Today’s Ask the Readers post comes from Andy, a recent college graduate who managed to pay off student loans before graduating in May. Here’s his question excerpted from our email exchange:
I’ve already established a Roth IRA this summer and am now looking into some other things for passive income generation. One thing that keeps popping up in my head is my “piggy bank.” Although it is actually in the shape of a giant Coca-Cola bottle, it was something I got for a birthday when I was a toddler, and throughout my childhood I would put any spare change into it. At some point I got smart and took out all of the quarters, so it’s just pennies, nickels, and dimes.
When I started driving and finding use of change (the dreaded $5.08 or similar “hate to break a dollar for that” tab at Taco Bell!), my deposit rate decreased rapidly. And through college, I somewhat forgot about it since I was away. Now I’m home, on the verge of moving to a new state for graduate school, and I’m remembering how I always wanted to do something grand with my saved up change. I do not have an official count, but the last time I counted it was around $130 and that was probably prior to getting a car and a job (because without either, what else does a kid have to do but count his life-size Coke-bottle full of change?). My estimation is it is probably nearer to $170 now.
So my question for you is do you have any ideas that could be an adventurous way to spend my savings, something that would be a cool story to tell my kids one day, so something other than “Yeah, I put the money into my first couch” or “I used it for my first month’s rent.” I am open to investing it, though it isn’t a huge sum of money. I’ve been sitting on this money for 20 years, so I’m also not opposed to letting it sit somewhere (earning interest or some kind of dividend, though) for long-term. That might make the story even more interesting for my future kids if it turned into a larger quantity than anticipated.
Andy, first of all, congratulations on your recent debt-free graduation! Paying off student loans is a tall order, and doing it before graduating is practically unheard of–way to go!
Your question of what to do with the Coca Cola bottle full of change is certainly an interesting one. In some ways, it would be easier to answer your question had you asked me how to spend/invest $1,000. I realize it is only $170, but that $170 represents a lot of childhood dreams rattling around in a big bottle. What would your seven-year old self tell the current you to do with the money?
I’ll brainstorm a few ideas here, and then I’ll turn it over to Frugal Dad readers and ask for their input. They’re a creative bunch, and will no doubt provide some inspiration.
Ideas for Andy: Spending $170 from a Lifetime Collection of Change
- Open a brokerage account and buy 3 shares of The Coca-Cola Company stock (KO). This one occurred to me as you described the change saved in a “life-size Coca-Cola bottle.” KO recently closed at $52.40, which should allow you to buy three shares plus a commission. KO’s yield hovers around 3.3%, which means your investment will pay dividends for years to come, and if reinvested, could one day grow to a handsome sum. (Full disclosure – I own KO stock and have a mild addiction to their soft drinks)
- Buy a cheap round-trip plane ticket to a city you’d like to visit. For $170, you can often find a cheap flight special at a travel site like Orbitz (here’s a link to their flights for less than $200). If you live close to a departing city, consider a short drive and fly somewhere you’ve always wanted to visit. Now that would be a cool story to the kids one day!
- Open a Smarty Pig savings account. Smarty Pig is now offering one of the highest interest rates around, 2.15% APY at the time of this writing.
- Invest in yourself. With $170, you could probably hire a personal trainer for a few sessions, get your teeth whitened, get a new haircut to boost your confidence, or buy a new coat and tie for a future interview session. Now, I don’t know you personally, so I don’t know if any of these apply, but you get the idea.
- Give it away. You could very easily find a local shelter to donate money, food, blankets, or any combination of items. I also like what Secret Santa used to do – make giving even more personal. Call your church or local family services office and ask if they know of a family you could “sponsor” with a week of groceries, gas in their tank and a little extra spending money. If you prefer to wait until the holidays, your $170 could go a long way towards giving a family in need a nice Christmas.
Whatever you decide to do, my best advice is to make it as personal and memorable as possible. After you finish graduate school and start your career, you will have many more “$170 opportunities,” but I guarantee you none will be as memorable as this one. Make it count, and best of luck with graduate studies.
Frugal Dad readers, what other ideas to you have for Andy?