The Money Jar Trap - Why Many Lose Money With A Coin Jar

[jeffrey]

Ten 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 is easy. After coming home for the day, you simply empty out your pockets and put the coins into a jar. When the jar is 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, today the coins saved in the jar may not be worth their face value when redeemed.

The problem that has arisen with the money jar game is that banks and other enterprises have figured out that they can charge individuals for taking their change. While this would have been though of as absurd a decade or two ago, it is common practice today. 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.

Some Coinstar machines have begun to offer gift cards to certain merchants at face value (the merchants pay Coinstar a fee to have their gift cards in the machine) which means that you don't lose money, but you lose in another way. Unlike cash, you are limited to purchasing goods at the particular store of the gift card you receive.

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 often can be 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 machines inside a grocery or similar store. By doing so, you will automatically have around 10% of your money subtracted for fees. Often times you can take the same coins to the grocery store cashier and they will take them for 100% of their value (you should ask the store manager if this is okay before attempting it - usually they will require that the coins be rolled with your name, address and phone number on them)

Before you take your coins to your bank, make sure they don't charge any fees for taking the money. The policy for changing coins at 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 you 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 number of coins can be troublesome, there is no reason to pay a fee to have the coins deposited.

[byusteeler]

Luckily my 2 credit unions still exchange coins free of charge and they don't want me to roll them. I think charging is rediculous. They put them in a change counter and the work of counting them is done almost as quickly as they could count paper bills then they have another machine that quickly rolls them. I think banks have just found another way to gouge there patrons.

[jltidwell]

My credit union and bank still accept rolled coins for deposit and provide the coin wrappers.

Thank you for the update on potential fees so that I can stay informed.

[baselle]

I realized that this was the case when I started my money jar.

I do these things to prevent it: add $1 when I can; go through the jar once a week with my wallet and make change for myself, which I then use for tip jars, etc (means I tip well once a week); when the jar gets to be above a certain amount - then I go to the bank and put it in savings without fail; my money jar is small, great for folded money, rotten for pennies; my money jar is at work (I know, a little dangerous!), so my tip jar solves the other nagging problem at work - the 1-5$ collection for "whatever". "Whatever" gets change; bad whateveres get pennies.

With online bill paying and stamp prices rising, buying stamps w/change isn't really a good solution for me.

[sandysaari]

In defense of the banks and credit union that do charge for counting coins....you have to understand the amount of customers that a bank or credit union have, that each day may ask for this service. It is not and occasional customer but as many as 25+ requests a day for coin counting. It may seem that it only takes minutes to run the coins through the machine, but did you ever think of what happens to them after you leave them at the bank?
The bank does not keep all of these coins to give out in exchange for bills, but some must be packaged up and sent to the Federal Reserve Bank for credit. If each bank did not do this...you may walk in one day and have to cash your paycheck for rolls of quarters! You bring in coins...the bank gives you cash....think about it.
The other issue is the machines that count the money and roll the coin. Each machine can cost several thousand dollars each for the inital cost and several hundreds of dollars a year in maintenance. Where should that cost be absorbed?
Finally, the manpower that it takes to run the coin through the machine for each individual transaction may not seem like alot, but mulitipy this number by the 25- 30 customers that come in each day to do that. If it takes 10 min. to run the coins in the machine and to roll them (we wont even count the time to get them ready to send to the fed) and you multiply this by 25 customers...you send up with a teller spending 4.17 hrs. each day taking care of loose change!!!! That is more than half of thier day!!!!
You should also keep in mind that if you are a customer of the bank or a member of the credit union...they may not even charge you for the service!!! All you have to do is ask!
From,
An experienced Banker....

[lmlhlinc]

I would NEVER use the coin counter at the grocery store -- it is a rip-off for lazy people! Just ask at your bank or credit union, and follow their rules. The credit union I used to work at counted coin for free for those who had accounts with us -- but we only counted it at certain times on certain days. If coin was brought at other times, there was a charge. It's easy enough to work around the restrictions if you know what they are.

[byusteeler]

For the banker, I see some of your points. However, coins are going to come into a bank or credit union no matter what so they already have to have the coin counting machine. Also, It takes time for a teller to key in checks, add up deposits, count paper currency etc. So the time element doesn't fly with me. It takes my credit union teller no longer to run my coins through the machine than it does for him/her to add up a few checks, key the deposit in the computer, and give me cash back. I also think it is fair to expect that you have an active account with the particular bank/credit union to receive this benefit without charge. One of my credit unions has put a coin counter similar to the ones found in grocery stores. You run the coins through the counter yourself and then take the slip to the teller to receive your cash. I like this one quite well.

[byusteeler]

Oh, I wanted to also point out that most big banks made record profits last year while many households did not raise incomes as much as the inflation rate and many people are still unemployed. I don't think a coin counter is going to "break the bank".

[cicy33]

We use the money jar saver option. Last fall to this summer we saved over $500 in change and occasional cash. I wrapped it all and took to the bank. They don't charge for coins so far. I did consider the change thing at the store but called first to see the charge, it was I think .10 on the dollar. pretty high for me. That would have meant giving up $50 of our vacation money. No way.

[CJsoccerchic]

I really like the "1$" idea instead of the change idea. But it's really weird HOW many looks I get from people when my bill is 34.84 and I count out the 84 cents in change. I mean, I'd rather count out the change, then get stuck with MORE change. In the end, everytime I go to the bank, I literally empty my wallet, I usually have anywhere from 35cents to 1.50 in change to add to my savings account. If you figure that you go to the bank 30 times a year, then you can save quite a bit.
That's my two cents!

[cicy33]

Originally Posted by sandysaari

The other issue is the machines that count the money and roll the coin. Each machine can cost several thousand dollars each for the inital cost and several hundreds of dollars a year in maintenance. Where should that cost be absorbed?From,
An experienced Banker....

I believe if I am correct they make a huge profit charging interest on loans and not paying interest worth a crap on savings. Course I could be wrong.

[CJsoccerchic]

Oh yeah! i went to the bank today to deposit a check and did the whole "empty my wallet of change" and ended up putting in 2.11$ in the savings account, SWEET!! and since I was there, I figured I'd pick up some coin wrappers, the lady behind the counter HOOKED me UP! I think I got 10 of each!! YAY!

[etswife2005]

I use my coins at yard sales... Most stuff is .25 to 1.00 so I just pay them in change. They seem to like not having to make change for me!

[CJsoccerchic]

Does anybody think it is worthwhile to get one of those coin counter things that you can but at a wal-mart or k-mart?

[abowers]

I'm not sure how much they cost, but my sister had one -- it was a bank that sorted the coins. She seemed to like it.

[Russell]

Originally Posted by CJsoccerchic

Does anybody think it is worthwhile to get one of those coin counter things that you can but at a wal-mart or k-mart?

I've been thinking about it myself but I guess it depends on how much money you'll spend on the coin sorter vs. coinstar and how long will it take to recoup the cost of the coin sorter. For example if you have a $100 in change Coinstar will charge $10 vs. $30 (or $40 ?) for the coin sorter.

[ChillPhatCat]

Originally Posted by byusteeler

For the banker, I see some of your points. However, coins are going to come into a bank or credit union no matter what so they already have to have the coin counting machine.

I agree about the time thing, that's not much different than other transactions like people bringing in wads of money. However the coin counting machine whether it's a necessity or not still does not pay for itself and I don't think that every customer at the bank should have to cover that cost because of the small number of customers that bring in coins. It reminds me of when I worked at a convenience store/gas station and people would bring in a bag full of pennies to pay for their gas claiming that I had to accept it because it was valid currency... we made them count it out on the side counter, it wasn't our job to count their money and you certainly don't want to trust someone that they already counted it.

[Tightwad Kitty]

Here in Australia we don’t have any coins under 5c so we no longer have copper coins to worry about! You just around up or down to nearest 5c on the total of the bill.

I do save all my coins under $1 as we have $1 & $2 coins and our notes start at $5 here.

As an ex-sales clerk, I can count change without any worry. I just get the bags from any bank, and then I count my change once a month and when I have a few full bags. I take it to the local fruit shop or take-away store as the banks charge these businesses $5 to buy money in change. I put the money into my wallet and then go online and transfer that amount from everyday account into my saving account. It’s a win, win for store, and myself, as I have to pay bus fare to go the bank anyway!

[Ima saver]

I bought a coin counting machine last year, battery operated. When I took my first batch of rolled coins to the bank, they told me they would have to unroll the coins to put in that coin machine. There is no charge for this. so, i wasted my money on a $25 coin counter. Anyone want to buy one, cheap?

[CJsoccerchic]

hee hee... Sorry to hear that was a waste of money... I've never heard of them not taking your word for it, they usually ask me to put my name and account number on the coin roolls so if I am short a coin or two, they take it out of my account..