Change From Purchases

By: Lynn,

Budgeting IdeaHey Mike and Vicki, I’ve found it helpful to set aside all change from purchases made with cash in a glass jar for a year and then count it up and use it for something nice. I have two jars, a small jar in my truck and a large one at home. Whenever I get home, I dump the contents of my “truck jar” into my “home jar.” I’m not sure what to call the money in my budget, but the amount can be substantial depending on how many cash transactions I’ve made during the year.

Response from Vicki:

Hi, Lynn,

Mike and I are glad that you have landed on a savings plan that works for you. We would be interested to know the average amount of change from purchases that you make.

For example, if you had a purchase for $12, would you give the cashier $15 or $20? The difference between the two would be:
* $15 – $12 = $3
* $20 – $12 = $8.

If you were to save, let’s say, $3 average per transaction three times a week, that’s
$9 * 52 = $468.

If you were to save $8 per transaction twice a week, that’s
$16 * 52 = $832.

In some quarters, that “rounding” amount is put toward helping folks with electric bills or other philanthropic efforts.

OK, about where to put change from purchases in your budget, I would say under “Savings” since that is what it is.

We’re glad that you have developed the discipline not to touch the money in your “truck jar” or “home jar” for a whole year! Wow! Some drivers might see that money sitting there and find it downright irresistible to spend it after it has accumulated for awhile.

Some drivers may have family members who might be tempted to “borrow” money from such a jar. If you have folks at home who are tempted like this, please decide whether or not it is worth it to you to invest in a small safe (your choice of key or combination lock) to better protect your savings.

It is always good for a driver to have an emergency fund, but you didn’t say if you had one or not. When Mike and I drove team and again when he drove regionally, we/he had a “truck fund” to pay for truck expenses like cash-only tolls or CAT scale tickets. We/he would always declare truck expenses on each trip sheet and get paid back by our/his trucking company. If you have not yet set up an emergency fund, please consider doing that.

For another perspective, you do realize that just putting your money in a jar doesn’t earn you any money, don’t you? That is, it can’t [work] for you to “compound interest.” Albert Einstein has been credited with saying, “The most powerful force in the universe is compound interest.” (no longer online)

Extra money can be used for investments to earn even more money for you. Of course, depending on the investment you choose, your “seed money” can either increase or decrease in value. We were personally blessed by making an investment that greatly increased in value over time, thus allowing us to make a dream come true.

Each professional truck driver has his/her own set of priorities and goals. If you are content with your priorities and goals, great!

If you determine, as Mike and I did years ago, that there are investment strategies that can multiply your saved money, why just imagine what the change from purchases that you’re currently saving can do for you! Check out this Compound Interest Calculator to see what you could be doing.

Your method of setting aside change from purchases is good and it sure beats nothing. But please consider putting your money to work for you in safe investments that you research yourself and are confident will grow over time.

Keep up the good work. If you decide on an investment strategy that works well for you, please feel free to share it with us and our readers.

Thanks again.

We wish you safe travels and lots of money saving opportunities on the road.

Best regards,
Vicki Simons

—– Comment —–
Stunned by your challenge by Lynn
Date: Jul 24, 2012

Vicki, your response stunned me at first. Here I thought I was doing pretty good on saving money in glass jars. You thought I was doing ok but that I could do better. That shook me up.

I thought about your advice for a while and realized that you were right. My eyes are now open to the next step in my savings program.

Thanks for challenging me. Keep on challenging the status quo.