For those of you who are new around here, I’m a big proponent of paying yourself first. All you need to do is figure out what your savings goal is, and set up an automatic deduction at the bank to make it happen. It takes all of 15 minutes to do, and it’s done forever. I continue to advocate it because it’s so damn easy.

Most people are pretty bad at saving money. By automating their savings, they make something that can be complicated easy. And if you make savings easier, you’re more likely to succeed at it. This is why so many personal finance bloggers advocate paying yourself first.

There’s other ways to save money too. You can just not spend so much, letting the excess accumulate in a savings account. As I get older, this is the method I find myself using more and more. I’m generally kind of a cheap bastard frugal guy by nature, and money just kind of accumulates in my savings. I also enjoy the cash buffer, even though I’m kind of anti emergency fund.

Or, you could take all your change and put it into a giant jar. That might be fun.

That’s the method advocated by Eddie over at Finance Fox. He saves his change in a jar, and then takes the jar every few months to the grocery store. He feeds the coins into the counting machine, which then gives him a little receipt which he can redeem at the till for cash.

There’s only one problem: the coin counting machine charges a 10.9% fee to do his counting dirty work. So, for every dollar he puts away, he actually only gets a little over 89 cents. This might be the worst possible way to save money. This is like taking your dollar, and buying shares of a company that you know will lose 11% of its value. He knows he’ll lose money by saving this way, yet he keeps doing it.

Why doesn’t he just count it himself? Like all of us, he’s a busy guy. He figured out it would take him an hour and a half to count the change, which isn’t worth $11 per $100 worth of change. So he doesn’t have time to count the change, but he advocates a labor intensive way to save money. Makes total sense.

But it’s okay everyone! It doesn’t matter if paying an 11% (yeah, screw it, I’m rounding up) fee on your savings is a really bad idea. It doesn’t matter if saving just $100 in a few months is a pretty poor amount. It doesn’t matter if he actually thinks this is a good value, even though it clearly isn’t. None of this matters. You know why? Because it “works for him.”

“Works for me” has become the personal finance excuse to use when somebody uses numbers to dispute whatever idea you have. Don’t bother to actually respond to legitimate criticisms that people have. Nothing else matters, because you’ve figured out something that works for you.

Back to the issue of saving your change. I still don’t understand why you’d bother. I use a combination of cash and credit card for my monthly expenses. I accumulate change, just like everyone with cash will. So what do I do? Sometimes, while I pay for stuff, I use my change. Or, if the amount comes to $12.14, I’ll give the cashier a $20 bill and then $2.14 in change. That way, I use my change, and I get the added bonus of pissing off the guy in line behind me.

Plus, you can carry a change purse, if being gay floats your boat.

The cherry on top of the saving change strategy is that several Canadian banks offer a way to do it using your debit card, which is okay only if you’re making enough transactions on your debit card to justify the monthly fee for the bank account. The bank will round up each purchase to the nearest dollar, electronically transferring those small amounts to your savings account. I think you can even round up your purchases to the nearest $5 increments, if you’re more serious about spare change saving. If you spend the money on an unlimited debit card transaction account anyway, this isn’t such a bad way to save. It’s not great, but it’s not horrible either.

Hey, at least you’re not paying an 11% fee to save money. Don’t do that. Ever.



Tell everyone, yo!