When you think of a piggy bank, you might imagine a small child putting coins or naira notes into a toy pig. This is a child’s first “savings” account. But as children become teenagers and then adults, the idea of keeping a piggy bank goes out the window. They look for other ways to grow their money, so they open regular savings accounts, certificate of deposits, money market accounts and other high-yielding savings accounts.
A savings account offers one of the fastest ways to grow your money and reach savings goals sooner. Whether you’re saving up to buy a house or you want to build an emergency cushion, compound interest is your best friend. But just because you’ve discovered a better way to save doesn’t mean you should turn your back on a piggy bank.
No matter how old you are, it’s always a good idea to keep a piggy bank. Here’s why.
1. Organize Loose Change
There’s loose change in our car, purses and even inside jewelry boxes. It gets annoying trying to keep up with this money, but a piggy bank is one of the best ways to keep loose change organized and in one place.
Each day after returning home from work, school or errands, start tossing all of your loose change into a piggy bank. Never underestimate the growth potential. You might not be able to fold change, but it’s still money.
Every kobo adds up. If you ignore loose change or don’t bother to count your change, that can be several naira not being spent. As an experiment, use a piggy bank or a coin jar for an entire year. Every day, put your loose change into this piggy bank. At the end of the year, you might be surprised at how much you’ve saved.
2. Rainy Day Fund
How many times have you been sitting at home and wanted to order food in, but realized you didn’t have enough money for a tip? Keeping a piggy bank provides immediate rainy day funds for situations like this so you don’t have to run to the ATM machine.
3. Set an Example
If you have children and you’re trying to teach them the basics of money management, keeping a personal piggy bank and putting all of your loose change into this piggy bank sets an excellent example for your children.
Most children don’t grasp the importance of saving money. As soon as they receive their allowances or a cash gift, they’re ready to spend the money and have a good time. In their minds, they have a lifetime to think about saving and being responsible with their money. And as a parent, you might agree.
But the reality is, good savings habits don’t happen overnight. If your children get into a habit of saving a percentage of their money at a young age, this habit will follow them through life and they’re more likely to be savvy savers as they become teenagers and young adults. Don’t think it’s enough to buy your children a piggy bank- get a piggy bank for yourself and set a good example.
4. Save Without Trying
Every financial expert preaches the importance of saving money and they encourage everyone to save at least 10 percent of their income. Of course, saving money is much easier said than done. A piggy bank, however, provides a way to save money without even trying.
When you have a personal savings account, you have to make a conscious effort to put money into this account every week or month. You might have good intentions, but life has a way of throwing curve balls. Your plans for saving money might go out the window if you have unexpected bills or a car repair.
Loose change is something we all have to spare. And since you’re not likely to use loose change for bills and unexpected expenses, putting your change into a piggy bank can increase your personal savings with very little effort. Granted, your savings will grow at a slower pace, especially if your loose change only adds up to a couple hundred naira’s a year. But something is better than nothing. At the end of the year, convert loose change and deposit this money into your bank account so you can earn interest.
Did you have a piggy bank as a child? Would you still use it if you had one? Let us know your thoughts.