Hundreds of thousands of people place their extra change into a jar or bank every night when they return home thinking that they are saving money. In reality, the dynamics of saving coins has changed over the last 10 years so that by placing your extra coins in a jar, you may actually be losing money. This is the new money jar trap.
The money jar has been a classic way for people to save money for generations. The concept was easy. After coming home for the day, you simply empty out your pockets and put the coins into a jar. When the jar was full, you take it to your local bank, have the coins counted and place the money into your savings account. While this sounds simple enough, the savings generated in the coin jar may not be worth their face value depending on how you redeem the coins.
The problem with the money jar game is that banks and other enterprises have figured out that they can charge you for taking your change. If there is a way to make a buck, you can be sure that banks and others will try to take it.
Take the convenience of changing your coins at a grocery store. CoinStar and other businesses will take your change and give you a receipt that you can use for your grocery shopping, but they'll also take a huge fee to do so. In effect, you are trading the face value of your coins for something worth less than face value.
More and more banks are also beginning to charge you to count coins if they will accept them at all. With the current rates that banks are paying on savings accounts, you'll likely have to leave the money your received for your coins in the bank several years just to break even with what you initially had.
What this all comes down to is that for many, keeping a coin jar is the same as losing money. Where it once was a great way to add to your savings, it has become as wasteful as keeping a balance on your credit cards. We have come to a time where the coin jar can actually cost you more money than you save.
There are a few steps that you can take to make sure that you aren't actually losing money when you think you are saving it. First, you want to make sure never to have your coins changed at a grocery or similar store. By doing so, you will automatically have around 10% of your money subtracted for fees.
Before you take your coins to your bank, make sure they don't charge any fees for taking the money. The policy for banks varies widely. Some will charge for loose coins, but won't charge if you roll the coins yourself. Find out what charges exist and if any do, consider switching banks. Credit unions are usually better at not charging fees for taking coins than banks.
If you can't find a bank that will take coins without charging you, then use the coins in your everyday use. You're much better off doing this that letting them sit in a jar where they will ultimately lose money for you. You can amend the money jar game to benefit your savings if this is the case.
Instead of saving coins, move up to $1 bills for your money jar. In this scenario, you'll be doing exactly what you have been doing, but you'll be saving $1 bills instead of change. You don't spend any $1 bills you receive, but any coins you receive are fine to use. That means all purchases have to be made with coins or large bills ($5, $10, or $20 dollar bills). At the end of the day, you place all your $1 bills into your savings jar. Since banks will not charge you anything to deposit $1 bills, you avoid the fees your would get for the change and save even more money than with coins.
If you think that changing the game will keep you from saving, another way to change the coins is to take them to your local post office and use them to buy stamps out of the vending machines there. By switching the coins for stamps, you get 100% value for your coins which is better than paying fees to have the coins switched to bills.
In the end it's important to remember that coins are legal currency and you can get full face value for them by spending them a little at a time. While a large amount of coins can be troublesome, there is no reason to pay a fee to have the coins deposited.
About The Author: Copyright (c) Jeffrey Strain. He is owner of http://www.savemoneygames.com - a website dedicated to decreasing debt through money saving games.
The only thing about change jars that causes me problems is pennies, the rest I use for small requests (soda, lunch money, etc.) Pennies keep adding up, don't seem spendable anymore.
I like the dollar bill idea, might start that. Without my kids being allowed to help themselves when needed as we've always done with the small change.
I Was Wondering - Does the money come out or does it give you a ticket which you have to give to someone?
Editor's Note: I assume you are talking about the Coin Star machines. They give you a slip that you take up to the cashier and can either use it to buy groceries or cash it in for cash.
I save up a bunch of coins and roll them myself. Instead of paying services charges for depositing them into an account, I use them to pay bills at the bank.
If you have an account at a bank, they count the coins for free. I know mine does. They have a machine that you dump your coins in and they give you a receipt. I have never had to pay a fee. The machine asks if you have an account there or not. They probably wouldn't know if you do or not if you just get the cash.
I have never had a problem taking in rolled coins to my bank (Bank of America). However, I used CoinStar once. I counted my coins before I took it and they shorted me. The fee was taken into account. I am not using a CoinStar machine again.
I have worked as a cashier in retail and I think it would be a rare instance where they did not take coins.
you can take your change (unrolled) into certain National City Banks and they have a machine that counts it for FREE. They convert it to currency for no charge.
My credit union (First Tech) has a free self service coin counter in their lobby. I think that these little services go a long way to keeping my business.
Coinstar has a new policy that you can get a gift card for Starbucks or another store and they waive their fee. What I sometimes do is let the Coinstar machine count and pay out for all the pennies (50 cents a roll) and nickels ($2 a roll). (Get a gift card so no fee) All the dimes, quarters and half dollars I roll myself because each roll is worth a lot more.
Here my bank will not take rolled coins unless you have your account number written on them. It is much easier to write your account number on the rolls BEFORE you put coins in them.
Another thing to remember is to look for old silver and all copper coins while you are sorting. You might find something of value.
First commentor said: "banks charge you to hold your money."
Actually, banks PAY you to hold your money. They CHARGE you to loan you money. You might want to find a new bank. :)
Avoiding any fee is common sense, as long as it can be done without too much effort -- and that's what the article was about. How much "convenience" is worth is an individual choice, but it's silly to just roll over and say "but that's life" when a minor change in behavior can save you 8.9% (what CoinStar charges).
Sure you may be charged a fee for currency conversion, but that's life. Dealing in anything but cash costs money. Banks charge you to hold your money. Credit cards charge you for convenience. The machines in my area only charge 1%. Not too bad when compared to everything else.
I do the money jar things and use the money I accumulate as my spending money when I go on vacation. I roll the coin myself, take it to the credit union and get my travelers checks there(They are free at my CU). I don't even have an account at a bank. I do all my banking type business at a credit union!
Perhaps the author lives in a large city, but small towns still have free coin counting at banks. And businesses like getting coins so they don't have to go back to the bank. My favorite way to save money is to round out my checkbook amounts to the next highest dollar, and now i have $800 more in the account then in the checkbook register! That's easier than coins or saving dollar bills isn't it?
The fees mentioned in the previous post come from using a machine by "CoinStar" or similar business. You dump your coins in, the machine sorts & counts them & gives you a receipt or certificate for the value of your coins -- less a fee. Thus, you are not receiving face value for your coins. Sometimes the receipts are able to be used to buy merchandise in the store where the machine is located. (Not sure if any of these machines give you actual $ bills.)
That's why I take mine to retail stores! Especially on weekends when they need it most as banks are closed. Mall stores are best! Gas stations take it as well and a store CANNOT charge you if you are paying with rolled change for something! Take in a roll of quarters for a 2 dollar item and you get change back in bills. I have no idea where you live that grocers are charging to take change, but I have NEVER heard of THAT!
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