Henny Penny: The Sky's Not Falling, But the Penny Is

There's been a lot of talk lately about the U.S. finally phasing out the penny. Some stores are already rounding totals to the nearest 5 cents. Some banks are no longer stocking pennies at all. What does this mean for us and our wallets?

The penny costs more to make than it's worth, reportedly costing 2-3+ cents per penny to manufacture, and has for nearly 20 years. And we mint hundreds of millions of them per year.

The first bill proposing eliminating the penny was introduced in 1990, and in February 2025, Trump announced his plans to end production of the penny.

The US Treasury just placed its final order for penny blanks in May 2025.

This isn't the first time a coin has been retired.

- Canada phased out their penny in 2013.
- Australia did it in 1992.
- New Zealand phased out its 1c coin in 1989 and 5c coins in 2006.
- In 1857, the US phased out its 1/2 cent coin.

What happened?

Nothing.

No price increases, no lost savings, the sky did not fall.

Why?

Because rounding rules protect fairness:

- $3.01 → $3.00
- $3.02 → $3.00
- $3.03 → $3.05
- $3.04 → $3.05
- $3.05 → $3.05

Over time, it balances.

Digital payments will continue to charge to the cent.

And who uses cash anyway? Haven't you heard that Gen Z thinks "Cash is Cringe"?

(They also said they'd pick money over love.)

The story here isn't really about the penny, it's how small amounts of money can help or harm us.

Notoriously frugal (ask my kids), I've always paid attention to the small bits. I'll often

- Walk instead of subway
- Make coffee at home
- Ask for a cup of water instead of buying a bottle of Poland Spring

But even I have started to feel like, 'Oh what's the big deal? It's only $5.

But $5 is $5!

Five dollars 40 times a month is $200.

$5 saved per day is $1,825 in your emergency fund.

$5 a day invested for 50 years could be worth $2,700,000.

I think this is what shapes our financial lives. It's not the big decisions, but the small, quiet, autopilot, 'what's the big deal?' ones.

The sky will likely not fall if the penny goes away. But it's a good reminder to focus on the small things.