Loose Change

By Sharon Naylor

January 13, 2014 5 min read

You'd be surprised how much the loose change around your home can add up. Those quarters, nickels, dimes and pennies in the couches, purses, pockets and on counters of American families average out to a shocking $90, according to the coin-cashing machine company Coinstar. This amount can buy quite a bit of food for your family or even a nice new pair of shoes for you, but a wiser choice would be to deposit it into your savings account so it will compound interest over time. You can use this money toward a goal or keep it as an emergency fund.

So what is your plan for loose change?

Some people gather up these weighty coins from time to time, taking them to their banks to trade in for $12 to $15 in cash, which they very likely will end up spending before they even get back home. This option might work for you, if you're the type that likes to have some discretionary money on hand.

Others prefer a more organized method, which could also turn into a lesson for their kids. Andrea Muse, founder of the blog "Frugally Sustainable," says that her family drops their loose change into a large Mason jar, and "when the coin jar is full, we sit down on the living room floor, dump out the contents of the jar, and start sorting" using paper coin rolls she gets for free from her bank. Muse then takes the rolled coins to the bank, where the tally is deposited into a savings account. "Our change often goes to pay for those extra items that we're not able to budget for such as:

--a night out complete with babysitter and all

--a new computer

--summer camping trips

--beach vacations

--further debt reduction (the favorite right now in our home)

--new running shoes

--a water purification system."

A new computer. A beach vacation. Proof that having a plan for loose change and letting it build up over time can lead to far more valuable "prizes" than $12 to spend on postage stamps during your errands.

Kids learn the value of having restraint and patience, letting savings build up over time and working toward a financial goal, and you might just get a much-needed vacation out of your coins.

Muse says that one way to create your loose change plan is to place your coin jar next to a vision board you've creatively designed with your family that displays images relating to desired goals. This visual reminder can encourage you and your family to drop their coins into the jar on a regular basis. Everyone can see what he or she is working toward. Muse advises keeping your coin jar in a high-traffic area of your home to encourage family members to easily drop in the day's change.

You might have one coin jar for family dream purchases, or if everyone in your home has different goals for his or her savings, each can have his or her own coin jar, vision board, picture taped to the jar or piggy bank. Your goal might be debt reduction, while your teen might be saving for his or her first car. Your younger children might have their eyes on computer games or toys. Your coin jar can even add up to indulgences of your choice, everything from a fine dinner out to a manicure, designer handbag or high-tech golf club.

"Pennies really do turn into dollars," says Muse. Starting small adds up. It builds the confidence and discipline to save money via loose change, which can often go unnoticed in your home. These coins can seem somewhat invisible and thus, lacking in value as you drop them into a jar, but when it's time to cash them in, the total can be impressive.

Just be sure to get the entire amount of the coins you've saved. Check with your bank to see if their on-site coin-counting machine delivers 100 percent of the coin value, not the 8 or 9 cents on the dime that supermarket coin-counting machines usually deliver. Kids can help with coin counting as a way to improve their math skills. And packing coin wrappers can be a fun family project.

While many people direct their coin accumulations into their savings or purchases, some people like the warm feeling of donating their saved-up change to their favorite charities. Loose change will always enter your home and your car. What will you do with yours?

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