Chances are if you look around your house, your car, or any of your pockets, you will find a penny or three. Those little pennies really don’t get much respect in today’s world, do they? After all when you shop, if you start to dole them out at the cash register you might get some kind of dirty look like “What are you doing…just give them a damn nickel! Don’t look for the pennies!” Or after you pay with your cash you dump the two pennies you get in change into a little tip jar or charity collection (or is it?) on the counter.
Those orphan pennies are so small and insignificant, right? They seem to be more of a nuisance than anything of real value, and when you have them around you usually just ignore them. Why do you diss all these pennies?
Remember the Old Sayings
“Find a penny, pick it up, and all the day you'll have good luck” or “A penny saved is a penny earned” or “Take care of the pennies and the pounds will take care of themselves”. Whatever happened to those ideas? The now apparent dissing of the penny really hurts my head.
When I was a kid, a penny was a pretty big deal. I used to collect glass soda bottles and return the empties to the store just to get the two cents deposit return so I could buy some chewing gum or if I was really lucky I’d find enough to buy a brand new “pimple ball” to use for stickball. I was pretty proud of myself when I did that.
I even collected pennies, too, you know in the blue binders, looking through every penny I had and searching to see if I could find that rare 1909 S VDB*. I never did and to this day I wonder if it really ever existed?
*The 1909-S VDB Lincoln Cent is one of the most famous United States coins. Its relatively low mintage of 484,000 pieces and the interesting story of the “V.D.B.” initials combine to make it a particularly popular collectable coin.
Coin collecting…do kids really do that kind of thing today?
But the Penny Is a Real Contradiction and Here’s Why
The tired, disrespected, old fashioned, and strangely singularly colored coin—the penny—is actually pretty valuable.
Deep down inside, people do realize that pennies can and do add up. After all, when we are shopping for groceries, aren’t we pretty careful to choose the items that cost less? We are looking sometimes at just pennies when we make a decision. Your grocery cart and those items mean that the pennies can really add up and turn pretty quickly into dollars. When we are checking out, those small amounts add up to big amounts of savings. I think it’s the reason that why we spend extra time checking prices and looking for those coupons and discounts and bargain hunting, isn’t it? A penny here and there makes a huge difference to you and sometimes you aren’t even aware of it.
What’s a Penny Really Worth?
It costs 1.8 cents for the U.S. treasury to actually make a penny today.
Because of that cost, for years now people have been advocating to get rid of the penny. Even though it might seem kind of ridiculous and pretty wasteful to spend and make them, I still love them. If you want to get rich, I suppose you could try to collect enough of them, scrap them, and then possibly make an 800% profit on it when you do! You might need a tractor trailer though to help with your haul and make it really worth your while, so good luck with that. But wait a minute please, there is still a way that pennies can be your best friend (BFF).
REALLLLLL Penny Power
I recently read this interesting article about the value of just one penny. In it, they discussed a $10,000 credit card debt at an 18% interest rate. That means when you’re making monthly payments of $150 a month you would never pay the loan off because you are only paying the interest on that debt. You’re never paying anything towards the principle. But…
If you add just one penny to that monthly payment, you will have it paid off in under 54 years!
Now, paying back a $10,000 loan for 54 years is awful and scary, but if you just see that, then you’re your actually missing my point here.
Think about how powerful that penny really is in this example. That debt that was never ever going to be paid off drops all the way down to 54 years and is then forever gone…just because of a single penny every month! Now when you compare those two situations, you do see that penny power is pretty stunning, isn’t it?
Take This Quick Quiz
You have a choice. Pick one: You can choose getting a million dollars in cash right this second or I’ll give you a penny right now and then every day for a month, I’ll double it. I’ll give you two cents tomorrow and four cents the next day and so on for 31 days. Which one will you pick?
Well, If you were smart enough to choose the penny doubled, you’d have a tidy sum of $10,737,418.24 at the end of the month. And you were going to settle for a million bucks, you silly goose!
So What’s Your Point, Gary?
Aretha Franklin sang about “Respect” back in 1967 and I’m just saying give that little bitty ole penny some respect today too!
Every single penny you can pay towards your debt is one less penny with interest compounded on it that you save and it multiples exponentially for you. That’s why those few extra pennies that you’re now spending every week on stuff like supersizing your “big meal” or spending an extra few pennies on every gallon of gas for your car because you’re just too busy to drive two blocks further to save a few of them are much better used instead to turn around your debts with a powerful repayment plan. Putting enough of those pennies together can become pretty powerful.
Money Mindset 101
It isn’t just the pennies. You also can and will create a new money mindset when you begin to respect the penny. You will start to realize that every purchase you make matters, every the small ones. Some days even buying a 99 cent candy bar or that plastic 16.9 oz. bottle of water from the convenience store is just another silly splurge. Putting that small amount of money towards your debt instead will make you not only feel great, but it will make you richer.
I don’t want to omit how important saving your pennies can be, too. It’s not just debt you want to defeat, but it’s the ability to gather pennies and make them become dollars that you actually put away and save for your goals. Saving them means you’re building your emergency fund, college fund, retirement funds, heck every kind of fund that means more security for you. Pennies will not be the “be all, end all” but they certainly are a part of the plan and should be!
As a side benefit, on those really bad days when you really, really need that candy bar and will just explode without it, it will taste better. And when you start bringing your own refillable plastic water bottle with you and saving that buck, you’ll truly know that you made the best decision and that it was worth saving that hard earned money.
Final Thoughts
These days, it’s tough to remind yourself about the real power of a penny. But just like any long journey begins with one small step, the penny may just be that one small step when it comes to cancelling out your debts. If you learn to love the penny, then you will also fall head over heels when you see what your dollars can do for you in the fight against your debts! Try to remember that the next time when you’re tempted to ignore them and leave those powerful pennies on the ground!
Now that you know what to do with pennies, when you see a penny on the ground, will you bend down and actually pick it up?
