Laying a Healthy Nest Egg

Financial advisors always suggest saving and investing as the best way to plan for a secure retirement. Many average people see the wisdom in these suggestions, but feel that they can’t realistically plan on investing because they don’t have the “extra money” and may feel that there is no such thing as extra money.

But, what about spare change? Everyone has spare change, right?

Start small by saving your spare change. Get yourself a good sized jar and have it become your coin jar. Every day, at the end of the day, put all the change that you have into the jar. You may be surprised how much you have. Most people are able to average about a dollar per day in change. At the end of the month the jar will have about thirty dollars. Deposit that money into a savings account just for this “extra money.”

After a year of doing this you’ll find that your “extra money” has grown to nearly four hundred dollars, plus interest. Even if you don’t move those funds into a more lucrative investment like stocks or mutual funds the balance on the account will grow to $11,329 over thirty years, assuming a paltry interest rate of 0.10% that many of today’s simple savings accounts carry. You couldn’t retire on it, but it’s not bad for extra money. Assuming that you do move the first thousand dollars that you accumulate this way into an account that pays more interest, the potential for growth is enormous. You can easily turn that dollar per day in extra money into nearly seventy thousand dollars over thirty years. Again, it’s not enough to retire on, but wouldn’t you like to have nearly seventy thousand dollars extra just lying around?

Savings like this are a good start in planning your financial future. Obviously you do not want to plan your entire retirement around saving your spare change, but it’s a good illustration of the potential a little financial discipline has.

The trick to making that extra money become more extra money is in finding the best ways to grow your money. Once you’ve saved even a few thousand dollars it is time to seek the advice of a financial planner who can show you how to really tap into the earning potential of the money you have.

All this can come from your spare change.

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