Can you save $1 a day?
I bet you can collect $1 every day. I know I find a lot of change around the house when I clean the counters and the top of the washing machine. As I was cleaning my floor, I kept finding change that I needed to put in the change jar I keep on the mantelpiece. Every few days, I open my wallet and pull out a variety of pennies, nickels, dimes, and quarters that should also go into the jar. So what do I do with the change?
Well, I keep it. It is, after all, money. But I also want to teach my kids the value of a dollar, and how with compound interest, a little bit of savings can really add up over time. I have a goal of saving $1 every day and I usually meet it. Sometimes I add more, especially right after I’ve done a few loads of laundry. In my house, the best place to find change is in the pockets of dirty clothes. You could even write down a couple of paper bills, and according to the rules, anything less than $5 goes into the change pot.
When do I empty my change jar?
I’m lucky because my bank has a free exchange machine for customers. If you use one of those supermarket change machines they charge you a lot. The one closest to me charges 8%, so if I save $50, they take $4. The bank does not charge, and the voucher can go directly to the teller so that he can make a deposit. Think about it. If you can save $1 a day, that’s $30 a month, or $360 a year. At 3% interest, you can save $4,000 over 10 years. If you can get your kids to do this for 30 years, they should have $15,000! And I did this calculation also taking into account a tax rate of 28%.
Think a little bigger and your savings can grow much faster. If you can put aside $5 a day or $150 a month, you can save $30,000 over 15 years. If your kids are only 15, tell them to start this habit now, and then they can pay cash for a car (hopefully) when they’re 30.
Where do you get $1 or $5 a day?
I know my biggest weakness, the little spending that adds up to a big spending habit. I’ll stop at the neighborhood pharmacy for a couple of things I need, say dog treats or soap. But when I get to the checkout counter, my basket is full of things I never intended to buy. A $5 purchase turns into $50 worth of stuff you just didn’t need. Debit and credit cards make it very easy to go over a budget.
I learned that I need to carry cash with me like I used to before debit cards became so popular. I give myself cash every week and force myself to use it to pay for things at the store. Sometimes I blow it and need to get more cash out. But I am aware that I exceeded my budget, so I don’t spend as much as I used to. Also, it’s inconvenient to find a bank or ATM, which helps limit my purchases. When I used my debit card for everything, I didn’t keep track of how much I spent, so this really helps.
For example, when I’m running errands or doing business, I may decide to stop for coffee. If I’m trying to build up my weekly cash supply, I’m much more likely to buy a $1 cup of coffee at a convenience store than a $5 cup of coffee at the local coffee shop.
Try it for 30 days
- Allocate cash to spend on store purchases. Some weeks you may need to take out more money than was allocated, but that’s okay if you have the money. I bet you still spend less than you would have when you used a debit card.
- Try to put any loose change or small bills you find in a change drawer. Set a reasonable goal of finding at least $1 a day. By the end of the month, see if you have enough to make a bank deposit or treat your family to a night out that doesn’t require a credit card!
I think you’ll be a proud saver, and these tips will help you get into the saving habit. It will also be a good example for your children.