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'Chump change'? Not so fast

Woman tosses away pennies
Sergey Nivens / Shutterstock
Don't waste your loose change, because it can be a valuable tool.

In 2016, around a quarter of respondents ages 18 to 24 said they didn’t use their leftover change for anything. But this year, a whopping 60.3% of the young adults are willing to admit that — which makes the consumers in their late teens and early 20s easily the most wasteful demographic when it comes to coins.

Maybe it’s not so surprising that spare change is losing its cachet, especially among younger Americans. Even before the pandemic, mobile wallets and contactless payment options were increasing in popularity, and the lockdown has sent no-touch transactions soaring.

But our spare change isn't necessarily chump change — in a new Coinstar survey, consumers estimate that they have an average $113 worth of coins in and around their homes. That loose change can be a valuable tool in a world dominated by contactless payments.

How? When you save and invest it for your future, with the help of an automated app.

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Why you should invest your spare change

Farmers' hands are watering trees on top of coins stacked on a blurred natural background and natural light with financial growth ideas.
Arthon.Meekodong / Shutterstock
Investing can turn your pocket change into real money.

MyBankTracker’s 2020 survey found that the majority of people who do use their loose change put it toward short-term goals, like saving for a vacation or paying off bills.

Very few respondents choose to play a long game with their spare change: Only 3% say they put their loose coins into a retirement account, and investing in the stock market didn’t even register in the survey’s responses.

But when you invest your spare change, you give it a chance to grow over time. Instead of just sitting in a jar in your bedroom, your quarters and dimes actively work to make you more money.

People often think that to be successful at investing you need thousands of dollars to play around with. But that thinking is flat-out wrong.

These days, micro-investing tools including the Acorns app allow you to build a balanced stock portfolio pennies at a time. And better yet, it’s all done from your phone, so you never have to lug 10 pounds of rolled-up change to the bank.

How you can invest your spare change

Acorns app logo on a smartphone screen. Manhattan, New York, USA May 2, 2020.
NYC Russ / Shutterstock
Acorns is a popular micro-investing app that helps you invest your spare change.

Apps like Acorns use a "round up" approach to investing — whenever you make an everyday purchase, the app rounds up the transaction to the nearest dollar and drops the change into an investment account.

For example, if you buy a coffee for $3.65, 35 cents will automatically get added to your portfolio via the debit or credit card you’ve connected to the app.

Instead of paying in cash, pocketing the coins and then tossing them in the pile on your dresser, you can pay with a card and invest your spare change without even thinking about it.

Acorns offers five different investment portfolios of varying risk levels, so you can invest with whatever amount of risk you feel most comfortable with.

It’s fully-automated investing, so you won’t have to worry about what to buy, when to sell and so on. Your portfolio will automatically be rebalanced based on changes in the market.

And if you decide you’d like to invest more than just small amounts of money, you can set up recurring daily, weekly or monthly deposits to build your portfolio faster.

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Advantages of micro-investing

Photo of happy young man lies on sofa and looking on phone
Dean Drobot / Shutterstock
Micro-investing apps are inexpensive and easy to use.

Aside from the convenience factor, micro-investing apps have several other advantages over traditional investing options.

First off, they’re incredibly easy to use — you can set up an Acorns account in just a few minutes.

There’s typically a low minimum deposit, so you can start investing with as little as $5.

And, the monthly fees for smaller accounts are dirt cheap: a basic Acorns account starts at $3 a month.

Perks specific to Acorns

In addition to the standard Acorns Invest account, Acorns also offers several other opportunities to put your spare change to work.

Acorns Spend is a combination investment, retirement and checking account. You’ll be able to automatically invest your spare change, and you’ll get a tungsten metal debit card with your signature custom-engraved. All the funds in your Acorns Spend account are FDIC-insured for up to $250,000.

Acorns Later uses the round-up method to deposit your spare change into an IRA, which allows you to save money for your retirement every time you swipe your card. This option is built into Acorns Spend.

Acorns Early lets you invest your spare change for your children’s future by depositing the money into a UTMA/UGMA account for minors. Once the kids reach the age of transfer (usually 18 or 21), the money you’ve been saving can easily be handed over to them.

No matter which Acorns account you use, you’ll be eligible for Acorns’ Found Money, a program that’s similar to cash back and adds a portion of your purchase to your portfolio every time you shop at one of more than 300 leading retailers, including Walmart and Chevron.

You’ll also have access to Acorns Grow, a free resource to help build up your knowledge on all sorts of financial topics through articles, guides and video tutorials.

Disadvantages of micro-investing

American dollars grow from the ground
Nomad_Soul / Shutterstock
Micro-investing may not be the best choice if you want to invest large amounts of money.

While there are many advantages to micro-investing, there are a few potential downsides you'll want to consider.

The monthly fees start at $3, which may seem small. But if you’re investing just $10 from the spare change round-ups each month, the fee will gobble up at least 10% of your contributions.

Another disadvantage is that micro-investing apps aren’t ideal if your goal is to invest lots of money. Although Acorns offers flat fees on its accounts regardless of the balance, some other micro-investing apps like Clink charge higher fees once your account passes $5,000.

For larger amounts, you might be better off going with an investing app like Robinhood, which has no monthly fees on its standard accounts and never charges commissions.

Finally, micro-investing apps typically offer smaller portfolios made up of low-cost exchange-traded funds. That may be fine for beginner investors, but if you’re looking for a more diverse portfolio you might be better off investing on your own.

Should you try micro-investing?

If you’re looking for a hassle-free way to make use of your spare change, micro-investing apps like Acorns are a great call — especially if you’re new to the world of investing.

Your extra money automatically gets deposited into a balanced portfolio whenever you make a purchase, helping you to score future results from all those loose coins you might have otherwise tossed aside.

If you sign up for Acorns using this special link, you’ll get an extra $10 added to your account after you make your first investment.

So stop wasting your change and start investing for your future.


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Shane is a reporter for MoneyWise. He holds a bachelor’s degree in English Language & Literature from Western University and is a graduate of the Algonquin College Scriptwriting program.


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