13 years of saving change nets ... a brand new car!

A Frankport, Indiana man spent 13 years saving spare change and has finally cashed it in, using approximately $25 thousand in savings to acquire a 2008 Dodge Ram. He had done the same thing in 1994, when he used rolled change to purchase a Dodge pickup and a Neon for his wife.

While Paul Brant should certainly be commended for paying cash instead of taking a high interest car loan as so many less savvy consumers do, he made a big mistake. By letting his change sit in old coffee cans for more than a decade, he gave up the opportunity to earn a lot of interest.

While this is an extreme example, it's a good example of a mistake that lot of people make. Frugality and saving is important but, if you're going to do the hard part, you might as well do the easy part: Earning decent interest on it.

I know a lot of people who are thrifty pennypinchers -- but keep their money in a savings account at their local bank. If your bank is Bank of America, you are earning 0.25%. I'm a little bit of a freak, but I actually shake with rage when I think about how many people are giving away money by keeping it at their local bank.

Use BankRate.com to find an FDIC-insured online account that pays a high interest rate. Flagstar Bank pays 5% -- That's 20 times better than Bank of America!

I know: This might seem like a waste of time if you only have a hundred dollars. But good habits are best established early, and watching your tiny nest egg earn 5% interest will inspire you to add to it in a way that keeping it in the garage won't.

Photo from Flickr: http://www.flickr.com/photo_zoom.gne?id=2054988302&size=s

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