Even spare change adds up

Financial aid expert Mark Kantrowitz has earned laudable trust in the education space for his willingness to share great advice for free. And with the posting of his latest piece, “Top 10 tips to growing your 529 plan funds faster,” I decided to put one piece of that advice to the hypothetical test.

8. Save the spare change. Every day, dump your spare change in a jar or jug. Every so often, contribute the contents of the change jar to your 529 plans. You’ll be surprised how quickly pennies, nickels, dimes and quarters add up.

SpareChangeHere’s the change jar that’s occupied the same spot in my house since my wife and I moved in five years ago. It’s taken that long to get even this full, mostly due to the advent of debit-cards-accepted-everywhere.

Today, I decided to count the contents. Total amount? $26.33—91 quarters, 45 nickels, and 133 pennies (plus a few Canadian coins and three tokens from a local car wash that did not figure into my calculation).

If we continued to accumulate spare change at the same rate, we’d have about $79  by the time my now 3-year-old starts college. But based on this college savings calculator, if we put that current amount into a 529 plan along with all future spare change as it arrived, we’d have approximately $179 saved for college. 100 extra dollars, just by ditching the glass and investing our (spare change) cash.

Now, I realize that $179 isn’t much when crashed against the expected cost of college in 15 years. But that figure is based on saving about 44 cents a month. Imagine how much you could save just setting aside $100 or $20 or even $5 from each paycheck.

Even spare change adds up. And it adds up even faster when invested with compound interest.