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8 ways spare change can help you live a richer life

Matt Alderton

November 20, 2015

Some people find spare change beneath their couch cushions. Others fish it out of their washing machine. Wherever you find stray coins — or dollar bills — these small amounts of money can help you reach your financial goals.

Saving $10 a week — in change and maybe a couple of bucks — is $520 a year, says Adam Meyers, vice president of investments at Sessa and Meyers Wealth Management Group in California. And that grows over time. If you start saving at 25, putting $520 into the stock market and getting an average annual return of 6 percent, that $10 a month could balloon to around $85,000 by the time you turn 65. “Over time, little amounts of money really do add up,” Meyers says.

In October, a Louisiana man who had saved pennies for 45 years cashed them in at his local bank. The result? Inside those 15 5-gallon plastic water jugs was $5,136.14 that Otha Anders planned to put toward a dental bill. “I would never spend a penny,” Anders, 73, says in a USA TODAY story. “I would break a dollar before giving up a penny.”

Having a strategy for what you'll do with spare change enables you to make the most of it.

One strategy is to spend only paper money and save the change, resulting in “forced” savings, says financial adviser Tammy Johnston, author of “Financial Foundations,” a series of children's books about money.

Over time, little amounts of money really do add up.”
— Adam Meyers,
vice president of investments at Sessa and Meyers Wealth Management Group

“If something costs $1.03, you spend $2 and put 97 cents into your change jar,” she says, adding that placing pictures of desired goals on the change jar can help people stay motivated. “Some people put up a picture of their ideal retirement, a vacation, a home renovation, a kid's education — whatever it is that gets them excited about saving.”

Another spare-change option is a debit card linked to a “spend-to-save” savings account. Bank of America has a “Keep the Change” program, and Wells Fargo offers a “Way2Save” savings account.

“Some banks have a plan where any purchase you put on your debit card can be rounded up to the nearest $1 or $5, and that amount automatically gets deposited into a side savings account,” says Johnston.

Now that you have a savings strategy, how will you use your spare change?

Here are eight things you can do with spare change to improve your finances and live a richer life:

  1. Pay off debt: Spare change can help you reduce and eliminate debt, Johnston says. “If you have debt, especially credit card debt, dealing with that should be your first priority,” she says, citing the high cost of interest.
  2. Build an emergency fund: Spare change is a good way to grow an emergency fund you can tap for unexpected expenses, such as auto repairs or vet bills for your pet, without eating into your primary budget, Johnston says.
  3. Fund a family vacation: Spare change can help pay for your next big trip. That's what personal finance adviser Danny Kofke, author of “A Bright Financial Future: Teaching Kids About Money” does. “I have a 1-gallon milk jug that I just throw my spare change into,” he says. A few years ago, he took the change to the bank before a family vacation. “I had no clue how much we had, but it turned out to be a little over $500.”
  4. Help pay education costs:Spare change can help pay for a seminar or conference, or to finance a professional certification that will help you land  a job or promotion. Students, too, can make the most of their spare change. Scholarship search strategist Ashley Hill, CEO of College Prep Ready, says she encourages students to use their spare change to cover the costs of books, membership fees and transportation to go home on holiday breaks.

    I have a 1-gallon milk jug that I just throw my spare change into. I had no clue how much we had, but it turned out to be a little over $500.”
    — Danny Kofke,
    author of “A Bright Financial Future: Teaching Kids About Money”

  5. Make that home improvement a reality: Those jars of pennies and nickels can help fund a kitchen renovation or some other project around the house, which can be an investment for the future. “The small amount of money that you're putting into your home is going to pay dividends when you go to sell it later on,” Meyers says.
  6. Save for retirement: If you want to grow your change, put it in a retirement account. “A Roth IRA is the first place I would look as an investment,” Meyers says. “Because it's after-tax dollars that go in, you get to grow that money and pull it out tax-free.” Apps also can help with investing. Acorns, which connects to a credit card, debit card or checking account, rounds up every transaction to the nearest dollar, investing the change into a portfolio of exchange-traded funds.
  7. Give to a favorite charity: You can do some good with your found money. “Charitable contributions are tax-deductible,” Meyers says. “Plus, that feel-good peace is nice, too.” Apps like Ch?ngUr and ChangeBowl let you funnel your spare change to a charity of your choice.
  8. Put it toward everyday bills: If you're on a tight budget, Meyers suggests using change to stock up on household essentials. “I recommend taking your change jar to the dollar store,” he says. “Your dollar will go further there, and if you have a full change jar, you'll definitely walk out with a full cart.”

With so many reasons to save spare change, CPA Brittney Knies cites one reason to spend it.

“Many of us sacrifice a lot of our income to meet our financial goals, which leaves little for all those things that bring a small amount of joy into our lives,” says Knies, owner and founder of the personal finance blog “Britt & the Benjamins.”

She likes to use her spare change to treat herself — with a coffee outside home or an occasional movie. “It keeps life enjoyable and allows me to stay on track with my savings,” she says.

SEE RELATED: 6 ways to change the world (and your budget)

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