Budget Sense

I used change money to pay the down-payment on my dental treatment. That is right, I used nickels, dimes, quarters, loonies and toonies that I had saved in a piggy bank to pay more than $800 towards the total cost of getting braces for my teeth. And it took me less than 18 month to save this money.

The best thing about it all, it didn’t even feel like saving money. I was simply putting away loose change that I didn’t need.

Although this was my first experience of using change money to pay for a large purchase, other even bigger ones were done later on. So how can such small amounts of money lead to enough savings for a big purchase? Using my own long experimentation with this type of saving, here are some ways where you can save enough coins to buy some of the things in your wish list.

-Decide where you will collect and save your change: a piggy bank comes to mind, and while it doesn’t have to look like a pig, it is important that the jar you use is closed and has no way of opening it, unless you break it. You don’t want to make it easy for yourself to open your little bank, the next time you desperately need change for a coffee.

-What are you saving for? you have to decide what you are saving for. Is it a down-payment on a used car? New computer? Getaway vacation? Once you decide what you are saving your change money for, print a little sticky tag with what you are saving for and stick it on your piggy bank jar. This helps, according to our 3rd principle of budgeting and finance, to keep you focused on a clear goal.

-Target date: while it is not a must to have a target date to reach your savings goal, in certain situations you will have to specify one. For example, if you are saving for an August car show in California, then you have a clear target date to abide by. A specific target date together with a clear objective for the saving (see note directly above) will help you stay more focused.

-Where to place your ‘loose change’ bank? This is extremely important. Based on my personal experience, the car has proved to be the best place to keep my piggy bank. Why? It is so within reach to deposit all your leftover and unneeded change from any purchase. Of course, you will have to hide it from clear view for safety reasons. If you are uncomfortable leaving it in a car or don’t even have a car, next best place is somewhere that is within the view of everyone at home. This will help make it easy to reach, so you can deposit your change in it when you come back home. Occasionally your family members may (hopefully) deposit their unneeded change there too.

Although I used a piggy bank jar to save my loose change money, occasionally I would deposit small bills too. This can speed-track your savings.

Putting your loose change away in a bank has an additional benefit to your health as well. Like we noted in another article, as your wealth and health are closely related, saving your change will help you avoid spending it on junk food or high caloric beverages.

Last, you shouldn’t use a piggy bank to replace your real bank savings. The two are completely independent and this second one is more of a complimentary (not a substitute) for your real savings in a real bank.

In accordance with our 1st principle of budgeting and finance, ‘every bit helps’ and diversifying your means of savings, even through change money, will go a long way towards achieving your financial goals.