Create A Virtual Piggy Bank For "Spare Change" From Debit Card Transactions

Consumerism Commentary wants you to “put your savings in hyperdrive.” Funny, we thought that’s what we already did, which is why our savings raced light years away from our bank account. But Flexo, in his series of posts this week on how to save, uses a more grounded definition of “hyperdrive” and offers suggestions like opening a high yield savings account, saving your spare change (or the contemporary equivalent of spare change if you pay with a debit card), and automating your savings. Yes, these are simple suggestions, but that’s what makes them easy to remember and easy to implement.

We think the spare change idea is a particularly fun way to put aside a bit more money without realizing it—and if you don’t carry change anymore, you can be more creative about it:

On a weekly basis, take a look at all your debit card and credit card transactions. Round each expenditure up to the nearest dollar. Total the excess amounts and transfer the sum from your checking account to a special high-yield savings account earmarked for whichever goal on which you happen to be focusing.

Flexo also points out that some banks and credit card companies offer special “spare change” cards, so you may even be able to find an automated solution.

“Put Your Savings in Hyperdrive, Part 1: Open a High-Yield Account” [Consumerism Commentary]
“Put Your Savings in Hyperdrive, Part 2: Keep Your Change” [Consumerism Commentary]
“Put Your Savings in Hyperdrive, Part 3: Automate Your Savings” [Consumerism Commentary]
(Photo: Getty)

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  1. Falconfire says:

    Basically its doing what “Keep the change” from BoA does. Sadly though I have found it really doesnt work all as well as it should.

  2. weakdome says:

    Is this in case you’re too lazy to just set up a (weekly/bi-weekly/monthly) automated savings deposit plan?

  3. MercuryPDX says:

    This type of savings may not be worthy of your retirement plan, but it can mean the difference between renting an economy car and a convertible on vacation.

    You too can be a DEEKER no more.

    I wish my bank did a “keep the change” program. Don’t wanna join BOFA to get it. :(

  4. TCameron says:

    I view the spare change cards useful to those who use them almost exclusively throughout the day. For those who use cash, to transfer daily transactions to a debit card will initially leed to some unwanted expenditures as there is not tactile sense of money, and increased spending. Just a thought.

  5. zarex42 says:

    It’s a silly idea, and does not work. You are much better off with a decent 1% (or more) cash back credit card. Plus, a debit card doesn’t have anywhere near the protections a CC has, and really should never be used.

  6. That70sHeidi says:

    @Falconfire: How so? I have no problem remembering to go through my accounts once a month (when my paycheck hits) and tallying up what to transfer to my savings account. And I use my debit card QUITE a bit. It’s pretty hard to screw something this simple up. I mean, BoA manages to do it, surely Consumerists can wrangle the concept under control.

  7. MercuryPDX says:

    @That70sHeidi: I also do the $50 per paycheck ($75 starting next week), and would continue to do so after(if) my bank offered this.

    My change jar is a shadow of its former self because I don’t carry cash anymore. The idea of it being automatic, happening every time I use my card is more attractive to me than figuring it out on my own the my account statement and a calculator.

  8. PinkBox says:

    I use BoA’s Keep the Change program, and I usually end up with a good $20-$40 a month end up in savings as a result from that alone.

    It might help that I always tally up tips and such to .01c so the remaining 99c will go to my savings.

    And yes, I also have a set amount that automatically goes to savings each month also.

  9. hellinmyeyes says:

    @weakdome: The bottom line is that any saving helps. I regularly accumulate $20 in rolled coins change from cash transactions as frequently as monthly sometimes, which is a hugely significant boost over any high-yield savings account (at least when you factor in the balance and my income, etc). I suspect I could save easily $50 a month off this sort of plan.

    I don’t think this is a “lazy” mechanism, just one of many that should be used in concert. If you don’t have good enough income or low enough expenses yet to save on a regular basis, this is a great way to start, and it’s certainly a method that should be used even after you do get a high-yield savings account and set up a regular savings plan.

  10. zundian says:

    @causticitty:

    But the Keep the Change program is such a scam! You’re putting that extra $20-40 on your credit card where, unless you pay it all off at the end of the month, and they don’t accumulate interest daily, the interest rate on the added debt is more than the interest rate on the savings!

    How is this actually a prudent form of savings?

  11. kamel5547 says:

    @weakdome:

    Not really as it would be far more work to add up all your transactions and round them up.

    This makes no sense compared to an automated-transfer. If your bank does it automatically, thats fine, but if your going to have to do the math yourself, take a guess and jsut ahve that amount transferred automatically every month.

    The only good thing I could see about this is that in theory the amount would go up as you spend/make more, where as an automated transfer would only go up if you purposefully raised the amount.

  12. MercuryPDX says:

    @zundian: It’s on your check/debit card, and is not a credit card. BofA also does matching: “We match 100% of the amount of your Keep the Change transfers during the first three months after you enroll, and we will match 5% thereafter. The maximum total match is $250 per year.”

    Sooooooo jealous.

  13. MercuryPDX says:

    @kamel5547: I would. It would be “try to make the total $X.01″.

  14. bigboat says:

    Why does the BoA program not work?

  15. That70sHeidi says:

    OK, maybe I’m weird, but I LIKE going through my checking account and doing this rounding up. Often I’ll throw a few dollars extra in to the total amount so I have a nice round number at the end.

    I also pull out my expenses into a spreadsheet and graph what percentage I’ve spent on food vs. craft supplies, or how much I spent at Burger King vs. Other Fast Food, etc. Once you get the hang of pivot charts, nothing is safe!

    I also do a $5 a day savings (which only happens weekly, darn them) so it’s $35 a week direct savings as well. Some months I may have to wait a few days for payday to get a new stick of deoderant, not because I’m broke but because I’m enjoying seeing the $300+ padding in my checking account. When I really was broke, seeing TWO digits in my balance – EVER – was a cause for celebration.

  16. benh57 says:

    I don’t get the point of going through and doing the rounding up exercise. I just have a monthly $200 transfer to savings. (used to be much more.. then i got a condo :P

  17. choinski says:

    I rarely use cash, putting it mostly on a debit card. Even with that, I rarely exceed $10 in ‘kept change’. The big pain in the ass is balancing the checking/savings account, because now there are 30-40 literally ‘nickel and dime’ transactions.

  18. Exek says:

    I do Keep The Change with Bofa and also opened up one of the Patriots MyExpression acts which instead of the 5% match on the keep the change it gives me 10% match. I also pay myself first by having my direct deposit broken into two one goes with most of the money into my checking act and then 5% goes into my money market savings act. without breaking a sweat I’m saving $$

  19. Trick says:

    The idea is great until you try tracking the spare change with a financial program like Quicken. I track all the money I spend and input receipts all the time. I can tell you the sales tax from fast food vs. household items… yes it take a little work to track but well worth it. I know where my money is going, good and bad.

    I tried this myself without the help of services lie BofA and found that it is hard to track expenses. I constantly had to do transfer after transfer to keep up and the time wasn’t worth it overall. Plus the accounting issues of finding a unique charge…

    Now I just add an additional $20 to my savings to cover these small amounts :)

  20. jeff303 says:

    Uhh make sure to pay off your car loan first before you start transferring your dimes into “high yield savings”. Saving 5% (or whatever your loan is) after tax is way better than getting 4% pretax.

  21. forgottenpassword says:

    That’s a pretty damn cool piggy bank! Where can I get one like that!?

  22. MercuryPDX says:
  23. ludwigk says:

    @jeff303: How is 5% after taxes any different from 4% pretax? Also, how would your personal savings be pretax anyways?

    Assuming the national average of around 30% taxation, 4% pretax is going to be about 0.3% better than 5% after, but it doesn’t matter since the 4% is post tax, plus the interest is taxed in most cases as income.

  24. weakdome says:

    @anyone: Yeah… I don’t know. This just didn’t seem like an incredibly brilliant idea. I always thought the “keep the change” from BOA would be nice, but only IN ADDITION TO a regular savings plan. It’s not a savings plan in itself, unless you also happen to make several hundred purchases a month all with less than 10cents in change so you rack up that extra $$. Stick with a regular savings plan that auto-deposits from your checking. Better yet, have your company direct-deposit into checking AND savings, so you take yourself completely out of the equation. It works.

  25. lesbiansayswhat says:

    @weakdome: I did that with Chase until they randomly decided to take $4 out of the last $25 deposit as a ‘fee’ even though I was never charged a fee for the savings account after being with them over a year. When I called about it they acted like they had always had this fee and that it wasn’t even consistent. When I had 12 cents in there they took out 12 cents, ‘Oh if there’s not much much in there at the time they’ll just take what’s in there.’ Instead of filing a complaint or even looking into it more I stopped transferring my money to them and am currently looking at other banks.

  26. ShadowFalls says:

    This sounds like a whole lot of effort for nothing. If you just put the money aside every month and believe like it does not exist, you can just as easily save. All this effort involved is just a waste of your time, time which you could use doing more productive things.

  27. firedudemom says:

    Bank of America does this for you for free. Rounds up every debit card transaction to the nearest dollar and puts the change in your savings. Efforless.

  28. jeff303 says:

    @ludwigk: Er, no. Let’s say your car loan is 5%. When you make payments on the loan it’s from your after tax money. This is different from, say, a mortgage loan where the interest is tax deductible. So you are paying 5% on some balance from your after tax money.

    Now if you open a savings account that earns 4% interest, that is 4% on your principal before tax. At the end of the year the bank will send you a statement (1099-INT) showing how much interest they paid on your account for the year, and that counts as income on your taxes (that’s why I call it 4% pretax).

  29. Abbott says:

    I have this from BofA and while it is nice as an idea I never end up saving more than $2-4 a month because I seldom use my debit card.

  30. hellinmyeyes says:

    @Trick: It’s not hard at all. At the end of the month, export your expense transactions for your checking account to an Excel spreadsheet. (CSV/XLS/TAB export is what you’ll need.) Then, remove the rows for all the expenses you feel shouldn’t qualify for this type of savings (pretty much bill payments, I guess). Create a column to the right of the expense amount, and fill it with “=ROUNDUP([insert expense column ref],0)“. That will round the transaction amount to the next dollar. Then, create another column to the right of that that effectively does “=[roundup col ref] – [trans col ref]“, and you have your round-up amounts. Total (“=SUM()“) those at the bottom, and that would be your monthly savings obligation.
    Obviously, you need to be keen on basic formulas and references, but it’s really easy once you’ve done it once. You can make this a monthly task each month before/after you balance your check statement.