Most people have a jar of coins that sits in an area that they can toss their loose change into. People usually save money that way for a rainy day and it’s easily accessible. These are a couple of advantages of having that jar of coins, however, is it the best technique to saving money?
3 Reasons Why a Jar of Coins is Not the Best Savings Technique
1. Easy accessible
This can be a catch 22. While you are able to have easy access to the money that is in the savings jar, it can also be a hindrance. Since the savings jar is in plain view, you may be more likely to grab some coins or dollar bills if you save those as well and use it in your everyday spending. You may even try to convince yourself that you would repay yourself back in a couple of days or within the week, but sometimes that doesn’t happen.
2. Money is at risk
Saving money at home can be somewhat dangerous and risky. For example, if your home is attacked by a robber and the money is found, then you will lose everything and there will be no recovery for it. Another reason is that if the home would catch on fire, it will be the same issue as someone stealing it. The money will be burned because it may not have been in a fireproof vault or safe.
3. Not earning interest
When money is saved in a bank, it can collect interest. The longer the money is saved and more money is added, the more interest it can grow. When the money is saved in a jar, there is no interest earned at all.
If you choose to use a jar to save coins or bills in, then when you have a large amount, it can be a good idea to open a savings account to place the money into. You will be able to earn interest, have a safe place to save the money and it won’t be as easily accessible.
