Lessons from that Old Coffee Can over the Kitchen Sink

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Day 25: Hiding from Catzilla by Brymo on Flickr!I have this strange little memory from when I was about six years old…

I was sitting at the counter at my grandma’s house when I noticed she had taken a few dollars out of her purse. She reached up into the cabinet above the sink, pulled down an old coffee can, and threw the dollar bills in there. When I stretched up to peek inside, it was pretty obvious that the old tin was full of cash – dollar bills, fives, tens, and more.

That old tin can over the sink functioned as her savings account. It’s where she kept extra money. Whenever she had a few extra dollars, she’d toss them into that can, and when she needed some cash in a pinch, she knew right where to go.

It’s kind of funny to see the same kind of logic repeated again with my father. Instead of just keeping a can full of dollar bills, though, he would save up bits of cash until he could get a single large bill, then fold it into fourths and hide it somewhere deep inside his billfold. Then, when some sort of emergency happened, he’d pull out his billfold and clean it out, often coming up with hundreds of dollars in cash in the process.

When I was younger, I adopted much the same habit. Instead of adopting a steady plan of saving money, my “emergency fund” largely consisted of a few $50 and $100 bills squirreled away in my wallet somewhere.

These tales are obviously all interrelated – and they point towards a few obvious truths worth mentioning.

First, many of our personal finance ideas and habits are inherited from our guardians. I watched my father learn his habit of hiding away money from his parents, and I now see how I adopted this same exact idea from my father, too.

We learn so much from our parents: how to walk, how to speak, how to eat politely at the table. It’s not surprising that we learn and imitate more minor behaviors like our money management choices, either.

Of course, not all lessons are necessarily good ones. It can undoubtedly be useful to have a bit of cash on hand in your home, but to use a coffee can stowed away in your cupboard as your primary savings account? That not only ensures you won’t be earning any interest on the money, but it puts that cash at risk of being stolen or being destroyed in a fire.

The best course is to look realistically at our own habits and separate the good from the bad. In this case, the idea of saving your spare dollars is a good one – they build up over time, eventually becoming a nice, sturdy emergency fund or a down payment.

The bad part is the risk – there are far better options for the money. Even a savings account at your local brick-and-mortar bank is a better choice than the coffee can under the sink. An online savings account is even better (I use ING Direct, but there are many great online banks) – you can earn a much higher return without the brick-and-mortor overhead. Build up sufficient money and you can buy some CDs, begin investing in stocks, or put it away for retirement.

My grandma had her heart in the right place when she put away dollars in that tin can. I hope I can continue that same strategy – just with some updated tactics.

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39 thoughts on “Lessons from that Old Coffee Can over the Kitchen Sink

  1. When I was younger I did the same thing (hiding money in my wallet in case of an emergency).

    I don’t know what kind of an emergency needs $40, but I was ready!

  2. I’m definitely one of those people that hides money away in a bunch of places in case of emergencies. I wonder if its effective sometimes because if you forget about it, you’re just losing money. It might be effective to move some of your hidden stash into your checking account at the end of the month a little at a time. That way, you still have some emergency cash and you’d be saving at the same time.

  3. I’m not attacking the post just the idea of hoarding money in a can. When is there ever a time when you instantly need cash? If you can’t get to an ATM there may be bigger problems.

  4. I use a similar system as a way to hold my change from my pockets. In this case, it’s an empty raisin container, and it’s full of change. It’s really more of an organzational tool (a place to put my change and small bills) than a savings device, but there’s probably $40 in there at any given time. And I always know where to go if I need some quick cash without going to the ATM.

    The other useful thing that I use a can for (actually, an empty blue flowerpot) is as a receptacle to hold my receipts. I keep it next to my computer and empty my wallet of all receipts every few days. Whenever I have my Excel budget out, I enter the receipts in the pot into my transactions list and I have my spreadsheet programmed to tally them and plug them into my monthly budget. since I make a receipt for every transaction I do, even the cash ones or the online payments (I just write the info on a slip of paper and put it in the pot), my budget stays up to date and I have a complete list of every transaction I have made in the year, all in one workbook.

  5. I keep a couple hundred bucks in tens in my safe at home. Why, when I could run out to the ATM across the street anytime? For the day that something “unthinkable” happens and the power is out, etc… I’ll have some small bills to barter with. This is what I would call my “true” emergency fund. For something that I have no idea what it is or when it’ll happen. My bank emergency fund is for when my car dies or the water heater explodes. The cash is for when the horrible earthquake splits my building in two and I need to buy a hundred-fifty dollar shovel from my neighbor to dig my family out of the rubble.

    It’s quite similar to the bottled water I have stashed away with sardines and crackers and whatnot. And the extra tank of propane for my grill. The “real” emergency fund. Not to be touched for “white collar” emergencies.

  6. Undoubtedly a bad idea to squirrel your money around the house in so many odd containers; however, the visceral lesson that your grandmother imparted to you might be a bit harder to pass along to your son by your method: moving around numbers on your ING bank account screen certainly doesn’t have the same immediacy of impact as dropping dollars into a coffee can.

  7. As a parent with two children under 5, physically saving money, whether it be a piggy bank, safe, or tin can, is one of the best lessons we can teach our kids.

    Little ones don’t understand the detachment of online savings accounts and even the local bank savings account is conceptually opaque.

    However, pulling out 10 one dollar bills and putting one or two of them in a piggy bank and explaining to a three, four, or five year old that you are saving for somthing in the future is both important and very effective.

    Then, when they get older they can learn the interest bearing concepts you deftly espouse.

  8. My husband always keeps an emergency $50 in his wallet. He also has a $20 Travelers Check in there. You never know when your car will break down, flat tire or whatever and not have enough cash on hand.

    I know of many people that that stash cash around the house. After my friend’s father died, she found hundreds of dollars in tens and twentys thoughout his jacket and shirt pockets in the closet.

  9. @ steve:
    what good ideas, jotting down your own receipts for times when you don’t get one. Thanks for that idea.

    I use ING Direct, but I think having cash on hand is also beneficial since it can take a few days to transfer cash from ING into my local bank account. I suppose I could bank with ING too, but I prefer my local credit union.

  10. Bill – the big examples for me were living in NYC on sept 11 and during the big blackout – for water, radios, etc. I was very happy to have cash on hand both of those days, and still keep some (wll hidden!) in my office. Other ways I’ve used emergency cash have been sudden need for locksmiths and plumbers (when I didn;t want to leave the the tradesmen in the house) and unexpected taxi rides when being way behind schedule meant I really didn’t want to stop at the ATM.

  11. This reminds me of the semi-apocryphal tale (I’ve heard it at least 3 times by people claiming it’s theirs) of the woman who cuts the ends off of a roast whenever she cooks it.

    Wondering why she’s wasting all this good meat, she calls up her mother and asks, “Mom, why do we cut the ends off the roast?” “I don’t know,” the mother replies, “Let’s call your grandmother.

    “Grandma,” asks the woman, “why do we cut the ends off the roast?” “I don’t know why *yoU* do it,” the grandmother replies, “But I did it because my pan was too small!”

  12. Troy, we do that with our kids…they have a bank with a church section, a store section, and a bank section. When their bank section gets sort of full, we take it out and I put it into their ING accounts. They each have their own, and I show them each month how much interest their money is earning.

    I like this combo…it’s still mostly visual(they see the money go into the plastic bank), but they are also getting to watch their money grow.

  13. I keep on hand a hundred in ones, a hundred in fives, a hundred in tens, and two hundred in twenties. For hurricanes, etc.

  14. ING dropped their rate to 2.75%. I’m thinking of switching to Dollar Savings Direct which offers 4.0%. Anyone had experience with them? Any thoughts?

  15. It’s amazing what habits we hold onto, Trent. I keep about $35 in both my workout backpack and my mountain bike bag, just in case I forget my wallet. It’s helped out a couple of times when I was hungry. I keep a bunch of quarters in my truck ashtray for meters and a bunch of pennies for sales tax.

  16. I have a “found money” envelope for any stray dollars at the end of the week. Usually the contents end up paying for haircuts, but I also use it as a place to squirrel away money for things I want but can’t justify in my regular budget.

  17. I try to always have a little actual cash squirreled away around the house, in my wallet, at work, and in my vehicle. All total, $200. My theory is that I may never need any of it, but if I do, it will be well worth it.

  18. A little trick that I do is I have a coin jar in my room under my desk. Whenever I am out of the house and about to spend pocket change on a coffee or something I do not need I stop and put the change back in my pocket. Also if I have any loose change left over at the end of the day, I put it into the coin jar. It usually adds up to at least $50 a month which I turn put into my vacation savings..

  19. Times when you need cash and an ATM won’t cut it:

    1) Power & phone outages during a storm that leave you stranded at the office for an unexpected length of time.

    2) Traveling cross country and the ATM swallows your card during a gas stop on the western border of Nebraska.

    3) Buying and selling “stuff” for profit. Individuals are reluctant to take your check and no one can cope with plastic.

    4) ATM machines might have a limit on how much cash you can withdraw when you unexpectedly need to get a room for the night.

  20. I took my 2 year old out to a crafts store, we bough a giant porcelain pig that we painted together… We have a lot of fun with it, saving and celebrating putting money in it. I think it is a good start. Recently we were in a cash flow pinch, on principle I refused to take money out of investments for day to day expense… I cashed all the change in the house (except the pig!) and the 128 bucks got us through to payday. Not the smartest way to do it, but at some level it works…

  21. I agree that you should keep a couple hundred dollars in the house in various denominations. I don’t have a cheque book, so I’ve found my stash quite useful on several occasions – paying a tow truck driver when the car broke down in the driveway, paying various tradesmen for small jobs around home, and even having cash for the offering when I’m visiting a different church than usual.

  22. I just purchased $1000 in presidential dollar coins from the mint (free shipping). I plan to give half to a sister that got laid off today in a piggy bank that I got from Microplace, for making loans to them. I figure mine will stay in a piggy bank in my house and not burn in a fire. One can always have ready cash. I will later build up my stash of bills to use in an emergency. I know, I know, the interest will be lost.
    BTW, my grandmother kept coins and cash in a sugar bowl in her cupbord. She would only keep so much cash in checking and then buy CDs with the rest.

  23. Each automobile has $50 stashed in it, just in case. We keep several hundred stashed away in cash around the house, just in case. These stashes aren’t our life savings but in case of emergency when credit cards or access to cash is not readily available. You never know when or why you’ll need a handful of cash but it’s great to know it’s there.

    Keeping some cash around for emergencies is not the same as an emergency fund or savings account. One covers immediate emergencies, the other wards off disaster. Each has a unique function and neither is like hoarding money in the mattress in lieu of an interest bearing savings account.

  24. My grandmother was born in 1925. I don’t know if she has coffee can full of money, it is not so relevant to me. Anybody else catch Sarah Silverman last night?

    In my opinion, every American should have around $5,000.00 in cold hard cash (American) also probably equivalent amount in Mexican pesos and also Chinese Yuan or Indian Rupees, in case the shit really hits the fan, not too likely, but you can drive to Mexico and then fly to anywhere on the planet where things are not so fucked up. IMHO …

  25. I have the opposite problem. I have this aversion to having cash in my wallet or in my house or car. I pay for everything using my Discover card (which gets paid off at the end of every month via electronic transfer from my checking account). I figure if I’m gonna buy groceries, gas, etc anyway, I might as well let Discover pay me 1% for using their card to do it. And I keep my Visa around for the places that don’t take Discover. If someone steals my credit card, I can call the bank and I’m not liable for the charges. If someone steals my cash, well, that’s it!

    I rarely have more than $100 in the house, probably because when I was a kid I used to put all my cash in my wallet which I hid behind a stuffed animal on this little shelf above the window that I had to stand up on the couch to reach. I always joked that if we had an earthquake then I’d have the wallet fall down on my head and I’d find out how rich I was. One day my dad saw me adding to my cash stash and told me if I had more than $100 in that wallet, I should go put it in the bank (I had a savings account already by the time I’d saved up this much money).

    But considering that they’re predicting a 7.0+ quake on a faut line less than a mile from my house, maybe I should start stashing more cash in the house… We lost power for less than a day when the last big quake hit here in ’89, but that quake was not in our backyard…

  26. Wow — so many excellent reasons for keeping cash on hand. On 9/11, the first thing I did (after watching the attacks in horror) was withdraw the limit from my bank account. Next was to fill up the gas tank, do all my laundry, and shop for two weeks’ worth of food — all before we knew that electronic banking was still safe, the power would not go out, and the supplies of food and gas would not be interrupted. Foresight, foresight.

    Lurker Carl #20 says it best: cash for emergencies is not the same as an emergency fund.

  27. @Jade,

    I recently closed my Discover Account because when I opened it, the promise 5% cashback in big bold letters but when I saw the statement, it was more like 0.2%. When I called them, they said the 5% applies only after you first touch $2500 in expenses on the card.

    I’ve got much better experiences with Citi’s Dividend Platinum card and the Chase Freedom Visa.

  28. @ Bill

    My car was getting towed [the guy had it up on the trailer already] and he said if I gave him $60 right there, he’d let it back down. I don’t carry ANY cash on me because I always figure I can go to the ATM. Luckily – my boyfriend always keeps cash up in his room and he ran up and grabbed the money. Saved me $90 from what I would had to have paid should he have taken my car.

  29. LOL!

    I have a big fat wad of cash sitting in a wine glass in my liquor cabinet!

    Silly but I had all these big bills from my mom who was paying me back for something – and I have this big expense coming up and wanted to save it to pay in cash [I'm loathe to let go of cash for some reason so it's not tempting]

    What will my kids do LOL?

  30. @Jade and Chetan, Join Pentagon Federal Credit union via NMFA (anyone can) and use their Visa card. It returns 5% back for Gas, 2% back for groceries and 1.25% back for all other things. I receive about $400 cashback each year.

  31. Another good card is the Costco Amex – 3% gas, travel, & Costco, 2% on restaurants, & 1% on everything else… I also have the discover 5% on gas (but only up to first $100 a month, sneaky!) & 1% on everything else. When I got the discover there was no $2500 stipulation…Between the two cards and carrying no balance I am getting paid about $400 tax free dollars a year for nothing. *only a good plan if you ABSOLUTELY can and will pay your balance off on time every month.

  32. Frugal Bachelor said:

    In my opinion, every American should have around $5,000.00 in cold hard cash (American) also probably equivalent amount in Mexican pesos and also Chinese Yuan or Indian Rupees, in case the shit really hits the fan, not too likely, but you can drive to Mexico and then fly to anywhere on the planet where things are not so fucked up. IMHO …

    Even poor Americans should have $5,000?

  33. I keep a twenty in my car, in case I need cash and don’t have any or if my wallet were to ever get lost/stolen. I’ve only used it twice that I can remember, but both times it was well worth it.

    I’ve never thought to keep money in the house for emergencies (the mid-atlantic doesn’t have many natural disasters) but there are a lot good points above. I think I’m going to put $400 in my fire-safe box this weekend. I feel like $400 would be enough for me to get to a relative or friend’s house out of harm’s way if there was an emergency. But I guess it depends on how big an emergency…

  34. It’s weird how history effects our lives. My grandfather was probably around the same age as your grandmother, living though the depression. He always had coins and bills stuffed places, because he lived in a time when a savings account wasn’t safe and his parents cashed their check every week, payed their bills to the deliveryman in cash and put the rest in a cigar box. It took my mother a long time to get out of the cash hoarding habit, though I do agree having a little on hand is good for emergencies. During my two months in India, major monsoons knocked out the ATMs by disrupting the phone lines. It could happen anywhere.

  35. I struggle to for all time have a little definite money squirreled away around the home, in my wallet, at job, and in my car. All totally around $150. My theory is that I might never require any of it, however if I do, it would be best worth for it.

  36. Change jars and a little ornamental box crammed totally full of ones. It’s never worth a trip to the bank the next morning, and if I didn’t put it away like that I’d end up spending it. I usually get about a hundred squeezed out by accident every month this way.

  37. I’m in the same boat as Jade – use a CC for everything and hate carrying cash. But maybe I should rethink keeping some in the house – “just in case”. Wish I had one of those cool wall safes behind some art in my house to keep it in!

  38. guinness416 said it for me. Many ATMs ran out of cash on 9/11. We get smaller blackouts on occasion. I always keep some extra on me for taxis and such and a few hundred hidden at home. We get hurricanes and tornadoes here too.

  39. Yes most of our savings habits come from our parents and if we idolizes that parent then there is nothing to deemed wrong. But yes some parents have bad saving habits that we don’t want to adopt and we should be very careful how we take up these ones. It is good that you revisit this article it is a wonderful one.

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