Wondering what to do with pennies? Read on to learn how they are more powerful than you think!
When I was a teenager, I was super interested in finance. I devoured books about being frugal and saving up your money. I know, I was a bit of a weirdo. But, to me, it was fascinating!
I watched where my dollars went, but I also kept track of my change. I’d pick up the penny on the sidewalk. When I put it together with its friends, they added up to something.
Then I got married and had a pile of kids. As time went on, I became less concerned about saving money and more concerned about how to get some sleep.
In many ways, I was still very frugal. But I spent more time trying to save big chunks of money and less time worrying about what to do with pennies.
It’s not that I had forgotten the importance of small savings. But that season of life was too busy for worrying about what to do with pennies.
Deciding What To Do With Pennies
These days, I (thankfully) get the occasional full night of sleep! I’m ready to keep track of my pennies again.
But that doesn’t have to be as tedious as it sounds.
I think that generally, people realize that pennies do add up. When we are grocery shopping and we have a full cart, we are careful to choose the cereal that costs 50 cents less. Or the generic version of an item, because it saves us 10 cents.
We realize that when we are checking out, those small amounts of change will add up to a large amount of savings.
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What’s A Penny Really Worth?
I once read this interesting article about the value of one penny. In it, the author discusses a $10,000 loan at an 18% interest rate. That means that you’re making monthly payments of $150.
You would never pay the loan off, because you are only paying the interest on the loan. You’re never paying anything towards the principle.
But… if you add just one penny to that monthly payment, you will have it paid off in under 54 years.
Now, paying on a loan for 54 years sounds awful, but that’s missing the point. Consider how powerful one penny can be. It takes a loan from never, ever paid off (to infinity and beyond!) all the way down to 54 years. If you compare those two, it’s pretty amazing.
What’s the Point?
Well, every penny you pay towards debt is one less penny with interest compounded on it. Those few pennies you’re spending to supersize your meal could instead be turned into a powerful repayment plan.
Instead of letting them leak away, why not put them to work for you instead?
Brace Yourself for Some Math
(Ok, I am not a big fan of math. You may be more ambivalent towards the subject.)
One night my husband asked our boys if they would rather have a million dollars or one penny doubled every day for a month. One of the boys immediately said he’d choose the million dollars, but the others knew there must be a trick here.
Aha, there is a trick! That wimpy little penny turns out to be pretty powerful.
If you were smart enough to choose the penny doubled, you’d have a tidy sum of $10,737,418.24 in the end.
And you were going to settle for $1,000,000!
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This chart isn’t something any of us have access to, but it is a fun way to consider the power of interest. And if you want to teach this lesson to your kids, this book is a fun way to help children understand this concept.
Pennies In the Real World
Just in case you never face a tough situation like having to choose between a million dollars and a penny doubled over a month (although if you have experienced that, please tell me your story!), let’s talk about how this applies in the real world.
When you’re faced with a mountain of debt, it’s easy to be discouraged. It might feel like you will be paying on debt for the rest of your life.
Instead of feeding those thoughts and emotions, remember that every penny you can find to send towards your bills is another tiny step towards being out of the bonds of debt.
That means that choosing to not buy that bag of candy that you found on clearance for just 25 cents is really a victory in your debt payoff plan. Put that quarter with the others you saved by avoiding overdue fines or collecting change in your pocket instead of losing it in your car.
Enough of those pennies put together can become powerful.
And it isn’t just the pennies themselves, but the new mindset you’ve gained. Each small purchase you choose to make matters.
Some days, buying that candy bar is just another silly splurge. Putting that small amount of money towards debt instead will make you feel great.
Then, on the rough days when you really need that candy bar, it will taste sweeter knowing that you made the honest decision that it was worth your hard earned money.
Now you know what to do with pennies. Make them work for you!
These days, it’s easier to remember the power of a penny. Remember these stories when you’re tempted to leave those pennies on the ground!
If you like making pennies powerful, you’re gonna love seeing what your dollars will do! This chart is perfect for helping imperfect people save $1,000 in a year.
If you find a penny on the ground, do you usually pick it up?
I'm Jamie, and I want to help you afford a beautiful life with your family. 
I had never heard the penny doubled story before! Love it!! I found you via the Raising Homemakers link up. You have a new follower. Now I’m off to enjoy some more of your blog. 🙂
Yay! Thanks so much for the visit, and I hope you find this blog helpful and entertaining. 🙂
Since beginning my financial freedom journey, I’m much more conscience of the value of a penny and save them in a drawer when I see one. I also pick them up to add to my drawer savings.
That’s a great idea. I like keeping them in a mason jar so you can see them accumulate in there. Thanks for visiting!
I always remind myself, “Every little bit helps.” That’s certainly true of many things- exercise and money included!
This is awesome Jamie! Just goes to show do not get discouraged in your debt free endeavors because even a penny can be powerful! We pay an extra $1.40 on our house payment because I have to round up (odd numbers make me crazy)…but maybe it’s helping more than I think 🙂
I bet that if you google an amortization schedule that you’ll be surprised to find that it actually does make a difference. Especially spread across 30 years! I always round ours up, too.
The penny doubled bit always gets me – similar to the piece of rice on a chessboard math problem. The math adds up, but it just is kind of mind-boggling every time (I was more of a teach-me-the-formula kind of math person, because I was good at that…understanding really larger or really small concepts is not my skillset!). In reality, it’s easy to overlook a few cents here or there. But, a few cents here or there, even without being magically doubled, or interest being added to them, add up.
Think of it like couponing – you save forty cents with that coupon, and you save 60 cents if you buy three of something, and you already have a dollar. Especially if, you know, it’s something you would buy already, you’ve just added a dollar back into your pocket *and* gotten the things you need. Pennies are on a smaller scale than that, sure, and it takes longer to get it all added up, but the math is still there!
Jamie, I really needed this today. It was educational and eye opening, sure. But the ENCOURAGEMENT was what I took away! <3 I will chip my debt away one penny at a time if I have to.
ps. when I see a penny, I always pick it up!
I’m so glad! I really want this blog to be encouragement for all of us who struggle.
I love this. What an encouraging article challenging people to shift their thinking about debt, spending and saving.
Thanks so much! And thanks for visiting.
The only trick with saving pennies, is that you have to include them in your spending budget. I saved up pennies for a couple years, put them in rolls, and took them to the bank. The bank refused to take them! I had to find a way to convert them into larger change or bills. With over $30 in pennies, I wound up having to trade them at multiple gas stations!
Now I use pennies for my sons’ allowance. That way they don’t accumulate quite so much before being spent.
I can’t believe the bank wouldn’t take them! Isn’t that one of their main jobs? At least you found a good way to handle it.
Thanks for visiting!
That is odd a bank wouldn’t take them, especially being rolled, I know they won’t take unrolled coins, but I thought they took any rolled. Also a lot of stores have that machine (I can’t recall the name) but you just dump your change on it, it counts it, and gives a print out of how much change you put in it, and you take that to the register and get actual bills for it.
I love how you think! It’s the small ways we save that make a difference.
Love this! Every little bit counts, hooray for pennies!
This is a great tribute to the penny! They should hire you for penny PR. 🙂
I save my pennies in a piggy bank that’s placed in my apartment in a Feng Shui money area. They’re not earning interest, but the pig can hold a lot and I’ve had it for years. I don’t know what I’ll do with them when it fills up, but it’ll be fun to see how much I’ve saved!
haha! I should add a poem. “Ode to the Penny”
Those pennies might not be earning interest, but they’re doing better than if they were lost in the couch! It would be fun to see what’s there.
I collect piggy banks, from places where I have been. The pennies go in to wooden one with plexiglass sides, about the size of a dinner plate and about an inch and half wide. It hold $12 in pennies.
So many people say “don’t sweat the small stuff,” but sometimes the small stuff is where the victories are. I buy the cheaper cereal and skip the lattes most of the time. The pennies may seem to never feel like they add up when you’re paying down debt, but they add up quickly enough when you’re adding it if you aren’t careful.
I love this! I have to admit, I never really liked pennies that much because they always seem like a waste of space, but when you put it like this, they really do add up. Becoming more respectful of money is a good way to get better at finances!
That story is so good! I’ve never heard it before. That really does put things in perspective doesn’t it?
It certainly does for me! And it applies to so much in life. If you keep adding pennies, eventually you’ll have a whole pile. 🙂
Great math! I never knew that about adding a penny to your minimum balance. I have lots of fond memories of wrapping pennies and bringing them to the bank when I was little.
This is a GREAT post! It’s so true! I know people who throw pennies away! It makes my heart hurt because they seriously do add up!! Thanks for sharing on the Small Victories Sunday Linkup!
Thanks so much! Happy to share and thanks for hosting the linkup. 🙂
This is such an inspiring story! And, I think it can be applied to so many aspects of life. All the little things really do add up. When a task seems overwhelming, whether it is paying off debt or decluttering your life, it begins with just a small step. And small steps over time lead to striking transformations.
I am all about the baby steps! Completely agree. Thanks for the visit!
Wow! Who would have thought just adding a penny to the minimum payment would reduce your balance to eventually being paid off as compared to paying the minimum forever. While I am finished paying off debt, I tracked everything I was able to put into savings last year, and was very surprised at how quickly all the little amounts did add up in the year. I’m sharing this post, thanks Jamie!
Thanks so much for the share! I’m glad you found this inspiring. I definitely found those stories inspiring, too!
This is clutch! One thing I’ve definitely noted is that as our money situation has gotten better, we haven’t paid as much attention to the pennies to our own detriment. We still manage our cash well, but not nearly as analytically as when we didn’t have it. And we’ve lost a fair amount of pennies that way. We’re working on getting back on the horse.
What a great thing to think about. Thanks for sharing your link at Family Joy Blog Link Up Party. I hope we see you again.
Love the calculation about the penny doubled! If only it were so easy to double it. 🙂 This is a great reminder about how powerful even the smallest of savings can be. I definitely pick up every penny I see!
Agreed. I really want to run into the guy that offers that choice! haha
My hubby saw your penny doubled chart over my shoulder and said “if only pennies were that easy to double!” I think he kind of missed the point 😉 Such a good reminder of why I strive every week to pick the best priced items at the store and not grab whatever item is closest! Thanks for linking up with us at Welcome Home Wednesdays last week… we can’t wait to see you tomorrow morning!
No, I get it. It’s much simpler on paper than in real life, but isn’t everything? haha I consider it more of a visual reminder of keeping the penny mindset.
Thanks for hosting the link up!
Yes I pick up the penny. We live that close to the edge. The 54 year example really encouraged me to put the little I can toward my husband’s business debt.
I balance my checkbook online. Last year, I transferred the cents in my balance to my emergency fund account each time I balanced. Occasionally, I’d add a buck or two. I saved around $75 during the year!
That’s big!
Thank you for putting this in the forefront of my mind.
My husband closed his business and is looking for work.
Prayer is appreciated.
Blessings!
Laura
Harvest Lane Cottage
I’ll definitely send up some prayers for your family. I’m so glad that small changes have added up to big savings for you!
I love this! Thank you for the reminder. I’ll never get sick of the pennies doubled theory. Every penny truly does count!
Wow, you have definitely changed my mindset. Brilliant, thank you for sharing with #abitofeverything. It does make a lot of sense with your examples. A penny not spent is a penny saved indeed!
It’s a great visual reminder to be careful with spending all around. Thanks so much for sharing this!
I love this post. It’s so encouraging. I’m always trying to save up for things, reduce our debt and other outgoings and it’s nice to see that every little penny helps.
#abitofeverything
I’m so happy you found this encouraging! That’s always my goal. Have a great week!
Hi Jamie,
Loved your post & its makes a lot of common sense. I think your husband is a genius because I had never heard that story of the penny a day. We used to save all our change in a empty coffee container and every year and that what we used to go on vacation with. Our lives have changed drastically in the last few years so we no longer go vacations, but we still save our change & this year we plan to use it to buy a new Christmas next Christmas season since ours wasn’t working properly this past Christmas season.
Congratulations on being the feature on Our Simple Homestead blog hop and thanks for sharing your ideas. Sharing on social media.
Thank you so much! I’m glad you’ve found those ways to make your pennies work for you. I think it’s such a great idea to save them with a goal in mind. It’s fun to watch them climb the walls of the jar, isn’t it?
Did you all know that a penny has more than one cent worth of copper in it????
I’ve heard that before! That’s a great fact to add in here.
What is it they say about looking after the pennies and the pounds looking after themselves. Great post, we could all take heed of this #abitofeverything
This is such an informative post (as your other posts are too.) I loved this story. I’m definitely going to use it on my kids too. 😉 Let’s see how long it takes them to grasp the concept too.
A penny saved is a penny earned is one of my favorite sayings.
This is such a great post! The story is powerful and definitely defeats the “pennies are worthless” argument!
Such a great and interesting read! I had never heard the Penny Doubled Story. Love it. I am going to share this post over on my FB page!
Thanks so much for the share!
This was very inspiring Jamie! Thank you for sharing this on the Art of Home-Making Mondays at Strangers & Pilgrims on Earth! 🙂
I always pick up pennies! My late Mom always used the ‘see a penny, pick it up’ rhyme and it’s stuck with me. I had never seen the penny doubled thing before, that is fascinating. You definitely shared some great advice and encouragement in this post, Jamie. Stumbled and shared. Thank you for bringing this post to the Hearth and Soul Hop.
I love this…it’s not just about pennies, but about a whole mindset toward saving and spending. More people should think this way and change their approach to “mere” pennies! Thanks for sharing at the Manic Mondays blog hop!
For sure, it’s such a helpful mindset to reach your financial goals. Thanks for hosting the hop!
Great post…these are such good points! Thanks so much for joining us each week at Share The Wealth Sunday! I always love to see what you’re going to share next! xoxo
It’s true, they do add up. I started the penny challenge at the first of the year. Can’t wait to see how much I save, I’ve been adding whatever change I got that day to it. Thanks for sharing! I found you at Turn it up Tuesdays.
Great insight! I have a jar that I keep my spare change in. It’s easy to drop my loose change in there and forget about it. Last time I actually sat down and rolled all of that change, I had close to $80! It definitely adds up.
Thanks for sharing on the Homestead Blog Hop
In German there’s a saying “Who doesn’t value the penny, will not see the big coins” . It’s something like that translated…Anyways, it’s so true! I never thought about it your way! Great stuff! Thank you!
I’d never heard that saying (not that I know much…or any! German haha). That’s really interesting!
Such a great informative read! There is so much value in a penny!
I love a woman who is wise with her money. Thanks for your story and sharing on#overthemoon
From infinity to 54 years?? That’s amazing. I always thought money started with nickels, but my perspective has changed! Thank you for the insight. 🙂
Our house payment went down this year and I am going to pay the difference toward the principle since we are used to paying that amount anyways! After reading this, that is what I am going to start doing. Thanks!
Wonderful! If you think about the number of payments a person typically pays on a mortgage, those extra pennies can make a serious difference in the long run.
Reminds me of one of my mom’s favorite sayings. If you take care of the pennies, the dollars will take care of themselves. She was a very wise lady.
She sounds very wise! I have certainly found that to be true.