The Adult Piggy Bank: A Gradual Savings Plan

This post is inspired by two recent happenings. Over the last few weeks, we have cashed in nearly $300 in coins at our bank that we will use for a mini-vacation in April. The second item was a guest post I read on Zen Habits a few weeks ago about The Power of Gradual (it was so good, in fact, that I read it three times).

The concept of an adult piggy bank is not new – many families have huge jars of coins sitting at home, waiting to be cashed in at a later date. But to be used as an effective means of saving a substantial amount of money, a number of things can be done to accelerate the typical collection period. Here are a few of my ideas:

• Implement the cash-only system. In order to have coins, you must at some point use cash. I will be discussing the cash-only method in further detail later this month, but it’s sufficient to know at this point that we use real money for day-to-day expenses. This produces a great deal of change, which is immediately saved in the jar.
• Save your dollars at the end of the week. Because we have a set cash budget for every week, any singles or $5 bills that are not spent at the end of the week are immediately deposited in the jar as well.
• Penny Wars. We have at times, implemented this classic coin game as a means of quickly raising savings while having a little bit of fun. The rules are simple: two jars for competing teams; pennies add to your jar’s balance, while any other coin subtracts from it. The “team” with a higher balance wins, but as you can tell – everyone ends up a winner in the end.
• Have an end in mind. It was important for us to understand that the money would be translated into something concrete – it makes saving worthwhile and fun. In the case of the coins, it was a small family vacation to a nearby historic town for 3 days.
• Supplement your system with bank offerings. Two programs that I have personal experience with, and that work on similar princinples, are Bank of America’s Keep the Change, and Wachovia’s (now Wells Fargo) Way2Save. Bank of America’s program transfers the difference between your actual transaction and round-up dollar amount to an existing savings account. It also matches a portion of your transfers each year. Wachovia’s plan transfers $1 for each debit card and bill pay transaction, and includes an end-of-year interest bonus. Both operate equally well and take advantage of the gradual savings advantage – I can easily transfer in over $50 each month to my Way2Save account, but rarely notice the day-to-day transactions. In a few years, the money will be sufficient for any large transaction of my choosing.

Embrace the power of gradual saving and enjoy the suprising and often unexpected results in brings when you suddenly realize you have a little more “spare change” that you thought.