Are Americans Ready to Ditch the Dollar Bill?

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 aren’t worth spending. Start minting enough coins and stop minting the bills and things will change very quickly.

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 probably the best reason to keep low-currency bills.

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’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. If the feds were to continue minting them, they should be made of recycled aluminum – as should nickels and dimes. It’s ridiculous to spend more than the face value on creating money.

I think most people have avoided the dollar coins not because they are inconvenient or because they appear rare and collectible, but because ours are nearly the same size as a quarter and thus easily confused. At least the “gold” ones are a different color, a little thicker, and have a smooth edge – but that’s probably not a sufficient difference for our ageing, unobservant, and terminally distracted population.

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).

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.

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!

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.

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 was about one week into a two week stay in France before I encountered a (euro) penny or nickel – 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 use $1 coins instead of bills, great, let’s use coins. That said, I’m not a big fan of the current $1 coin design – it’s too hard to distinguish from a quarter at a glance.

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.

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 places they are accepted and the abundance of the $1 bill than anything else.

-Dollar Bill Cheerleader

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.

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’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.

#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!

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 told me a story of her mother who hated dealing with decimals, so she would enter purchases in her register to the nearest dollar. When my friend found out she panicked, but she found that after well over a decade of this practice her mom was less than $10 off. You might lose 2c on this transaction, but you’ll make it up on the next one.

30 billion pennies for 300 million people: just give me a $1 tax credit for the pennies not being made and we’ll call it even on the year.

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 was blind and my friend tells me he had to worry about getting taken advantage of at every transaction because all of our bills are tactilely identical. A dollar coin is a step in the right direction for that.

And btw, if we remove the penny and nickel and replace them with a $1 and $2, it is the same number of types of coins in circulation.

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.

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!

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 – we also don’t have pennies here in Israel and when I started recieving pennies in change during my visits, I thought to myself – what a waste! Here in Israel, the cashiers round up to the nearest .10 and if you have change less than .5, you don’t get your change – they just give you the rounded number. Hard to get used to at first, but then it just makes life a bit easier.

So, in essence – I’m all for getting rid of the pennies, unless at the end of everyday, you empty your pockets into a spare change holder and the roll them and deposit all of them into a savings account at the end of the week/month – and then and only then, will you learn to deal with them :)

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.

@ 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 matter. People don’t like to change their habits, but you’ll get used to anything.

Personally I’m looking forward to the Iris-scan debit system.

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 behind a system that got rid of them and rounded to the nearest nickel.

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.

Are you ready to ditch the dollar bill and the penny?

Pennies – YES
Dollar – NO

Here’s why:
As you already stated, the penny costs more to make than it’s worth. They have lost their “value” a long time ago. If I was to take a poll, I wonder what percentage of people would stop to pick up a penny on the ground vs. a nickel, dime or quarter.

I think converting the dollar bill is a bad idea because psychologically we have devalued coins. We say things like “chump change” and “keep the change” sometimes implying the amount is trivial or insignificant. Dollar coins will probably prove counter-productive to saving.

Also, carrying a few dollar bills comes in handy for smaller tips and spontaneous giving such as a couple bucks for the shampoo girl, or a few dollars for the bagger at the grocery store. Personally, I’m less likely to carry dollar coins.

Kita

@20 carrythebanner:

“… the all-too-common .99 nonsense. (Seriously, does that actually fool people into thinking that the price is lower than it really is?)”

Yes it does. Research has shown that people only ‘see’ the first one or two digits of a price. So something that is $16.99 is more appealing than something that’s $17. It gets big when you’re looking at larger purchases, there’s a reason you find houses and cars at prices like $49,950 and $199,500.

As someone who’s lived with dollar, pound and euro coins over the past 20 years I find these protests amusing. Yes, they’re heavier. But you know? You never find one shredded in the corner of your wallet. Also, you do forget about them, more than with bills, so when you finally upend your wallet and go through your change you make the happy discovery that you’ve got $20 in $2 coins.

But really it just comes down to inertia. People hate change (pardon the pun). You’ll moan about it now but in a couple of months you’ll be over it and wonder what the fuss was.

Re the rounding of prices to the nearest 5c – yeah, it’s annoying. But it all works out. If you want to be clever you can start getting $20.02 worth of petrol every time. Or, depending on the way it would round, use a debit card sometimes. I’m not anti-card so almost all my purchases are charged the exact amount.

I noticed when I traveled to Belize for this Christmas vacation that they used dollar coins rather than a bill. The lowest bill I saw was a five, everyone gave change in dollar coins. I was interested by that fact and this post reminded me of it. I agree, get rid of pennies, and I would be ok with dollars too. It would be nice to see a $2 coin if they did that though.

I’m all in favor of getting rid of pennies. There’s too many out there as it is. I lean towards keeping the dollar bill because I don’t like to keep coins around. But I must admit that with dollar coins, my change jar would add up to a lot more quickly!

DO NOT DO AWAY WITH DOLLAR BILLS!! I manage a bank and run a teller drawer too and HATE HATE HATE the stupid dollar coins and $2 bills! They are the worst. I like the idea of getting rid of pennies though. They are pretty pointless. Can you imagine all the frugal people freaking out about rounding up from 6 cents to 10 cents though? lol

I wouldn’t miss the penny, but I prefer the dollar bill for reasons covered above. One reason I’ve disliked the dollar coins is because they are too small and can easily be confused for quarters. I think they need to be as large as half dollars – which come to think of it, have never seemed very popular either. But their scarcity makes you take notice of them; you won’t mistake one for a quarter.

The customers at small town convinence stores spending strange currency are often strapped for cash and spend their “collectible” coins– i.e., somebody bought them as a gift.

Funny corollary:
As a Canadian who has moved to the US, I find myself always short of cash when I go to pay for things under $10. In Canada, a thick wad of bills means that I can cover a $7 purchase with the money in my wallet. In the US, I end up looking foolish when I just have a useless pile of dollar bills.

It makes me feel like I’m living in an absurd version of the past, like I’m forced to carry colonial scrip to buy a pack of gum. Down with the paper dollar!

When visited Europe I also enjoyed using coins when I would otherwise use bills for purchases in the US.

And I disagree with the argument that coins are more cumbersome than bills… I’d much rather have 10 quarter-size $1 coins in my pocket than 10 5 year old wrinkly scraggly $1 bills that are hard to even fit neatly in your wallet. :)

-Matt

Every month I get 200 one dollar bills to spread out for my monthly misc. cash budget (done by the week). I would hate to think about lugging 200 one dollar coins out of the bank every month and they would be cumbersome to store. Right now I file my cash away in weekly divisions. Also, the penny is great for me! I never spend change and each week and half I have a new roll of pennies to deposit into my savings account. That is fifty more cents than I had before!

That would completely change the atmosphere and costumes of gentlemen and ladies clubs. I guess they could put a wishing well on the stage.

More coins…. yuck. But, since we’re going plastic anyway, why not add another coin.

I guess because the dollar isnt worth a dollar anymore that it would make sense to be done with it and that of the penny. i for one dont have a problem using pennies or a dollar. still remember when i could actually buy a slice of pizza for a dollar. maybe if it werent for inflation the penny and 1 dollar would still have relevance. i guess since our money is fiat given money supply must continue to expand in order to finance intrest debt interest payments on the debt by which it is issued.

I’ve lived in Japan (via the US) for about four months now. Some people have already mentioned a few things about it, but I love their cash system compared with the US. Yeah, the coins add up really fast, but that’s also great for saving. In fact, in the four months I’ve lived here, the change jar that I started on the first week I lived here already totals around $120 (USD) last time I did a rough count (which was a while ago, honestly; it’s probably increased at least 50% since then). Not bad for something most people consider disposable.

But I’m also willing to acknowledge that the cultures are different. Many people get around by bike and public transportation in Japan. As a result of that, many people, even men (including me), carry bags to lug things around, meaning we’re stuffing change in the bags rather than in our pockets, which makes it a lot less of a hassle to carry around and use. Given that the change here is more useful in a normal persons everyday life (transportation, vending machines, ramen restaurants, etc), and we’re carrying it around in a more efficient way, it works really well for the culture.

As long as the US can increase the usefulness of larger coins in more aspects of life (and maybe also when people get over the taboo of men carrying a bag ;)), it should work well for them, too. Plus, if it’s less expensive to produce, why the hell not?

The information about the cost of producing a penny isn’t accurate anymore… Check out:
http://www.coinflation.com/
Currently, the metal value of a zinc penny is $0.0069.
On the other hand, the metal value of a nickle is more than five cents…

Coins are heavy, noisy and seem to spend a lot easier than paper money. I hate using dollar coins for that reason and I hope we never switch totally.

One time, someone paid my dad in all Susan B. Anthony dollars (~$30). He put them in his coat pocket and forgot about them. Later, he went to buy something and thought they were quarters and spent them all on fast food. Money that all looks and feels the same is easy to confuse and throw away needlessly.

Ditch the penny and the dollar bill! Pennies are already ridiculous. I don’t use them. When I get them in change, I either dump them in the “take a penny” cup or they go home to live in my change jar until they get traded in on something useful. And dollar bills are fragile and take up too much space. I’d much rather use dollar coins that I can rely on a machine to accept the first time than a crumbly old dollar I’ll have to try and feed in five times before I get it flat enough for the scanner to read.

There is a slight adjustment to be made, though, I admit. Very slight, about two days. When I’m in the UK, my first grab is always for my wallet to pay for something with a bill. Then I get fretful because I’m running out of cash, only to go home and find £10 in my pocket from the change I’ve gotten. It’s much more fun to find £10 than it is $1.82! Pound coins are easily distinguished from all the rest from their heft, it’s very easy to use them, it just takes me a few days to remember. :)

And, Canadian dollar coins have clever nicknames! None of our coins have monikers. I want a loonie and a toonie! A friend of mine campaigned to call the Sacajawea dollars “sackies,” but I don’t think it caught on. ;)

It’s amazing that some people still believe the same old myths about dollar coins. Gosh, did anyone believe in 1970 that having a 25¢ bill would be a good idea? “Wow, those quarters are so heavy, we should have a bill worth 25¢!” Sounds absurd, doesn’t it? The dollar in 2010 is worth less than a quarter from 1970, so why are we still using a bill with such little value?

Coins are more convenient and faster for small purchases. Every other industrialized country in the world has figured this out and are enjoying more convenience and saving money. Why can’t we figure this out in the US?

If we eliminated the penny and dollar bill, people would have _less_ weight in their pockets, not more. This is because people would be more likely to _spend_ their change, not hoard it.

Just get rid of the dollar bill and people will realize how convenient dollar coins are.

Paul

@andyg8180:

“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…”

You make a lot of 3-cent purchases, do you Andy?

Let’s get real. We’re not talking about 3-cent purchases here. We’re talking about $54.93 purchases. In this case, yes, it would round up to $54.95, and you’d pay 2 cents extra. That represents an increase of 0.04%. Are you really worried about the price of things increasing by 4 100th’s of a percent? Inflation will do that anyway in about a week (assuming 2.5% per year).

I researched dollar coins for a public speaking class I took in college 10 years ago. I wish I still had that report because I remember the pros outweighed the cons by a huge margin. I would love to switch to coins because dollar bills are always so messed up they don’t work in vending machines. And that’s probably the only time I use cash. Unfortunately a decade later we’re no closer to switching.

@Jeff:

“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.”

You’re forgetting about the secondary metal market.

If the inherent value of the raw materials in a penny are worth more than the penny as a currency, then what’s to stop people from buying $50,000 worth of pennies from a bank, melting it down into its constituent raw metal components, and selling the copper to a scrap dealer for $60,000? It’d be a pretty easy way to make $10,000. For the record, copper has been getting more and more valuable in recent years.

What do you suppose might happen to the Treasury if large numbers of people started figuring out they could profit in this way?

It’s crucial that all currency have more value as currency than as raw materials.

Thanks, Kevin for comments 88 and 89, that’s exactly what I was going to say.

Ditching the dollar bill would be the equivalent of stop using plastic to pay for things. Dollar bills are just more convenient to carry than coins, just like plastic is much more convenient that bills. Americans like convenience… and we’re willing to pay for it.

At least that’s my opinion….

A scan of the 100 or so blogs show a vastly differed opinion as to if coin or paper is preferable: certainly everyone has their personal preference. The main issue with pennies is simle: if it takes 1.7 cents to produce a 1 cent coin, a claculator is not really necessary to determine if it makes sense. Additionally, in today’s economy, the 1 cent penny is virtually valueless. What we need is for the world to follow the path of the Euro: find a way to have a universally usuable currency that can be taken from one country to another. Anyone who has done any international travel can identify with this problem…

No, I don’t think this will change. It’s too annoying. When I was in europe it was so annoying carrying all loose change around.

Kevin @ 92

A few years ago a guy actually did this. After a while they stopped him by simply making it illegal. Effective in his case, but I don’t see how that fixes the issue in the long run.

John @ 80

The value of the raw materials will, of course, fluctuate with the market. But the cost of manufacturing a penny is only partially in the raw material. The 1.7c estimate is, i believe, for labor and facilities as well as raw material. I’m sure that number is obsolete, but probably not terribly far off.

The penny isn’t going away because of who is on it: Abraham Lincoln.

Since he is regarded as the greatest president in America, any attempt at removing him could easily cost an elected official’s seat.

The same holds true for the dollar as well with George Washington, and the government is probably loathed to put his face on another coin (as he is on the quarter and 50 cent piece I think).

@Kevin #92, http://www.getrichslowly.org/blog/?p=8158#comment-217196

It says the cost to make pennies is 1.7 cents. No one ever said the actual copper was worth more than the penny. And even if it was, would it be worth the cost to obtain massive amounts of pennies, melt them down, and sell them to a factory? Of course not.

I think the Euro’s biggest faults (except for basing it on a base-10 number system) are the 1€ and 2€ coins, so don’t copy that idea. My wallet gets so heavy and full, bills are much better. I don’t say the coins should be abolished, but supplemented with 1€ and 2€ bills. Back when we had Schillings in Austria, we also had 20 ATS bills and coins, so why not (although the latter were quite rare)?

I am living in Germany. The smallest Euro bill is 5 Euros and although I never experienced it the other way around I think our system sucks!
I am all for ditching the pennies or cents here but

I would also love to see a 1 Euro bill!!!

The change is hard to track, its heavy, its not very convenient to handle when you have the stuff in your hands.
When I leave my apartment I usually clear my pockets of all the change, I only take 1 to 4 of the bigger coins with me (2,1 Euro and 50 cent coins). The rest I throw in a box which is so heavy you can only lift it with two hands. This box has been sitting there for years, everybody has such a box. I even know people that throw their smaller change away. Stupid x.99, x.95 prices are to blame.
All those penny graveyards, the copper could really be put to better use.

What exactly was the advantage of coins again?

I guess I will chime in on my aspect here. Time to cancel out of some of the “problems” I see mentioned here.

1. If the coins really are “so heavy” then you most likely will spend them first. You have to adapt and laziness is not an excuse!
2. Vending machines will quickly be converted to accept dollar coins if bill ceased to exist tomorrow. Otherwise vending businesses will soon be out of business.
3. Using coins saves our tax dollars wasted on paper notes.
4. The women’s clothing market will adjust with pockets. If the need is there the sellers will adjust.
5. Cash drawers: use the old $1 slots for the coins. Solved. Pretty lame excuse to begin with. Plastic trays are cheap to produce.

The problem now is people have a choice. If the mint announced that all $1 bill printing will cease tomorrow then you will see a flood of coins in the marketplace.

People may gripe for a while and that’s just too bad. 6 months later you won’t hear much about it. At some point you have to do what makes fiscal sense.

Pennies are worthless and should have been gone long ago. Waste of time, money, and space!

Finally if you are still insistent on not using coins then your change jar will be worth a lot more when you roll it and take it to the bank!

– Foo

I must be one of the rare people who actually spends pennies. I follow the envelope system and trust me, I spend my pennies. With my budget already pretty limited, I happily use those pennies to get a little more. I would also happily get rid of my pennies they weigh down the envelope, making me feel like I have more than I do

As for the dollar coin, I’m of two minds. I carry a pouch for the envelopes. The only part that doesn’t stay in the pouch (usually) is my laundry quarters. Recently I’ve had about $5 in quarters in my pouch because I keep forgetting to move them over to the cup with the laundry quarters. My pouch has a noticeable difference in weight (quite a bit heavier). Yet I find dollar bills to be cumbersome and frustrating when I pull out a wad of cash only to find that most of what’s there are $1s…

I like the look of the Sacajewa coin and it’s a lot easier to differentiate it from a quarter. They don’t weigh more than a quarter does, but with the gold color I quickly know which is which! I have an uncle who works a side business at sci-fi/gaming conventions and only gives out Saca dollars as dollar change. Everyone always seemed happy with it, but I think it was more of a novelty thing.

“You’re forgetting about the secondary metal market.

If the inherent value of the raw materials in a penny are worth more than the penny as a currency…”

Sure, it costs more than one cent to *make* a penny, that value was not the total metal value therein.

Going to $1 coins and ditching the $1 bill would be great. Keep the $2 bill around though — it’s not like they get replaced at a high rate at all.

I don’t see the problem with using a $1 coin. I use them from time to time, it sucks how many cashiers scoff at them. It’s not like they are the giant Eisenhower dollar coins of the 1970s. My pockets and/or coin purse aren’t weighed down by the “gold” dollar coins!

They will last longer than paper dollar bills. Dollar coins would reduce the amount of money we spend on paper, and not clog up our wallets and pockets with old, wrinkled, soggy dollar bills that should have been shredded years ago.

The US needs to save money, it would save approx 600 million a year just by switching to a dollar coin and getting rid of the paper dollar bill once and for all.

As for a $2 coin, I don’t think that’s necessary, at least not now. The US still prints $2 bills….as of right now, it is a waste of money because so many Americans think they don’t make the $2 bill anymore, and should they come across one they save it thinking it’s worth more than two dollars.

The US should phase out the dollar bill, not go cold turkey. And use all the excess $2 bills sitting in vaults and drawers, and bring them into circulation.

That way someone would only be getting two $2 bills and one $1 coin for a $5 bill equivalent, and not have to lug around five $1 coins. Their pockets and wallets would be reduced by cutting the amount one $1 dollar bills in half with using more $2 bills.

Then, if people still don’t like $2 bills (you think they would, if they like paper money), then the gov’t phases it out and decides whether or not to make a $2 coin, or just leave it to $1 coins.

I’m also for getting rid of the penny. It’s time prices be rounded to the nearest nickle. I’m still divided on whether this should be before or after sales tax, because I know some businesses would round up, but other businesses such as grocery stores would round down. Instead of something being 19.99 it would be 19.95.

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If JD taught me ANYTHING these past few years, it’s that money management includes counting change — a little extra effort that goes a LONG WAY — for it’s saving that change (not spending extra money) that can help us build towards a more financially-stable and wealthy future.

@Adrian #120

Small change being spent so easily is a matter of attitude. If you think there is little value in all those coins you’ll treat them as such.

When I lived in Japan, whenever I got a 500 yen coin in change, I would make a point to not spend it, and then tossed it into a coin bowl. I ended up saving nearly 70,000 yen (about $750), that paid for a trip to Thailand. Not a shabby way of saving money!

Of course, back home in Canada, the $1 coins are used to pay for laundry, along with the quarters, so no more ‘free’ trips to Southeast Asia!

Earlier on one dollar was quite a decent amount of money, but today inflation has undermined the value of the one dollar and, as in all other countries, coins are for small value currencies.
One might argue that it makes sense to change the one dollar bill into a coin, but it’s also a sad reflection of the continuous government erosion of the value of peoples’ money. Unless you change your monetary system the one dollar bill probably will become a coin in the future. Later on it will happen to the 2 dollar bill, the 5 dollar etc. Just like it happened in many other countries where inflation has lead to coins with high numbers (not included countries with hyperinflation).

Inflation has eroded purchasing power significantly over the past 100 years, so converting to $1 (and even $2) coins is probably long overdue. They would last longer, and could be designed properly to be easily distinguishable from other coins.

I tend to try and give exact change for cash purchases, so my pockets wouldn’t get weighed down with dollar coins. For those that tend to collect change, just save it in a jar at home and cash it in periodically. If the experience of Canadians and Australians is representative, this old-fashioned savings method can be quite effective and “spare change” can add up to significant amounts.

As for vending machines, they would get converted to handle the new coins, although not without some grumbling from the owners.

As for the penny, it is definitely time to put it out to pasture. The Australian model of “rounding up/down” to the nearest 5 cents for cash purposes is an elegant solution. Since prices are rounded in both directions, on average you shouldn’t be any worse off.

JS

Pennies won’t go away until retailers stop trying to kid people that a $10 is really a dollar cheaper at $9.99. If they do go away, then we’ll all be paying $10 for goods marked $9.99, which at a penny per item could, over time, add up to a nice windfall for merchandisers and a nice rip-off for consumers.

Americans have had dollar coins in the past. People in my father’s generation were happy to see the silver dollar go, because it was heavy, bulky, and would wear a hole in a man’s pants pockets. The two reasons no one liked the Susan B. Anthony coin are a) few people want to carry a pocketful of nuisancey coins around and b) they’re so close in size to the quarter that it’s easy to accidentally pay for a 25-cent item with a dollar coin.

And we know very well that given a quarter-sized dollar, it will be a matter of…what? minutes? seconds?…before vending machine owners jack up the price of a can of sugar water to a dollar and then to two dollars. Another fine rip-off for the consumer.

Also, they’re junky. Those of us who remember when coins were made of silver and copper and were worth about their face value will not even bend over to pick up a penny, a nickel, or a dime, because a piece of base metal that goes “clunk!” instead of “ping!” when you drop it on the floor doesn’t feel like real money.

Our money is debased enough without giving us more cheesy coins to advertise it.

@ funny about money – in Australia we have plenty of things for sale for $9.99. If you bought three things for 9.99 you would actually pay 2c LESS, because the total would be $29.97, and would be rounded down to $29.95.
We have a LOT of things for $9.95, rather than $9.99 – same psychology, but with the added ‘it’s not being rounded up so I’m saving even more’ thing added in.

“The biggest draw-back is definitely strip clubs though and probably the best reason to keep low-currency bills.”

This is a personal finance blog, not a blog for losers who have to objectify women in order to feel better about themselves.

I bought a digital coin counter last week and have $88 so far this month. I usually average about $50 a month which I squirrel in my savings account at ING Bank. For me, having change is a necessity when you have to do laundry or park anywhere in downtown LA, Pasadena, Santa Monica or any city where parking is a revenue source (Sign of the apocalypse: a parking meter had takes credit cards). As for the penny, I doubt people are ready to have their sales tax raised in increments of 5%.

Not going to happen any time soon.

Penny’s are made of copper. The biggest copper producer in the US is Arizona. Arizona is represented in Congress by John McCain. The US Mint will never be allowed to get rid of the penny as McCain has too much clout as a senior senator.

My guess – 10 years after McCain retires we’ll get rid of penny and dollar bill.

With a $5 bill as your lowest denomination, and a $2 and $1 coin such as in Canada, the most amount of coinage you can get dollarwise in a transaction is 4 one dollar coins or at the least, two two dollar coins. This will not drastically weigh you down. I for one would rather have a couple coins you barely notice over a huge wad of dollar bills.

Interesting discussion! Regarding US coins: could we get rid of the one-cent, five-cent, and twenty-five cent coins and revise our pricing so that we start with zero and move up to .1 (a dime), .2 (two dimes), .3 (three dimes) etc, We would have coins with values of ten cents, twenty cents, fifty cents, one dollar, two dollars, five dollars, and so on. Any thoughts on how that would affect the overall ‘cost’ of things in the long run? Would we need a .05-cent value coin too as a buffer for rounding? I’m just wondering because we haven’t used a half-cent in ages yet nobody complains about that. How much inflation must there be before dealing in hundredths of a dollar becomes ridiculous? Don’t we have a quarter-dollar coin only because of the old Pieces of Eight and Two Bits–one bit being twelve and a half cents? And where are those fifty-cent coins I used to see often when I was a youngster in the sixties? I’m in favor of dollar coins and two-dollar coins simply because I’d rather have coins with some value weighing me down instead of useless pennies, nickles, and dimes. I do think, however, that the US government will remove dollar bills from circulation sooner than later–mainly because they didn’t bother to redesign the dollar bill and WE do all the discussing about it and THEY don’t. Now I must run to the CoinStar with a few hundred nickles and pennies that I can turn into something less cumbersome!