Should You Save Or Spend Your Spare Change?

How do you track, store, or spend your extra coins? Do you deposit them in the bank? Drop them in the tip jar? Or have you gone cashfree and haven’t had a single greasy penny mashed into the bottom of your wallet or purse for years?

At The Financial Diet, Casira Copes describes how much money she was able to set aside by collecting spare change for a decade: 

I decided to “roll” all of my coins myself. Rolling is the process of putting the coins into paper wrappers (which you can usually get for free from your bank) so that they are collected and sealed into easily countable increments, like $2, $5, $10, etc. […] I counted all my coins one by one, for a total of $2534.60.

Not bad, right? Well… maybe. Copes explains that it took her several weeks to roll and cart her coins to the bank, which some people might view as a lot of wasted time. She also notes that, by putting the coins in a jar, she missed out on the years of compound interest she could have earned from depositing them in a savings account or retirement account right away.

Because I like to do the maths: saving roughly $253.50 per year for ten years in a savings account with 1.5 per cent APY yields $2735.58. You could earn another year’s worth of coin collecting in interest, give or take, but that isn’t life-changing money.

If you invested that money at the same rate and got a steady-but-conservative 4 per cent return, you’d end up with around $2996.72.

Adding an extra $2534.60 to your bank account in one go, on the other hand, feels like a windfall.

That’s why putting spare change into a piggy bank works, for so many people. The change is out of sight and out of mind — and when you’ve got enough coins set aside, it’s like cashing in a bunch of free money.

I’m one of those people who likes to deal with as little spare change as possible. According to YNAB, I’ve only spent $40 in paper money this year. The rest of my spending has been via credit/debit and the occasional check.

If I end up with a few coins left over after an unavoidable cash transaction, I generally end up tossing them into the nearest tip jar or wishing well.