Chances are, you have more than a few pennies hanging around the house.
In fact, you might even have a whole jar of them, stashed away somewhere and collecting dust. What are you planning to do with them?
Most likely, not a whole lot.
In this age of everything costing more and more every day, pennies have become so worthless that it’s not even worth the hassle of getting up, going out, and spending them, never mind saving them for a rainy day.
Chances are, your child’s college fund will not be made or broken based on whether or not you invest those 500 pennies (five bucks) you’ve been hoarding since the turn of the century.
Why do they even exist?
President Barack Obama wonders the same thing.
He has come out and said that, if he had his way, he would eliminate the penny, confining President Lincoln’s face exclusively to currencies with actual value.
He has a point.
As it stands, it costs almost twice as much to make a penny then its face value is worth.
Every one of these single-cent bits actually costs 1.83 cents to produce.
This is a slight drop from 2011, when it cost 2.4 cents to make one penny, but still way too much to justify its existence.
The nickel is also a price loser, with each one costing 9.41 cents to produce, but since they’re worth more, the President is more interested in making them cheaper to produce than simply eliminating them.
What can a penny buy?
Pennies used to be worth something — back when the US first started minting them in 1793, they were worth only slightly less than a quarter is worth today — but they’re less than worthless nowadays.
You can buy literally nothing with them, as even the cheapest of cheap candies will run you 35 to 40 cents.
And what’s more, the common solution to the issue (rounding current prices to the nearest 5-cent mark) is incredibly doable, and probably won’t affect consumers much.
Sure, some prices might rise a cent or two — $3.03 or $3.04 becomes $3.05, or instance — but others will fall, such as when $3.02 or $3.01 become $3.00.
Both would balance each other out nicely, meaning neither a dent nor gain in your wallet.
On average, according to a major study, we’d gain one cent for every 40 purchases. Obviously, that’s nothing, but it wouldn’t be ripping us of either, as many have feared.
Does it make economic sense?
Besides, it just makes good economic sense to kill off the penny.
Between that and the currently-expensive nickel, the United States has lost over $573 million since 2006.
And as we all know from our personal financial lives, it makes no sense to pour tons of money into something that has no value behind it.
If your car is 20 years old, busted, broken down, dying, and needs $4000 in repairs simply to get it back on the road, is it worth it to get that car fixed?
Not very likely.
A car like that might be worth, at most, a few hundred dollars, meaning the maintenance costs far more than the car is worth.
This is what the penny is to an economy like America’s — a broken-down car with a repair bill that costs many times more than its Kelley Blue Book value.
Abandoning it, and cheapening the nickel, will save a ton of money, and prove that the country’s leaders know how to save money and spent just as intelligently as her citizens.
Mary Hiers is a personal finance writer who helps people earn more and spend less.