This article is by staff writer Adam Baker. Baker is a founding member of Untemplater.com, a new multi-author blog focusing on personal finance, entrepreneurship, and life design for people in their 20’s and 30’s.

Americans have been fairly resistant to the introduction of a coin form of our dollar currency. We have them in circulation, of course: The Presidential Series and the Sacagawea gold coins are both currently being minted. You can also occasionally bump into a Susan B. Anthony silver dollar or, if you’re really lucky, an Eisenhower Dollar. (For some reason, it seems like this rare sighting almost always occurs in small-town gas stations and grocery stores. Don’t ask me why.)

Despite several attempts to introduce a popular dollar coin, the dollar bill continues to enjoy its position as the dominant $1 currency.

Since traveling overseas, I’ve realized the story is a little different elsewhere. Both New Zealand and Australia have not only $1 coins, but $2 coins as well. And the dollar bill? Well it’s non-existent. The smallest paper note is the $5 bill.

Coins are just dying to be spent
At first, the difference seemed negligible. Who cares if it’s a coin, a paper bill, or a credit card?  Ignoring exchange rates, a dollar should be spent the same regardless of material, right?

Sounds good in theory (at least in my head), but after several months of purchasing tram tickets, bottles of water, and Mrs Higgins cookies with small bills and coins, I noticed a difference. Magically, it seemed like I had a much easier time spending a handful of coins than I did a small wad of bills.

In the States, Courtney and I generally ignored change altogether. In fact, when we had something like a $3.79 charge, we’d simply record it as $4 spent to help simplify our tracking. This meant that in rare cases where we paid for a small purchase with only pocket change, we usually didn’t track it at all.

However, we found the system we’d grown accustomed to in the States was a little more expensive to operate overseas. A small handful of change could easily be six or seven bucks!

Ditching the penny once and for all
The Australian and New Zealand currencies are also void of any pennies (although the New Zealand ten-cent piece looks like a penny). Electronic payments, including credit and debit, and still processed down to the penny in most cases; however, when paying in cash, they round the transaction to the nearest $.05 (or $.10 in New Zealand).

It wasn’t until experiencing a penniless system that I realized how pointless (and annoying) the one-cent coin can be. Ironically, a 2008 New Yorker article points out that “primarily because zinc…has soared in value, producing a penny now costs about 1.7 cents.” Yikes!

You don’t have to travel across an ocean to realize that fighting to keep the penny in circulation is a losing battle. And in my opinion, the widely-popular dollar bill won’t outlast the penny very long at all.

And you know awhat? Although Courtney and I found ourselves much more willing to splurge with the increased coinage, I still favor the system from a  usability standpoint. The question left to ask is:

Why are we fighting so hard to resist this change?

It seems like a logical shift. I don’t get it! Are you ready to ditch the dollar bill and the penny?

Sacagawea coin photo by flower beauty.

This article is about Odds and Ends  Wednesday, 6th January 2010 (by Adam Baker)