The Change Jar is an adult version of a piggy bank. The concept is to put all your loose change into the change jar and at the end of the month place it into an interest bearing bank account. The change jar money can be used for emergency funds, college tuition, family vacation and anything else that may be desired in the future. 

It is hard to believe that a simple change jar can actually help toward big-ticket items such as college tuition. However, with some effort and the help of compound interest anything is possible. Compound interest is calculated not only on the initial investment but also on the accumulated interest of prior periods. Compound interest calculators are easily found online through most search engines. An example of how compound interest works is this: by depositing $120 a month into an account that earns 7% interest per year you end up with $64,000 in 20 years. That is not a bad drop in the college tuition bucket. 

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How to get money into the change jar: 

The original idea of the change jar is to use cash for purchases and place the change into the jar. However, being creative in ways to get money into the change jar is key to financial growth and security. Here are a few ideas: 
 

Pay the difference to the change jar. For instance, if you manage to reduce the electric bill, put the savings in the change jar. Other ideas for paying the difference to the change jar include: 

• Buying items on sale: subtract the sale price from the regular price and put that in the change jar.
   

• Coupons: when you use a coupon put the savings in the change jar.
   

• Comparative shopping: find a lower price for an item regularly used and put the savings in the change jar. A good tool for comparison-shopping is the Internet. Here is a website that helps comparative pricing shoppers: http://www.shopping.com.

Other ways to add to the change jar: 

• Replace one take-out family meal with a home cooked meal and put the difference in the jar. Change: $20-30 per week, $80-120 a month.
   

• Rent a movie instead of going out and put the difference in the change jar. Change: $15 for a movie for 2.
   

• Bring morning coffee in a thermos instead of buying one on the go: $1.00 per workday, an average of $22 a month..

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Where to empty the change jar? 

If the change jar is the first deposit into savings, the ING Bank (ING Direct) is a good place to start a savings account. They have no fees, no minimum requirements and have competitive interest rates. Find out more information on their savings accounts and CD's which are also fee-free without a minimum balance needed at: http://www.ingdirect.com.  

Another bank that has competitive interest rates on savings accounts is State Farm. They do have a minimum balance requirement to open a no fee account but it is not too high. To find out information on State Farm Bank visit: http://www.statefarm.com.  

These savings accounts are a good place to keep the change jar money while accumulating interest until a balance is achieved that enables one to invest more aggressively, such as through mutual funds, a money market account and others that offer a higher rate of return. These accounts should be researched a head of time to be sure they are right for the investment needs of the individual. 

Frugal fanatic tip:

Cutting cable television is a terrific way to save money. On average a basic package cost around $40, which totals $480 dollars a year. If that $480 a year goes into an interest bearing account at 7% over a 30-year period it turns into $48, 798. That is a pretty sweet retirement gift.