Piggy bank strategies – making piggy work harder for you

All of us, even those of single-digit age, understand how a piggy bank works. You fill it up with loose change and the odd bill, and when it’s full – wait, what do people do with it then?

Save with SPP took a look around to see what piggy bank strategies are lurking out there on the Interweb.

Let’s start with ETFFIN blog.

The blog sees piggy banks as an ideal place “to keep your spare change. Dropping loose change from your purse, pocket and car cushions into a piggy bank will keep you from knowing how much money you have accumulated until you open up the piggy and count up the change. You can take the saved change to a bank to deposit it into an account or in exchange for bills. This process allows you to make the most of every cent you earn, which can accumulate into saving of $10 from a piggy bank of pennies, up to at least $50 from a (bank) of quarters.”

The blog recommends that you use a different coloured piggy bank for each type of change and bill. “This saving trick will help you be more organized with your money, and can lead to more saving since you can keep better track of the money you have, as well as how much you want to put away rather than spend,” the blog explains.

The blog recommends that you have a savings purpose for each piggy bank – “such as to book a vacation or buy a new item of clothing.” This, the blog continues, “creates incentive to use a piggy bank more, and therefore, creates more opportunity for saving money.”

A final thought from ETFFIN – a piggy bank can hold bills, and not just change. “Even small bills, such as ($5 and $10 bills), will add up quickly if you put them in a piggy bank. A piggy bank full of… $5 and $10 bills can quickly add up to several hundred dollars. After you have filled the piggy bank, empty it, then take the money to a bank to deposit or to get the amount back in more manageable bills,” the blog advises.

The Monzo website advocates a multi-piggy bank approach, with each bank having a specific savings goal.

“Piggy banking involves setting up multiple piggy banks… and splitting your money between each one. You use the money in each piggy bank for a different purpose – like bills, groceries and new clothes,” the site explains. We are instantly reminded of the multiple jar approach popularized by Canadian financial author Gail Vaz-Oxlade (Feb 8: Control spending and debt, and you’ll free up money to save: Gail Vaz-Oxlade | Save with SPP).

The Monzo site suggests – after setting up a budget – that you establish separate piggy banks for these categories: rent or mortgage, bills, groceries, eating out, new clothes, holidays and “savings, investments and debt repayments.”

The site suggests that you overestimate the amounts you’ll need (to stay on the safe side) and that if you don’t want to use cash in physical piggy banks, you can set up separate online accounts for each “piggy” category. No matter how you approach it, the money in each bank can only be used for spending on its designated category.

The Moneystepper site provides a few additional ideas.

“Never empty your piggy bank haphazardly,” the site warns. “If you do, it’ll quickly simply become a nice tidy way to store your money rather than being a money-saving tool.”

Don’t, the site suggests, set a limit on what goes into the bank – say, nothing bigger than a quarter. “All that does is tell your brain that (anything over a quarter) can be spent,” and not saved, the site notes.

Have the goal of doing something specific with your piggy bank once it is full, the article concludes.

“You should be aiming to empty and place your piggy bank amounts into your real bank account on a scheduled basis (I would recommend every six months at most). If not, you will be losing out on too much compound interest,” the site adds.

We used our piggy bank to save all loose change, any scratch ticket winnings, payouts from our dental and vision insurance, and other unexpected amounts. All money saved was contributed to our Saskatchewan Pension Plan accounts! We even used small gift cards to make contributions.

SPP invests everyone’s savings dollars in a low-cost, professionally managed, pooled fund. You can decide how much you want to contribute, and can also transfer in any amount from registered retirement savings plans (non-locked-in) you may have. When it’s time to retire, your income options include the security of a monthly lifetime annuity payment or the more flexible Variable Benefit.

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