7: Pennies Might Be Dead, But Tracking Isn't!
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It was the end of an era here in the States recently. The end of the penny era that is. The last penny was minted at the Philadelphia mint. So, how does this lack of physical pennies affect how we budget today?
It was the end of an era here in the States recently. The end of the penny era that is. The last penny was minted at the Philadelphia mint. If you aren’t in the States, this may not seem like a big deal to you because I know you haven’t had a one cent coin in decades, but for some reason here in the States, we have been hanging onto them.
I remember when I was traveling in Australia and New Zealand over a decade ago and there were no pennies! Even then I wondered why we still had pennies in the US. Transactions were always rounded to the nearest five cents if you paid in cash. And honestly, it was so much simpler, not having to carry all of those one cent coins around! Although those countries do also have one and two dollar coins instead, which were hefty but I loved, so I guess there is that tradeoff!
Anyway, I often talk about picking up a penny in the parking lot and I’m always telling you to budget down to the penny. So, how does this lack of physical pennies affect how we budget today?
Honestly, it has absolutely no relevance.
And here is why: It’s still incredibly important to budget down to the penny, and it is so easy to do when you are using my favorite budgeting tool, YNAB (You Need A Budget)!
Think about it this way, one of the biggest obstacles I see my clients face is this thing called "mental accounting". That’s when you look at your checking account balance and think, "Oh, I have enough money to buy that shirt right now!" Then, a day or two later, BAM! You realize you forgot about a bill and now you're officially stressed out because you’ve already spent the money.
This is where the power of tracking to the penny comes in, whether or not that penny is sitting in your wallet. This is really all about intentionality and awareness so that you can get the clarity you are looking for.
If we are looking at this in terms of YNAB, tracking to the penny is really just following YNAB's first rule: Give Every Dollar a Job. We assign every single dollar—and every cent—a purpose, which helps us see exactly where our money is going and make intentional choices. I’ll link to a blog post of mine that talks about all four of YNAB’s original rules.
If you track a purchase that’s $14.99, for example, you are being specific. You are being intentional. You are looking at the exact number you need to assign to your Clothing category or your entertainment category. By being accurate, you are eliminating that financial stress and gaining clarity.
And honestly, the amount of purchases I make in cash these days is so close to zero, and that is simply because it’s easier to track in YNAB. Because I’m one of those nerds that wants to know where every single last penny is being spent. The software handles all those pennies for you automatically, so you don't even have to worry about rounding errors or physical change. You just approve the transaction and it’s done, right down to the last cent.
So, does this mean I will not be picking up a penny if I see it in the parking lot? Absolutely not! It might even be more relevant to pick up that penny now! I hear they might be good collectors items now! Look at it this way: Every single cent is a reminder that we are being intentional. We are choosing where to spend or save our money. It's a reminder that that penny is helping you make progress towards your biggest, wildest dreams. Because…those dreams are what money should be a tool for, rather than an obstacle.
So, go forth and budget to the penny, my friends! And if you want a step-by-step guide to mastering YNAB, check out my YNAB Made Easy. You will find the link in the show notes.
Until next time, keep creating that positive relationship with your money! Remember, your biggest, wildest dreams are within reach. Let’s make some money moves so that you too can start to experience financial freedom.
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