Building Savings from Spare Change

By Sierra Black

The other day, my husband gathered all the spare change in the house and took it to the coin machine at the grocery store. It was a hefty bag; we'd been collecting spare change in jars for years. I'd raid the one on my desk for quarters when I needed parking money, but, otherwise, we left them alone. Eventually, we noticed several were full. It was time to cash them in.

I thought he might have a considerable amount of money. Sixty dollars, maybe. Enough for a dinner out, or a splurge at our favorite thrift shop. Not that I meant to spend it: these coins were destined for our savings account.

My guess about the amount was way off base. My husband came home a few hours later and presented me with a dozen $20 bills--$240 in all.

That's a lot of spare change. It's a quarter of the way to the $1,000 emergency fund Dave Ramsey encourages everyone to build up before they begin paying off their debts.

Spare Change Feels Like Free Money

It was basically free money. I didn't have to hold a garage sale to get it, or pick up extra freelance work. It's just the accrued wealth of emptying out my pockets every night. A lot of this was loose change I found on the street. None of that money affected my budget. I never felt the pinch of saving rather than spending on something fun.

Because we cashed it all in at once, the time cost was visible: about two hours to take it to the coin machine and turn it into larger, more manageable currency. But, $120 dollars an hour is a pretty good rate. It's more than I've ever made at a professional job.

One of my favorite bloggers, Katy Wolk-Stanley, likes to call herself Coin Girl because of her penchant for picking up stray coins on sidewalks.

I'd always been skeptical about the financial advantages of collecting loose change, but now, I'm a believer.

Unlike me, Coin Girl doesn't let her spare change lie around gathering dust for years. She puts it straight into her savings account every week. It might seem silly, making 50-cent deposits--but it's classier than a cape and tights. She starts earning interest on those pennies as soon as she collects them.

Cultivating the Savings Mindset

Of course, even at the best savings account rates possible, a few coins here and there won't add up to substantial wealth. But the mindset that comes with collecting and saving them will. Coin Girl points out that scanning the ground for coins is a way of showing respect for small amounts of money. For her, it's the same mental hack that helps her value small savings at the grocery store and look for ways to trim the fat in her budget.

Taken altogether, those small amounts add up to big savings. I've saved almost $10,000 in the past year, and paid off $10,000 in credit card debt. My income went up, yes, but most of that money came from my growing ability to save rather than spend.

Saving your small change can be a mental boost in another way: it shows you really can afford to save. Many of us, especially when we're struggling with debt, don't save because we think we can't. We're spending more than we earn. Every dollar is accounted for, and then some. There's nothing to save.  So finding ways to save through tricks like learning how to automate your savings and keeping your spare change can get you started with good habits.

There's always spare change. Everyone picks up a quarter off the sidewalk now and again, or finds a fistful of change in the couch. That money was lost or found, and isn't part of your budget. Save it.

It might take you a year to save up $100, but at the end of the year, you'll be $100 richer. You'll also know you can save money. That lesson is worth more than the loose change in your pocket.