Everyone hates change. It’s bulky, most wallets aren’t meant to carry it, and the denominations of money are so small, that many of us don’t think much of it. However, it can really add up by the end of the year. If you want an easy way to save money, one of the best ways to do so is to keep your change when you pay in cash.
Let’s look at an example:
This morning, you decide to start your day out by buying a latte. The total comes to $5.32 and you give the barista $6.00. They return your change to you, and you put it in your pocket. Later that day, you go to buy lunch and spend $9.45. You hand the person at the register $10.00 and they return your change to you. Your final purchase of the day is a new phone case for $20.13 and you hand over $21.00 and get your change back.
At the end of the day you have a pocket full of change, and a couple of options:
Option A would be to forget about the change and get rid of it. Obviously this would be a poor choice!
You go with option B and decide to place it into a container where you store all of your unused change. Today you’ve been able to add $2.10 to your change jar! Your first purchase contributed $0.68, $0.55 from your second, and $0.87 from your third.
Let’s say you have similar spending habits for the year:
If you take $2.10 and multiply it by 365 days in a year, you end up with an extra $766.50 in your pocket. Not bad for carrying around some small coins with you each day!
However, although you’re keeping all this money, it’s important to realize that in this example, you spent $34.90 in a day. Over the course of the year, that’s going to come out to be $12,738.50. Because of this, this saving method is most effective with people who have the problem of spending too much money.
That doesn’t mean you can’t do it if you’re not a big spender though! It’s always useful to take full advantage of the money you have in order to maximize its use!
On Thursday, our contributor Amy has a fantastic in depth article on how to get control of your finances in just one week! Be sure to check that out!