Talk to our finance specialists today 1300 257 426

Do Piggy Banks Really Work?

By: alphafinance0 comments

Remember those days when piggy banks were all the rage? As a child, I’d always get excited to put spare change (or rather, loose change of my grandparents) inside this bright pink, ceramic piggy bank I had as a child. I remember lifting the little piggy everyday just to get a feel for how much more I need to put in before I get to smash that thing (with parental supervision of course), count my savings, and finally spend that money on toys and lollies. You probably have a similar story with a little piggy of your own when you were younger. You probably filled up several of them (or the same one several times), and were able to get yourself a really nice toy or some spanking new shoes. The question now is: Do you still have those habits today? If you’re like most adults, you probably don’t use a piggy bank anymore and opt instead for the more “grown up” bank account. There’s really nothing wrong with that, but what if I tell you that  you’ll be able to change your spending habits for the better and build up a substantial cash reserve — all with a simple piggy bank?

Visuals Affect Spending Habits

The tricky thing with using credit cards is the fact that you don’t get to really see just how much it is that you’re spending, this makes you more prone to impulse buying. The thing about starting a piggy bank is that you’d be forced to use more cash than credit for this to work. Now, the more you spend, the less cash you would see in your wallet. Seeing the money disappear from your wallet will definitely make you rethink whether or not you really need an Iphone 6. If you really think about it, you probably spend on a lot of (seemingly) little things everyday without noticing it. It’s only when you put them together when you realise how much they can actually amount to. Let’s say you spend around $3.50 a day on coffee and pay with a $5 bill every time. Try putting away the change ($1.50) every day. In six months, that would grow to be more or less $270! When you see the potential of doing something as simple as putting your loose change away at the end of each day, you’ll be more inclined to save more and spend less.

You Now Have 2 Savings Accounts, But One of Them Doesn’t Have Any Fees

Just because you now have a piggy bank doesn’t mean that you should stop putting money in your savings account, heavens no! You can still put the normal amount that you would every pay day, but this time, instead of spending the rest of the money you didn’t put into an account, you’d be putting away your spare change. The beauty of piggy banks is that, unlike banks, there are no maintaining balances or maintenance fees. Sure, there won’t be any interest but if you check your bank statements, there’s a very big possibility that you’re losing more on maintenance fees than you earn on interest per year.

You Get to Teach Your Kids About Money In a Fun Way

The way great parents teach their kids about anything is by making “lessons” as fun and interactive as possible. There was the $5 skip toy that I wanted desperately when I was 12, and my father told me that if I could save up enough for it in three weeks, we would go buy it from the store. I was able to save around $1.50 every week for the next three weeks, and when the time came to count how much was in my piggy bank, I realised that I was 50 cents short. My father smiled at me and gave me the 50 cents as a reward for saving (kind of like how banks and investment accounts would when you put your money there). Time passed, and I was able to save more and more, get better toys and whatnot, until saving just came natural to me. The point of the story is that, apart from teaching yourself how to become better with money, you can impart all those values and lessons to others. Imaging how much easier life would be if you and your partner both know how to save and handle finances, or how much easier it would be to go out with your mates if you all knew not to spend all of your money on one wild night.

Leeway For Emergencies

When life’s little surprises come along, most people would turn to their savings account to deal with them. Since you have a “second savings account” in the form of a piggy bank, you don’t need to touch the money in your savings, or, at the very least, you don’t need to take as much from your savings account to pay for unexpected expenses.   Remember that no matter how small the amount you put in every day, it will only grow and grow over time. You can never be too old to start making smarter decisions with your money, and yes, even with “little things” like your spare change at the end of the day. Happy saving and good luck!

Related post

Leave A Comment