I can still hear my grandfather saying, "Add those pennies up and you have something my boy." Is anyone saying that today?
This week, my Exit Wealth colleague, Ted Jenkin, takes us through how we're losing money making money and what's next.
There was a time when pinching pennies actually meant something to Americans.
It meant rolling coins at the kitchen table. It meant checking couch cushions before a trip to the grocery store. It meant kids dumping out jars labeled college, vacation, or a rainy day and counting every last cent. Money wasn't abstract. You could feel it, hear it, and save it.
And right by the cash register almost everywhere you went, sat the who give a penny, take a penny dish. It was simple and brilliant. If you were a cent short, no problem. If you had an extra, you could help the next person out. Just a quiet agreement that small things mattered. Maybe we should all be stocking up on these dishes to sell on eBay in the future?
But here's the reality no one likes to talk about in today's personal finance world. The penny and the mindset behind it has all but disappeared.
Where "Pinching Pennies" Came From
The phrase dates back to a time when a penny had real purchasing power. One penny wasn't nothing. Enough of them added up to groceries, gas, or a movie ticket. Saving pennies worked because pennies actually did something.
Today, they mostly sit in cup holders, junk drawers, or forgotten jars that never get emptied. Many people won't even bend down to pick one up on the street. Cashiers sigh when they must count them. Kids don't save them. They ignore them.
The fact is that a penny truly has become a rounding error.
The Math Behind the Madness
Here's where the irony gets uncomfortable. We know the penny got discontinued because it costs the Government more than a penny to make a penny.
Roughly speaking:
- A penny costs close to four cents to produce.
- A nickel costs well over ten cents to make.
- A dime costs around five cents.
- Even a quarter costs more than its face value to mint.
Let that sink in. We are literally losing money making money. At some point, logic has to win. Maybe the nickel won't be far behind. Which raises the obvious question: when pennies disappear, are we still going to be pinching them?
Or do we start saying that we are pinching nickels?
A World Without Loose Change
Look at how most of you already live. You tap your phone to pay. You Venmo a friend for lunch. You split dinner with an app. Parking meters don't want quarters anymore. They want credit cards. Toll booths have gone fully digital. Even vending machines are starting to look at coins like outdated technology.
Physical change used to slow spending down in a good way. You felt the cost and you thought twice before handing it over. Now, spending is frictionless. Swipe. Tap. Done. Maybe that's why people are now at record levels of credit card debt. When spending has no friction, saving quietly disappears. Maybe we were better off pinching pennies and I don't mean copper. I mean our behavior and attitude toward money.
What We Will Lose When Coins Go Away
Pennies taught patience. They taught accumulation. They taught that small boring decisions made consistently actually matters in building your net worth.
When you remove coins from daily life, you remove a visible lesson:
- Small leaks sink big ships
- Tiny habits create big outcomes
- Wealth isn't built in windfalls, it's built in small one-inch increments.
We no longer teach kids to save spare change because spare change barely exists. Instead, we round up purchases in apps and hope the lesson sticks. Often it doesn't.
The Bigger Warning
We're on a clear path toward a world where coins and physical change simply aren't part of everyday life. It won't happen overnight just like checks haven't gone away. But over time, change will be eviscerated from our daily lives.
And when the money changes, the language changes as well.
No one's going to say pinching pennies when pennies are gone.
- Maybe it becomes pinching nickels.
- Maybe it becomes watching your taps.
- Maybe it disappears altogether.
But here's dangerous part I see as a personal finance expert. When pennies feel meaningless, people start treating dollars the same way. And once dollars become invisible, budgets break. Debt grows. Saving stops. Not because people don't care but because they don't feel the weight of their daily money decisions.
Because in personal finance it's hardly ever that the big expenses that ruin you. It's the pennies you stopped paying attention to even after they were gone.
Ted Jenkin, CFP®, CRPC®, CRPS®, AWMA®, AAMS®, CMFC®
Managing Partner & Chief Marketing Officer | Exit Wealth® Advisors
All opinions expressed in this newsletter is for general informational purposes and constitutes the judgment of the author(s) as the date of the newsletter. The opinions and views expressed by the author are personal and based on economic or market conditions at the time of publication. Actual economic or market events may turn out differently than anticipated. Nothing in this material is intended to serve as personalized investment, tax, or insurance advice. These opinions are subject to change without notice and are not intended to provided specific advice or recommendations for any individual.
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