The Coin Jar Fallacy

​Scattered coins are the hallmark of my people. The connection between clutter and financial problems may not be automatic, but it's real. My clients always, always find money they didn't realize they had, along with numerous gift cards and expired checks that were never deposited. Clutter comes from postponed decisions and chronic procrastination, and these mental states affect every aspect of life. Not everyone has the kinds of challenges that my people do, but a jar of coins is just as representative of a certain outlook as all those lost checks are.

The first thing about a jar of coins is that it represents a habit of paying for things with cash. Sometimes this means that someone in the household gets tips or gets paid in cash. These unpredictable, stochastic sources of income tend to result in erratic spending and saving patterns. More commonly, a coin jar indicates a pattern of keeping a certain amount of cash in one's wallet and emptying out one's pockets when they start to jingle. There will usually be loose change in the vehicle, too.

What's wrong with paying for cash? Nothing, really. Research indicates that people paying with cash spend less money. People who pay by credit card may spend as much as 30% more than they do during cash transactions. I'm a frugalite by nature, though, and I almost never carry cash. When I pay with a card, it generates a paper trail that makes it very easy to analyze my spending.

Cash withdrawals can be almost impossible to track. Paradoxically, we tend to be the least aware of the things we do the most often. It's the little things that add up, until the drips start to fill the bucket, just like pennies can eventually fill a gallon jug. We usually know how much we pay in rent and car payments down to the last dollar, and we have a pretty good idea about our paychecks. Unfortunately, many of us round up our mental image of our checks and round down on our mental estimate of our spending patterns. This is part of why I'm so suspicious of coin jars.

Some businesses demand cash. The first one I can think of is a notorious donut shop. Nothing is more annoying than paying a $3 ATM fee when all you need is $5. Many people feel naked without at least a certain amount of petty cash on their persons at all times. Men especially. We can't stand the thought that we're going to be inconvenienced or look like a loser at the cash register. We don't realize, though, that what we might think of as impulse buys or unavoidable situations are really part of a lifestyle pattern. We plan our entertainment and our meal breaks around certain activities instead of others. This thing that I'm doing is a thing that I do.

I often leave the house without my wallet, specifically so I know that I can't spend money on impulse. When I go to the library, I pack a sandwich. Shocking, I know. My obsession is international travel, and I know just how far even $10 can go when I'm on a trip in a strange city. If I fritter away tiny amounts of money on a regular basis, it won't be there when it's time to pack my suitcase. There is no way that a $1 donut at home is going to thrill me as much as that same dollar spent on something exotic, somewhere exotic. I always see dollars in an imaginary, overlapping chain that extends through time. It's not a dollar, it's three hundred and sixty-five dollars, holding hands from January First through December Thirty-First. George Washington whispering in George Washington's ear.

A coin jar looks and feels like saving money. Surrounding ourselves with metal coinage feels like prosperity. I know because I pick up pennies in the street and save them in my Fairy Jar. After doing this for ten years, there are over fifty-five dollars in there! Coins do add up. My coins, however, come from the sky. They fell on the ground and waited for me to find them. I'm not generating change from vending machines or gas stations or convenience stores, because I don't shop at those places. I go to the grocery store once or twice a week, and if I'm going to eat something, I buy it there. (Or grow it in my yard). The two reasons for this are wanting to save for vacation and wanting to continue to fit in my existing pants. Maintaining one clothing size is just as frugal as using a shopping list and following a budget.

An incredibly dull and frustrating exercise on focus, attention, and awareness is to track every penny you spend for a week. Ideally three weeks. Ideally forever. The more you switch to paying for things on consolidated, planned shopping trips and transactions with digital records, the more you can examine your spending patterns. It's all a question of personal values, of what matters to you. It is worth asking, though, whether your hard-earned money is really going exactly where you want it. Are you thinking about your heart's desire and figuring out how to pay for it? Is your coin jar the residue of intentional living, a gradually accumulated treasure chest? Or is it more like a bucket, bailing out a leaky rowboat? Is there enough in there to start a savings account or maybe solve a cash-based problem? Is my life jar as full as this physical jar?

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