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Should We Start Saving Up Old Pennies?

Adages, Frugal Tips

Pennies are such controversial little coins. This humble denomination has been around for centuries, and has seen it’s worth go from respectable to negligible. About 200 years ago, a penny could buy you some food. As a young child, I remember getting small gumballs for a penny from a barbershop’s gumball machine. But I don’t see that anymore – it’s no longer profitable to sell anything physical for just one penny. Maybe you can buy virtual items for a penny, and I bet somewhere they have penny slot machine for those poor gambling addicts.

Pennies definitely must not be worth much these days, because I see them thrown around a lot. People just leave them behind in big groups sometimes. Just today I noticed a bunch of pennies thrown into a large soda-can recycling bin. Whenever I see clumps of pennies thrown somewhere, obviously it’s not an accident and it’s a penny-hater. Many people just loathe pennies, it seems. I’m sure the very wealthy people are in that category. So they throw them into pools of water or leave them behind. Sometimes you may find pennies that are actually collector’s items as they are wheat pennies from before 1959.

Ben Franklin is famous for collecting old adages like “a penny saved is a penny earned” and giving us many other frugal tips. Another is “If you would know the value of money, go and try to borrow some.” We should remember that pennies add up, so just throw them in a jar somewhere. Or drop them in those charity jars at Wal-Mart of McDonalds. Or maybe make a little penny basketball goal with a big pot underneath.

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But there are many people in the US today who do count up their pennies and bring them to the bank. I remember seeing someone at the bank once with a 3-gallon jug full of coins. It becomes a burden to carry them around, but it’s still money. And there are some penny addicts in this world, such as Louis Staffilino, who collected 8 million of them over 65 years. Then he took them to the bank and got his 80,000 bucks. Yeah, I’m sure a stack of 800 benjamins that is about 3 & 1/2 inches thick is nicer and easier to carry than a truckload of raw metal. You can’t go to Best Buy and purchase a new TV with pennies. But one time, when I was younger and less reasonable(I hope), I did buy fast food from Burger King with only pennies. I was with a friend who goaded me on to do it. It came out to be about $3, and this was with the drive through also. The woman patiently counted them out, but if I was her I would feel so sorry for the guy that I’d say “OK move along.” I feel guilty about that now, but oh well. I’ve given in to convenience and now only use credit cards when I purchase things.

Today’s tiny Lincolns are made of cheaper stuff than they used to be. Long ago, before 1982, the pennies were 95% copper and 5% zinc (the elements that comprise brass). And at one point, in 1943, the U.S. government decided to to produce pennies that were mostly steel and coated with zinc. They needed copper for the war effort, and so all the pennies from that year look noticeably darker and were totally hoarded since they were so rare. They are very rare in circulation but not worth more much in average condition, because most of these coins were saved inside since people thought they’d become worth a lot. There is an economic theory called Gresham’s Law whereby people usually start to take the valuable money out of circulation(like when all the silver quarter’s disappeared once the government changed their composition from 90% silver to a copper and nickel alloy).

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Today’s pennies are 97.5% zinc and covered with a tiny layer of copper. The U.S. government has outlawed melting the pre-1982 pennies because they are worth significantly more money in their copper content than at face value. It’s also illegal to transport a huge bundle of pennies across the border. Even these new pennies cost more for the Mint to produce than their face value, but nobody is interested in melting them. Zinc is not half as useful as copper in today’s world.

It’s likely that the penny will stick around for a while longer, because the government has issued a new redesign of it. The debate will continue about whether it’s worth keeping around, but for now it will still be the lowest U.S. denomination.