In a previous post I spoke about a method of saving called skimming. This is the process of checking your bank balance each day and moving the small change from your current account over to your savings account. Each day only a small amount is saved but over time this can really add up. Of course, this method doesn’t work for everyone. For those who prefer to use cash, a more tactile method can be much more effective. Saving money in a piggy bank isn’t just for kids after all.

Saving money in a piggy bank isn’t just for kids

Many people who choose to take control of their finances like to use cash envelopes to pay for things. This is for a couple of reasons. Firstly it helps with sticking to a budget. The money attributed to each expense is physically placed in a named envelope making it difficult to go over budget.

Secondly it makes spending money more intentional as you are physically handing over the cash and therefore become more aware of how much is being spent at any one time. If you are left with an empty envelope before the end of the month you are required to physically withdraw more cash in order to over spend.

All going well however, you will have money left in your cash envelopes at the end of the week or month.  We often end up with loose change in our pockets when paying with cash too. Whether it’s a little or a lot, having money to spare is always a good feeling! But where does it all go?!

If you are not strict with your spending, it disappears. Honestly, if I didn’t know better I would swear it was magic and I know many of you will relate to this. You have £10 in your purse or wallet. You spend £5.20 on a few things at the shops. That should leave you with £4.80. Of course, you pick up something small here and another thing there and suddenly it’s gone. All of it.

Now £4.80 is not a lot of money. It won’t cover any of your bills. It probably wouldn’t even get you a full lunch nowadays. So why worry about it? Well, if £4.80 of your spare change is disappearing once a month, that comes to £57.60. If that amount disappears each week? That means that a whopping £249.60 is vanishing from your pockets.

As the old adage goes that I’m sure all of your grandparents have repeated to you many times before, look after the pennies and the pounds will look after themselves. Keeping track of your money makes such a huge difference to your financial health. Even the tiny amounts.

Keeping something as simple as a piggy bank in your house could be the difference between watching your spare change disappear on unnecessary “things” or becoming a holiday for your family. It could mean having a worry free Christmas, or of course it could mean becoming debt free sooner!

Of course, you don’t need to use a novelty pig shaped bank. Use an old coffee jar, a vase or anything else that comes to hand. Place it next to the spot where you’d usually put your handbag or empty out your pockets. Then get into the habit of throwing any spare change in each day. You may choose to add small coins only or go as far as to adding everything other than notes. Figure out what works for you.

As with any habit, this can take a while to become the norm but be persistent and make it a normal daily practice. Importantly, try to avoid dipping into it throughout the week when you’re short for change. Remember, if you’re using cash everything should already be budgeted for. If you need to, put a lid on your jar which is hard to get off to discourage any spending.

When we were kids, being handed a pound coin was the most exciting thing. Heck, 10p was amazing. Yes as adults we need a little bit more to survive now, but I think that it’s so important that we revive our excitement in those small amounts of money. Throw all of those pennies in your piggy bank and watch how fast they grow!