The Simeone Change Theory
Last week, I was lamenting to a co-worker that I didn’t have any quarters in my car for the meters in Boston. This was particularly ironic because a few days earlier I noted that my change jar at home was almost entirely filled. Of course, I didn’t remember to bring any change with me that day.
I’ve always had a fascination with change and coins. I remember collecting change as a kid, rolling it up in paper coin holders, and bringing it to the bank. I think that was probably around the time when I realized that I really enjoyed making (and saving) money. Later in life, I got a machine that rolled up coins automatically. Pretty neat. A few years ago, I discovered the Coin Star machines in the local supermarkets. What a brilliant business model. I’ve been a fan (and customer) of Coin Star ever since.
Back in college, my roommate (John Simeone) introduced me to the best way use your leftover coins. He explained to me that you should try to use your change on a daily basis rather than collect it in a jar at home. John pointed out that keeping change in a jar was poor money management — it was like putting it into a bank that didn’t pay out any interest. He believes that the best policy for your change is to use it everyday rather than collect it. So how do you efficiently use your change on a daily basis?
Allow me to introduce you to the “Simeone Change Theory.” It goes like this:
“The best way to use of all your change (including quarters), is to carry 54 cents with you on a daily basis, in the form of one quarter, two dimes, one nickel, and four pennies. Having this change on you will allow you to get rid of excess change while not carrying a bunch of coins on you or holding up lines while searching for the correct amount. With 54 cents, you can obviously “round off” any transaction 54 cents or less. This is almost like saving $1 on a cash purchase since the change you get might otherwise be lost or allowed to accumulate. On purchases where the cents exceeds 54 cents, you can use pennies (or larger combos if you’re feeling ambitious) to reduce the amount of change you get or control the denominations. For example, if your total bill is $5.78, you give the cashier $6.03 to get back one quarter instead of two dimes and two pennies. You’ve also rid yourself of three pennies. On a transaction of $6.56, you could give the cashier $7.06. You’re trading a nickel and a penny for two quarters instead of 44 cents (one quarter, one dime, one nickel, and four pennies). You get the idea. Note that the whole thing blows up if you need quarters for laundry. In that case, I’d carry 59 cents (five dimes, one nickel, and four pennies).”
There you have it. If you do this everyday, you’ll be saving almost $1 a day. Now that’s what I call an economic stimulus plan.
