you’ll pay $36 in processing fees. If you need to pay a fee this high, is it still worthwhile to save your change?
Saving change has been a fun way to save money, but as these 5 benefits and drawbacks of keeping a change jar demonstrate, it’s becoming increasingly costly. If you can have enough self-discipline to save the money on your own in a bank or invest it, that is the better way to save.
Do you save your change? What benefits and drawbacks do you see?