This Couple Proves You Can Reach Your Financial Goals, $5 at a Time

Two US five dollar banknotes in a back pocket.
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In December 2017, my husband walked into our living room and made this declaration:

“We should save all our $5 bills for an entire year.”

I was shocked to hear these words come out of his mouth. Usually, I’m the one who conjures up wacky ideas for saving money, and he’s the one who rolls his eyes and grunts.

But he was excited, and he’s never excited about money. So I replied, “Let’s do it!”

The Strategy

We agreed to save all our $5 bills for 12 months. Since he came to me with the proposal at the end of December, we made it easy on ourselves and started on January 1,, 2018. On New Year’s Day 2019, we will count the money and see how much we have saved.

Every time we receive change in the form of a five, we put that bill in an envelope. The only reason we ever touch this envelope is to put in another five.

Here’s the thing. I wasn’t jazzed about this idea. I mean, come on, who uses cash anymore? This isn’t the 90s! We have debit cards, credit cards, Venmo… What will be next, my husband asking me to write a paper check?

I figured we would save around $20 per month.

But here’s what happened instead: We saved $220 in the first three months — just by stowing away our $5 bills.

Broken down monthly, we saved $90 in January, $60 in February and $70 in March. I guess we use cash more often than I thought!

How Did We Save Money?

A five dollar bill with wings on a chalkboard.
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Now that I think about it, it actually makes sense that we use paper money occasionally.

In January, we paid for things using cash gifts we received from relatives for the winter holidays. My husband’s birthday is in March, and his parents gave him some money to celebrate.

Also, because I used to live in China and am currently a freelance writer, one of my clients is a Chinese company. I kept my Chinese bank account open when I moved back to America, and they pay into this account when they compensate me for pieces. Then I withdraw the money in American currency. (I realize this may sound weird and even illegal, but it’s not. I pay U.S. taxes on those earnings.)

As a result, we found ourselves making purchases with $20 bills. A lot. And receiving $5 bills back as change. A lot.

For those of you reading this and trying to decide if you want to try the $5 bill strategy, maybe you’re thinking, “This is stupid. Okay, maybe this lady uses cash a lot, but she’s not the norm. This would never work for me.”

I thought the same thing.

So I encourage you to give it a try. Sure, my payment situation from this Chinese client is definitely unusual, but many of us have unique situations. Maybe you fall into one of these categories:

  • You hold a job that provides you with cash tips, such as server, bartender or delivery person.
  • Loved ones give you cash as gifts on holidays.
  • Friends pay you back with bills instead of payment apps when you cover the cost of their drinks or dinner.
  • You prefer to pay with cash instead of a card so you can more immediately track your spending.

If any of those scenarios sound familiar, you could save money almost without noticing.

I often forget about our envelope full of bills. I don’t miss that $220. And if we keep going at this rate, we could save about $880 this year.

What Could We Do with $880?

Several hundred dollars won’t make us rich, but it could certainly ease our financial load. Here are some ideas for how we could spend $880.

Pay Off Student Loans

My husband owes quite a bit of money in student loans. Thankfully, because he’s in graduate school, he doesn’t have to start making payments until summer 2019.

But even though he doesn’t have to make those payments, interest is still accruing on his undergraduate loans. One loan has an interest rate of 6.8%, which is too high for my liking.

It would be a huge relief to pay off a chunk of that evil loan early.

Put Money in Savings

Ideally, the money in our savings account will go toward buying a home. We would like to buy a house by the year 2020. An extra $880 in savings would definitely boost our confidence and build momentum toward achieving this goal.

Contribute to Our Retirement Accounts

We contribute a little money to our IRAs monthly, but not as much as we would like. It would be awesome to be able to put $293 into each of our individual accounts, and the remaining $293 into our joint IRA account.

Who knows, maybe we will spread out this extra money among various areas. All that matters right now is that we aren’t missing those $5 bills. But on January 1, 2019, we’ll definitely feel the difference those bills will make in our lives.

How about you? Are you willing to save bills for a year? How about just six or three months, or even one month? See what an impact it can make.

Laura Grace Tarpley is a nomad and freelance writer who runs the blog Let’s Go Tarpley!, where she shares tips about budget travel and moving abroad. Follow her on Twitter @lgtarpley.