Are Americans Ready to Ditch the Dollar Bill?
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.
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To me, the most logical choice is to print or coin whatever option is cheapest to the federal government. A penny, for example, costs more to produce than it is worth. Likewise, we should be coining money with the least expensive metals and printing with the least expensive paper and ink – supposing we are compromising strategies to combat counterfeiting – possible.
The best way to get people to use the dollar coins is to get rid of the dollar bills. The government has never been serious about the dollar coin. They seem to mint them in a relativity small number, so people collect them, and they keep the bills around, so people don’t need to spend them. One ends up reinforcing the other. Most people don’t see them very often, so when they do get one they hang onto it because it feels rare. The net result is that the coins just sit around in piggy banks because people thing they… Read more »
Ditching pennies is a good idea. They’re annoying. But change in general is annoying. It’s heavy, and makes noise if you’re carrying any reasonable amount. Why would we WANT to switch to dollar *coins*? Other than durability, there isn’t any good reason I can think of. I would much rather carry a handful of dollar bills, than a handful of dollar coins. The bills are lighter, and quieter. As for spending, I tend to only spend nickles and pennies. Anything larger gets deposited into a coin jar, then when full, is converted to paper money, which is either saved, or… Read more »
Here in Canada we switched to dollar coins around 1985 (if I remember properly, I was 5 then), and on to two dollar coins years later. At both those times people complained how heavy everything would be, how annoying they were, etc. Honestly, no one mentions that anymore, and it’s true that you spend them more than bills. They become like quarters, basically non-money that you don’t notice. As for the cost argument, I think coins are cheaper than bills in the long run because they don’t tear and get damaged. The biggest draw-back is definitely strip clubs though and… Read more »
The federal government has actually started pushing the $1 coin fairly heavily (even shipping them in large lots free of shipping charges to individuals and businesses), in order to facilitate the “phase out” of the bill. This is because a coin can stay in useful circulation for 30 years or more, while a bill’s useful lifecycle averages around 9 months (+-). Obviously, this saves funds for the government that can otherwise be spent on other frivolous pursuits. Sorry, no politics. Anyway, they just need to quit issuing the bills if they want to get rid of them, because there’s an… Read more »
Lose the dollar bill and every coin except the quarter and dollar. We would have two coins. The dollar coin should have Lincoln and keep Washington on the quarter.
I am all for ditching pennies, but I like dollar bills. Coins are much more cumbersome to carry.
-Dan Malone-
I’d argue that it’s exactly for the inconvenience that we should replace the dollar bill with a coin. Coins, as Brenda notes, are heavy and noisy – and thus less likely to be carried and carelessly spent. I never start the day with change (see above re: heavy and noisy), so automatically any dollar coins I received during the day would go into my “roll it and save it” dish. Money we don’t carry is money we don’t spend. How many crucial, essential purchases are made for less than $5? The penny is a relic and definitely should be ditched.… Read more »
The reason they don’t have dollar bills in New Zealand and Australia is because the government got rid of them, not because the people chose coins over bills. If the U.S. government wants a one dollar coin to be successful they will have to stop making dollar bills.
It is time to stop making the penny as well.
BUY low, SELL high.
I’m betting the dollar will come back up in the future, for instance I may invest here: DRR (double short Euro).
Couldn’t agree more.
With a little help from Google, I found that we produce about 13 billion pennies a year. First of all, why do we still need to be making pennies. Don’t we all have enough of them?
Second, that’s a lot of money being wasted.
My husband and I are on a cash only spending basis, Dave Ramsey style. I would HATE carrying around dollar coins instead of bills. I already dislike carrying a purse, instead putting cash into my pocket if I’m wearing jeans. But to carry around a bunch of one dollar coins? I’d have to deal, as I refuse to go back to my debit card. But I’d be dragged into using dollar coins kicking and screaming.
i am whole heartedly in favor of dumping the penny and introducing the $1 coin (and maybe $2 coin). i never have many anyways (dont carry much cash).
would be much easier to make vending machine purchases with a $1 coin (ever tried to insert a crumpled $1 bill?)
Some Canadian cousins of mine consider the $1 and $2 coins to be “change” and let me know they didn’t need to be reimbursed when I borrowed some from them. Further, they said that when they took their “change” jar to the bank, they had over $1700 CDN!
I’m a Canadian citizen, permanent resident of the U.S. Canada uses also uses $1 and $2 coins. I much prefer the coin system. I also “ignore” change. It either gets tossed in the bottom of my purse or in the coin jar (vacation fund) if I used my pockets, instead of purse and that includes the $1 and $2 stuff whenever I am “back home”. Bonus: Whenever my daughter needed a dollar or two for some fundraiser or another at school, all I had to do was reach in the bottom of my bag and grab a handful of change… Read more »
Two things that have not been covered by other commenters: inertia (is there any need to go any deeper into this point?) and compatibility. There have to be devices that read and hold this currency: specifically vending machines and cash registers. Most vending machines (outside of the USPS ones) can’t take anything more than a quarter and cash drawers really need an extra slot for the “special” coin (or coins if we move to a $1/$2 coin system)
Personally, Im with most of the other commenters though…coins are a pain to carry and I’d rather keep the bills around.
“A $5 bill saved is a $5 bill earned”
Interesting. In Japan they have a 500 yen coin, which is now worth $6!
But I think paper currency will disappear and be replaced with debit cards. And these debit cards will be integrated into all kinds of things, like keychains and cell phones.
I’m Canadian and we’ve had $1 and $2 coins since I was tween/teen. Frankly, I cannot even remember life with dollar bills. I do remember all the hemming and hawing when the government announced that it would phase out bills. And really, it doesn’t make a difference. How likely are you to keep $5 in dollar bills in your wallet? Having $5 in paper bills is just as much a nuissance as it is in 3 or 5 coins. Actually, since American money is all the same colour, coins will make it easy to differentiate denominations. No more accidentally paying… Read more »
1. It’s not the same color; the dollar is green, $5 is purple, $10 is yellow, $20 is light green, $50 is red, and $100 is blue.
2. It’s not just as much of a nuisance, the coins are way more of a nuisance than the bills. Not sure how you came to that conclusion.
3. I don’t know who accidentally pays for something with an incorrect bill, never seen that happen before.
I was about one week into a two week stay in France before I encountered a (euro) penny or nickel –Â and loved it. Combine that with the fact that prices usually (always?) include tax, you end up with sensible, rounded prices rather than the all-too-common .99 nonsense. (Seriously, does that actually fool people into thinking that the price is lower than it really is?) I would gladly nix pennies. As for dollar coins vs. bills, I lean a little bit towards coins but don’t really care much one way or the other. If it’s cheaper in the long run to… Read more »
When I travel I often end up with $20 or more worth of coins in my pocket. Especially when traveling in a Euro country, where the 2 Euro coin is worth almost $3 USD. I have tried to promote the dollar coin (buying them via the direct ship program previously mentioned) and usually I get one of two responses: Either they treat it as something special (once a person behind me in line at a store bought the coins out of the register), or they get mad at me (I have a close friend that not only refuses to take… Read more »
The reason for this seems to be the same as the reason we’ve never adopted the metric system. Logically it makes perfect sense, but there’s this “because that’s what we’ve always done” emotional attachment to it which people cannot seem to overcome.
I think we’re more likely to see changes to currency come about because of the prevalence of electronic transactions. In a generation or two people will find cash as archaic as paper checks are starting to become today.
@16: JakeIL7
Compatibility is why all the current dollar coins are he same size and weight as the Susan B. Anthony dollar, so machines that used to take them would also take the new ones. I’ve found a lot of newer vending machines will take dollar coins, but ‘a lot’ is still maybe 30%.
What timing! I just got back from the vending machine where I was wondering why the darn thing doesn’t take dollar coins. I am a heavy user of dollar coins, as I find them a convenient way to make sure I always have cash handy for the parking garage machines. I am always complaining that the DC coin-meter parking doesn’t take them, though the cost is $2/hour. It only takes one two-hour meeting to realize that two $1 coins are more convenient to carry than 16 quarters! I concur that the adoption problem has more to do with the limited… Read more »
Its not your dollars you have to worry about… its your pennies…
I dont care what anyone says, a penny is a penny… if i have to pay someone 5 cents for a 3 cent purchase, i lose out on 2 cents… you add 2 cents to everything you purchase and you start talking dollars you are losing out on…
all you people who follow this site should know a penny saved really is a penny earned…
There are times when I find coins much easier to use than bills. For example, my alma mater’s parking garage machines have a terrible time handling even the newest, smoothest $1 bills — I once spent seven minutes trying to exit the garage because the machine refused ever single one of the ten dollar bills I had with me. In order to avoid a repeat of that experience, I went to my bank and got rolls of quarters. The machines haven’t been a problem since.
Another interesting point is that Australia (and fairly sure NZ as well), we don’t actually have paper money, its all made out of a type of polymer. Means it lasts alot longer, better security against forgery (fancy clear panels and other features), and brighter colours ($5 = purple, $10 = blue, $20 = redish, $50 = yellow, $100 = green)
andyg8180: The beauty is that it cuts both ways. Over a long period of time, the times when you add 2 cents to a purchase or when a merchant adds 2 cents to your change will probably even out. In fact, you could probably adjust your purchasing habits to preferentially get those extra 2 cents of change, thus allowing you as a crafty consumer to earn many free pennies. 🙂
I’d gladly do away with pennies AND paper dollar bills. I hate having a wad of singles because not only is it visually misleading (oh wow, a stack of money in my pocket! oh, it’s only $8 *sigh*) but they make my wallet too fat and literally a pain to sit on.
And pennies…they’re only good for saving and changing in at the bank when you run out of space to store them.
I’m baffled by all the people saying that .25, $1, $2 are just throw away monies that they don’t account for.
I agree the penny should be phased out, but if the dollar moved to a coin I wouldn’t want to value it any less or feel like I could give it away at no cost to myself. Negotiating with Euros took a little getting used to, but that didn’t mean I didn’t pay attention to my “small value” coins.
I’m totally for ditching pennies, but I much prefer dollar bills over dollar coins. Womens clothing generally doesn’t have pockets, and reasonable sized wallets don’t hold coins so any change I get just gets thrown into the bottom of my wallet and then dumped into a container until I take the whole thing somewhere to deposit into a bank account.
#12 Cassandra – My family is also on the Dave Ramsey kick! The one thing we could not do was carry cash. We found we actually spent more with cash, and could not figure out what we had done with our money once it was spent. We ended up going back to the debit card, and sure enough, our money lasted longer!
As many others have said, I am all for ditching the pennies, but I think the dollar bill still has its place.
I read somewhere that when the half penny was taken out of circulation it was worth about what a dime is today. I think rounding is a good idea, and if it would force gas stations to stop posting prices as 9/10 of 1c I would be even happier about it. How about we get rid of the penny and nickel and list everything to the closest tenth instead of hundredth. Many stocks already trade at partial pennies, though us in the real world never see them. The same happens with sales tax: it rounds off. A friend of mine… Read more »
It’s hard to make a judgement about the money system without having tried another one. As a Canadian I find the US bills far more annoying every time I travel south. Bills take a lot of space in my wallet. bills are more difficult to sort. It’s easy to blindly grab a handful of change and find the $1 & $2 coins without looking. US Bills require visual check which means pulling out a wad of cash. I tend to collect $1 bills which I visit the US, but coins are much easier to get rid of. It does collect… Read more »
regarding the dollar bill to coin: I support it for a couple reasons, one being that it will be easier for the blind. The federal government has been resistant for years to changing our dollars to make it easier for blind people to use due to the expense involved, but I don’t think they took those people into account even when they redesigned the bills. I am not usually one out shouting for civil rights, but this seems a basic thing we should take into consideration as we redesign bills and so forth. The father of a friend of mine… Read more »
andyg8180 – I’m glad someone else came out in favor of keeping the penny. Penny-pinching, lucky pennies, pennies for your thoughts, I wouldn’t mind keeping them around for the idioms alone, plus of course the truth in the idiom you cited. Of course, it’s ridiculous that it costs more than a penny to make a penny, so I wouldn’t mind a redesign. I’m in favor of dollar coins. I’m pretty frivilous with my dollar bills already (lotto tickets, vending machines, video game tokens and the like) so it doesn’t make much difference to me if they get caught up with… Read more »
This debate is hilarious for a Canadian like me! I find dollar coins to be much easier to handle for vending machines, coin operated laundry, paying transit fares, parking, etc. I’ve been using coins for decades and haven’t noticed any unusual fumbling or dropping down sewer grates. (Besides, if you do drop a dollar coin, it isn’t going to blow away like a bill!)
I guess it’s what you’re used to. I’m too young to remember much about the changeover from bills to coins, but I can’t imagine going back now.
Japan has everything from 1yen up to 500yen in coin form. The first bill is 1000Yen (which is like $10). I don’t hear anyone complain about change there and that can get pretty heavy, pretty quick in a society that treasures cash over plastic.
We don’t complain in Canada, either.
really, how hard is it for you to get rid of your near useless $1 bill? You can spend a buck easy: coffee, gum, snacks.. or you can save it.
IMO– moving to a $1 coin would increase savings in America dramatically. I typically don’t carry a lot of change in my pockets and it magically collects on the desk, my bookshelft, etc. Several times a month we gather up the change and are always suprised at how much there is.
When living overseas, I had this same habit. Over a 6 month period, I had over $100 in change on the table. America is definitely ready for a $1 coin!
I really thought this blog post would be about going paperless/coinless altogether and using strictly debit/credit. That’s what I do 99% of the time anyway.
I’d advocate what someone else said above and go with whatever $1 form is cheapest to produce. And ditch the friggin’ penny already, round everything to $0.05 and call it a day.
You know what’s funny? I had almost this exact same thought when I moved out of the country to Israel and then came back and visited the States after my first 11 months. The first thing I noticed was how BIG American bills are – I never noticed it before because my wallet was made in America and accomodated the bills naturally. But coming back with my Israeli made wallet – I literally cannot fit the bills ($1 or any denomination for that matter) without actually folding it in half or in quarters. Very frustrating. But back to the coins… Read more »
As others have said, it’s not just a couple of countries that have coins for the equivalent of a dollar; it’s many countries, I would guess that it’s most of them. Also I strongly agree with what someone else said; this will never change in the US until the government decides it is willing to put up with the whining and just start phasing out $1 bills altogether. A few years ago I read a comment from a Mint official saying that the reason they didn’t make many $1 coins was that there was so little “consumer demand.” What does… Read more »
Why not drop that digit altogether? The nickel is also far into the red to manufacture (and getting more so all the time), and I think people would prefer $1.1 or $100.3 (though it would look strange for a while) than deal in the fives.
Hi All I’m a NZ’er and like Rachel (#24) we don’t have paper notes, we have the polymer ones. They go through the wash fine and last for ages. Those who mention that coins are heavy and a pain to carry around – well here in NZ there aren’t that many people that I know of that actually carry physical money (coins or notes). Debit and credit are the way the go – there are only the occasional times that I would need physical money and this is where there is a collection for the Cancer Society, Lifesavers, work raffles… Read more »
@ ElvisKungFu : I actually find it’s a bit of both. If I have a $2 coin in my pocket, there’s a good chance it’s going for a coffee or something useless. If I make it home it goes in a jar, which when I counted last month had about $150 in it. Like anything else money-related, it’s all about discipline. Money’s still money regardless of the shape. Being Canadian and having lived in Japan (which others have mentioned is almost entirely cash-based and who have a much wider variety of coins), at the end of the day it doesn’t… Read more »
I live where it’s expensive to ship pennies…we don’t use them.
I don’t miss them and sort of get annoyed when I get handed a penny as change in the States (it averages out…round up, round down…pay by debit most of the time)
Even though Euro 1 and 2 cent coins are worth more than that in dollars they are equally annoying and I would not mind seeing them go away either. Even the 5 cent coin seems to accumulate in piles around my house.
I lived in the UK for five years – they have no 1 pound notes, although they do have 1 pound coins. Nobody mentions that the pounds are heavy/etc. because, really, it’s so easy to spend them. Multiple dollar bills annoy me as much as multiple pound coins, because both are bulky. When it comes to vending machines, coins work substantially better than bills. I never had a vending machine reject a pound coin – they reject dollar bills all the time, however, because one is a little torn/folded/not crisp enough. The UK does have pennies but I could get… Read more »
I think complaining that the penny costs more than a penny to make is a straw man argument. When minting the penny, you are worried about the utility and durability of the coin itself, not the face value. A penny is spent thousands of times over the course of it’s 30 year avg lifetime and the long life span is what is important. Think of it this way. If we could make the penny for .9 cents, but it only lasted 5 years, would that make you happy? It shouldn’t. Or, if the raw materials of a dime (a thinner,… Read more »
I really don’t care either way what they do with coins. I almost exclusively use debit or credit cards. I can’t remember the last time I purchased something with cash.