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.
Yeah, that’s a bit silly. Like you, I use my credit card for the majority of my purchases, and when I do have cash I just use the change to buy a coffee or use exact change with a purchase to get a bill back.
My beef is the attitude of, “my time is worth more” than the $7/hr I would make from rolling the change or clipping the coupon. C’mon, really? That’s just being lazy.
We’re not talking about a specialized task of finishing your basement or building a deck. I can roll change in front of the TV while I watch sports – Hey, look at me…I’m multi-tasking! Stop putting a $100/hour price tag on your time, unless it’s actually taking away from a job that pays you $100/hour. Last I checked, I was off the clock at 10pm when I’m on the couch watching TV.
My bank offers the coin counting machine for free. It’d be a nice perk if I ever had change. Anytime I have an extra quarter I either buy a gumball or toss it into a wishing well.
My bank offers the coin counting machine for free. It’d be a nice perk if I ever had change. Anytime I have an extra quarter I either buy a gumball or toss it into a wishing well.
I’m gonna build a nationwide chain of wishing wells. They’ll make a fortune, until kids keep falling in.
That’s perfect. You can then hire the children to collect the change.
Your tweet the other day about that very thing was bang on.
Not sure how you manage to keep any friends in the PF community when you write posts like these Nelson – you’re such a jerk about everything! You’re usually mostly right but you have about as much class as a cockroach. Oh well, at least you make us laugh
When are you going to get rid of this disgustingly ugly theme anyway? The ones you were using before this were much better. A sheet of loose leaf on cheap looking laminate flooring? Really?
That’s fair game – you can take as well as you can dish it out, right?
I’ve been thinking of switching up the theme. But I’m lazy, so it’ll probably take months.
The PF community needs someone who actually disagrees with posts. Nobody else has the balls to do it.
One of the supermarkets I regularly visit has self-checkouts and I just drop coins into the appropriate slot. It does take more time and I drop coin only when there is no customer line, but it allows me to get rid of the coins at face value, without any fee skimmed off.
That’s not such a bad way to get rid of change. One store in town used to have self checkouts. Then they closed it down. That made me sad.
I’m gay and I don’t carry a change purse damnit! However, I save my change and take it in a big jar to the bank which counts it for me for free and deposits it in my savings account.
If the bank will count it for free, that’s a decent deal.
And I assumed all gay dudes carried change purses. I’m quite impressed I have a gay reader actually.
Coinstar lets you get an Amazon gift code and doesn’t take a percentage. Works for me .
I don’t use cash much, but I do have a jar full of about $25 in change on my desk. I’ll be honest – I’ll probably use Coinstar because my bank is an hour away. Otherwise it will just stay in the jar and I’ll never benefit from it anyway. Yes, I’m too lazy to roll my own change.
But if the comment from Phloyd is accurate and I can opt for an Amazon gift code, I’ll just do that instead!
Haha I like Saving Mentor’s comment!!
I think we should all get together and hash it out. It would be fun.
You know what I do? My BF leaves coins around the house all the time (men and their aversion to murses, what gives?) and I just take them and put them in my purse.
haha he doesn’t notice.
As long as it doesn’t involve paying an 11% fee, it’s all good.
LOL you’re too much sometimes. I mostly agree with you.
I’ll just say this.. Saving your spare change is a great idea for newbies to the world of personal finance. It’s a simple mind hack to convince yourself to actually hold on to your money. I used to promote this idea. Now I’m so past it.
Oh and it’s never a good idea to drop it in those machines.
“works for me” is an arrogant way to dismiss any criticism that might come your way.
It’s better than nothing. Barely.
[...] heh, leave it up to Financial Uproar to critique Finance Fox’s way of saving money (gettin’ some coin boy?) If you enjoyed this post, make sure you subscribe to my RSS feed! [...]
This is EXACTLY what I thought when I read Finance Fox’s blog post!!!!!!!!
It’s an unwritten rule that personal finance cannot include any mathematics beyond single step addition and subtraction problems. A perfect example might be Dave Ramsey’s comments on mortgages; why would anyone pay $5,000 in mortgage interest to get a $1,000 tax credit?
An hour and a half of time isn’t worth $11, in my opinion, especially if it’s something as boring as counting change. My bank charges 1%, though. You can’t argue that 1.5 hours are worth $1. No way.
[...] Financial Uproar points out possibly the worst way to save money . [...]
[...] Financial Uproar presents Possibly The Worst Way To Save Money [...]
What can I say….haters will be haters..lol
I agree with Saving Mentor, not the way to keep PF friends..LOL…but then a guy who uses Milhouse as his picture is not a friend to start with..lol
As for not having balls…I don’t think that’s the case of that, I guess I was raised a little different (maybe better) by my mother, who always said “If you don’t have anything nice to say, don’t say anything at all” ..if you had real balls, you wouldn’t use picture of a cartoon character!
Boomer….there was no attitude, it your reading into it. Don’t be so concerned with how I choose to run things, I’m sure you’ve got better things to do than be the attitude police..or maybe not..lol
Either way, I enjoyed the humor….just a tad!
I’d just use that money to pay the parking meter, or use it for tipping …. there are lots of uses that don’t involve painstakingly counting it out OR paying a ridiculous fee.
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[...] in the first place, you’re the 21st century equivalent of the Collyer brothers.) Nelson at Financial Uproar points out that using CoinStar machines is putting your money in an investment with a guaranteed [...]
[...] emergency fund when they owe 40 thousand dollars in student loans. Did this guy graduate from the Finance Fox school of personal finance? (Located in Wrong, Ontario) Wait, I forgot. It’s wrong for me to assume PF bloggers should [...]