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Smart Saving: Round Up on Purchases to Contribute to Savings

Want to squirrel away some money? Try rounding up! Here’s how to do it.
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Round Up Savings: The Coin Jar for The Modern World

Back in the day, most homes had a change jar. When it got full, you could take it to the bank and get it changed into a surprise amount of money. This money could be quite substantial depending on your aversion to carrying loose change. For this writer in particular, a father’s genuine dislike of carrying around Toonies paid for the bulk of textbooks in university!

The change jar has essentially disappeared in the past few years. With it, so has a standard way for people to enjoy a surprise amount of extra cash. In its stead, however, has come a new type of savings called “round up savings.”

Round up savings is basically what it sounds like: you round up to the nearest dollar and put that away in an account. So, if you spent $23.45 on something, the amount would be rounded up to $24 even and the outstanding 55 cents would be placed in a savings account. It effectively replaces the coin jar with a digital version.

If you prefer, you can be even more extreme in your savings, rounding up to the nearest $10 or $20 amount. While it can make little purchase like a candy bar expensive, you’ll probably start second guessing those smaller purchases as well.

How to Start Round Up Saving

While round up saving is easy, it’s not practical to do on your own. After all, e-transferring yourself cents every time you make a purchase will become counterproductive very quickly. Most people who do it will use an automated service to handle it automatically.

There are several different apps that offer this service in Canada and they essentially operate in the same way. In exchange for taking care of the rounding up, they will charge a small service fee. Some will even let you round up and send the results to a charity or cause of your choice, if you prefer.

Depending on the service, they may have additional financial services and products to help you save money and become more money literate.

Three options are Wealthsimple, KOHO and EQ Bank. Some banks have a round up feature too, and may or may not charge a service fee for the transaction.

Whether you had a change jar in the past or not, round up saving is a simple and effective way to put away small amounts of money for cash later. One of its great benefits is its accessibility: almost everyone can forget amount the cents between purchases. And everyone loves a little bit of money that they didn’t think about saving!

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