The Motley Fool: The Fribble, Amassing Loose Change, by Vince Bourgault

Monday, June 08, 1998

Amassing Loose Change
By Vince Bourgault ([email protected])

In the June 3 Fribble, a solution for the monumental problem of loose change was proposed. The author explained how his answer came to him in a flash of blinding insight while filling his car with gas. He would use the change (either some or all of it) to buy extra gas. I offer another solution: amassing it instead of gassing it. Don’t get me wrong, I like the gassing solution. It's just that it won’t work for me. Why? Because I do not pay for my gas with cash. I use my Visa credit card.

Years ago, each gas station would only take their own credit cards. Today, however, they take all the biggies (Visa, MasterCard, American Express, Discover, etc.) in addition to their own issued cards. With modern technology, many places now allow you to use those credit cards right at the pump. You can now get gas at almost any hour, whether the station is open and/or an attendant is on duty or not. Paying at the pump can actually even save you money for it prevents you from having to set foot inside the mini-mart that all gas stations have nowadays. If you don’t enter the building, you won’t feel compelled to buy something that you don’t really need. Unfortunately, it won’t help you if you have to enter the building to use the restroom.

I prefer to using my credit card for buying gas for a number of reasons. For one, I have an affinity credit card through Waldenbooks which earns me points for every purchase I make. After so many points, I get a gift certificate for Waldenbooks. Since my wife and I like to read, this works out great. I must have gotten hundreds of dollars' worth of books for free by now (including some of the Motley Fool books). There are many affinity credit cards (Ford, GM, airlines, etc.) that many people are using in just this fashion. Secondly, paying by credit card also allows me to keep track of my monthly gas expenditures. And third, it allows me the freedom of not having to carry too much cash. I can see how this strategy might also get people in debt. But I have a strict credit card budget that I am disciplined enough to stick to and I pay off the balance in full every month. So it works for me.

But now back to the problem at hand. Despite using my credit card when and where I can and minimizing the cash I carry, I still end up with loose change. What do I do with it? I save it! I have a large container next to my dresser that I stash the change in. The container doesn’t have to be any fancy store-bought piggy bank or anything like that. An empty plastic milk jug or 2-liter pop bottle will do.

Every evening when I get undressed and I empty my pockets, I put the loose change into the container. Sometimes, I may have to dip into the container to get some change, but for the most part, I just let it accumulate. It amazes me just how quickly the container fills up. When the container gets full, I haul it down to the bank and have them count it using their change counters. Then it’s up to me to decide what to do with the money. The choices are endless. I can spend it immediately, I can put it in my savings or checking accounts, I can invest it, etc. The usual option for me is to invest it. I tuck it away into my IRA.

My use of this loose change can be thought of as delayed gratification taken to the maximum. First, it takes me a while to fill the container. In the meantime, the money is just sitting there accumulating, but not gaining in value; nor is it being spent. Then, after I cash it in, the money usually goes into my IRA for possible use sometime in the distant future. Who knows, I may never touch the money in my IRA and I could end up passing it on to my kids or grandkids. And they may never touch it either so it will just continue to accumulate. I will have then successfully turned one of scourges of civilization into a pot of gold. How Foolish!