It’s so easy (and tempting) to want to invest every penny we can get our hands on. But when it comes to your spare change, there are many good reasons you should save.
It’s important to remember that it’s not the same as investing your hard-earned money.
Why? Saving your spare change is a great way to build wealth and establish good money habits consistently.
Don’t worry; you don’t have to lock your coins in a piggy bank. In this article, we’ll show good reasons why you should save your spare change and provide several simple strategies you can use today!
We’ll also share numerous ways that you can turn these saved pennies into long-term financial security.
So, if you’ve been wondering whether you should save or invest your spare change, keep reading; we’ve got some valuable information and tips for you!
Your Spare Change Should Be Saved, Not Invested
We’re all familiar with the challenge of spare change since it’s so easy to accumulate.
Whether it’s Coins we get in change after a purchase, cash gifts on special occasions, or just pocket money that all adds up over time, our spare change can quickly become overwhelming.
Rather than investing your spare change—which isn’t a great option due to the small dollar amounts—it’s much wiser to save your spare change.
Saving your spare change can help you in a few ways:
It quickly adds up
Even if you don’t try to save regularly, your pocket change can accumulate quickly when left alone.
Over time you will be surprised at how much you have saved without consciously thinking about it!
It encourages spending discipline
When you save your spare change, it forces you to think about how and why you spend money on specific items or activities since it shows what has accumulated from those purchases over time.
It helps to build an emergency fund for unexpected expenses or emergencies
Having an emergency fund is essential for financial security. Having a cushion of extra cash available can make all the difference when faced with an emergency or unexpected expenses.
Saving your spare change can provide many benefits and help you become more disciplined in spending money!
Reasons You Should Save Your Spare Change
Saving money is a great way to increase your financial security! It’s essential when you’re living on a fixed budget. When spending your spare change, saving is the best choice.
Here are just a few of the benefits of saving your spare change:
- Having an emergency fund: A large savings fund can cushion against unexpected expenses, like car repairs or medical bills. Knowing that you have a large sum ready and waiting in case something happens is much more reassuring than having no funds.
- Take advantage of compounding interest: By leaving your money in an interest-bearing account, you’ll get back more than you put in, thanks to compounding interest. Over time this can make a huge difference in how much money you have saved!
- Investing for long-term goals: If you’ve got long-term goals like retirement or buying a house, investing that spare change in stocks or other investments might be tempting. However, saving up first is better to avoid losing money if the market takes a downturn.
Reasons to Prioritize Savings Over Investing
Have you ever considered what your spare change could do if you saved it? Putting your spare change in a piggy bank may seem daunting, but savings are essential.
Even more important than investing your spare change. So what are the reasons to save your spare change over investing?
1. Low Risk
Savings are usually a low-risk option. You can store your money in a savings account, which will likely stay there while it accumulates extra cash with the interest rate.
On the other hand, investing your money means its value can go up or down depending on the stock market and economic conditions. This means that you could end up losing some of your hard-earned money.
2. Accessibility
Saving money is also relatively easy to do. When you save, you don’t need knowledge about stocks or economics–you need to be able to deposit and withdraw your money when needed.
Investing takes more skill, so it’s best for those who have researched enough to dive into the stock market confidently.
Saving is also more accessible for many people because of its low minimums–in many cases, you can open a savings account with as little as $1!
Investing often requires larger sums of money that some people may not have or have access to immediately.
It’s clear why saving should be prioritized over investing in your spare change: You have low-risk access to immediate funds when needed without having to take chances with the stock market.
How to Start Building Your Savings Account
We’re sure you already know that saving your change is essential to building your savings account.
But how do you start putting your spare change to work? An easy way to get started is by setting up automatic transfers from your bank account or credit card into a savings account, which will help boost your savings effortlessly.
Automatic transfers can help you build your savings over time while allowing you access to cash when you need it.
Choosing a high-interest savings account with a competitive interest rate can make the most of your saved money.
Plus, most banks offer apps that allow you to set up personalized reminders—great for forgetting or getting too busy to transfer money into a savings account.
At the same time, finding ways to save in other areas of life is essential—for instance, by sticking with budgeting plans or reducing spending on unnecessary items. It all adds up!
The Benefits of Automating Your Savings Plan
You might think that investing your spare change is the way to go, but automating your savings should be your top priority.
Why? Let’s explore some of the benefits of automating your savings plan.
It Works for Your Lifestyle
Not everyone has a regular job or income, and it can be challenging to save money if you’re self-employed or a freelancer.
Automating your saving plan is a great way to ensure that you’re consistently putting money away regardless of how much income you earn monthly.
You Develop Good Financial Habits
Automated savings plans help you create good financial habits by letting you put away money immediately — before you spend it.
This helps you learn to budget more effectively and manage your money by ensuring that saving is integral to your financial plan.
You Have a Plan in Place
You can eliminate any guesswork regarding saving by setting up automated savings plans.
You’ll know exactly how much and when money is moved into an account — and this makes planning a budget easier since you’ll know exactly how much money is going into savings each month.
Moreover, with an automated plan, there’s no need to worry about forgetting or being late on payments.
Because the payments are handled automatically! Plus, with lower fees for automatic transfers than manual transfers, automating can save some extra cash too!
Try Different Strategies to Maximize Your Savings
It’s easy to throw your spare change into a jar and leave it there, but if you want to maximize your savings, it’s worth trying a few different strategies.
1. 52-week money challenge
The first option is the 52-week money challenge, where each week, you save an amount of money equal to the number of the week.
So in week one, you’d save $1; in week two, $2; and so on up to week 52, when you would save $52.
This steady increase in savings helps you build better habits over time and helps you commit to regular savings.
2. Budgeting
Another great strategy is budgeting with irregular income. Every time you get paid, no matter how often, decide how much of your income you can save each time.
Even if it’s just a few dollars, ensure that goes straight into savings. This approach helps ensure that every month or pay period ends with some extra money saved.
3. Financial Goals
Giving yourself a financial goal can also be a great motivator. For example, add $100 or more in monthly savings.
This helps put your spare change towards something meaningful and gives you something concrete to work towards over time.
By trying out different strategies for your spare change savings plan, you’ll be able to boost your financial security and get closer and closer to achieving your financial goals.
Tips for Overcoming Common Saving Obstacles
You may already know the reasons why you should save your spare change is essential, but knowing is one thing, and doing it another.
As the saying goes, ‘Easier said than done.’ Experts estimate that less than 1 in 5 Americans save regularly, so it’s clear that overcoming obstacles to saving can be difficult. Here are some tips for getting over common roadblocks to saving:
1. Automate Savings
Set up an automatic transfer from your checking account to a savings account every month.
This way, you won’t have to think about it—the money will just get transferred. Automating your savings is one of the most effective ways of ensuring money doesn’t get spent before it gets saved.
2. Monitor Your Spending Habits
Sometimes, simply understanding why you don’t save can help you change your lifestyle.
By tracking your spending habits and seeing where you can save more, it can be easier to free up more money for adding to your piggy bank or savings account each month.
3. Make a Budget and Stick To It
Start by writing down all your expenses and prioritizing them in order of importance – rent, food, gas, etc.
Do this to understand exactly where every cent is spent each month to create a realistic budget for yourself.
Then stick to it! Keeping this kind of spreadsheet or app with all the facts and figures will remind you to stay on track with saving goals.
Conclusion
When it comes to your spare change, there are many good reasons to save it.
Saving small amounts of money in a secure place, like a savings account, can help you reach your ultimate goal of financial security.
Not only will your money be safer, but you can also benefit from several financial tools and technology, such as automatic transfers and budgeting apps, that make saving and managing your money easier.
By putting your spare change away, you will be allowing yourself to build a healthier financial future.
Don’t let the small amounts of money you have now slip away into riskier investments – take control and save it for something more secure.