Two Cents Worth

by Dual Income No Kids on February 25, 2008 · 0 comments


I remember buying penny candies at the only store in our small town. I thought they were tasty and within my twenty-five cent budget. My mom wasn’t so keen on me buying twenty-five tootsie rolls just because I could. I now have a better understanding of why she wouldn’t want my twin sister and I bouncing off the walls, even if it did just cost a quarter for the ride!

Being in Switzerland recently had James and I talking about our beloved penny. It seems that even though it now takes more to make a penny than it is worth, in fact double its value, the feds still aren’t willing to give it up.

The underlying reason for holding out on the penny comes down to a possible increase in inflation. Presumably once you don’t have a penny around, folks will just round everything up.

There have been several attempts to do away with the penny, but thus far nothing has stuck.

1) Cost is an issue. Would you pay two dollars for a one dollar bill? Is it not bad enough that we already get screwed on the exchange rate, but then we shell out more than its value to make pennies.

2) Most financial transactions are done electronically these days. This means, that as is still the case for some countries, you can charge for the value of a penny without having the expense of making pennies.

3) I would also advocate for a stronger push on one and two dollar coins, they save money because they last longer and are handy for small transactions. Pennies have served their purpose in allowing me to slide my shiny coin up on the counter for a lolly, but I think their time has come. Here are a couple of things to consider in the great penny debate:

Switzerland, as well as most of the rest of Europe, said goodbye to their penny equivalents. Folks there end up using debit or credit cards so often that people don’t have to deal with coins if they don’t want to.

We’ll see how long it takes us to come around. I imagine that it only a matter of time before the old penny is a thing of the past, just like one cent candy.

Cheers,

Miel

You can check out more at The Mint.

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