A Quarter Ain't Worth a Dime
Plus: penny trivia
Every once in a while here at The Sunday Morning Post, we need a palate cleanser. This is one of those weeks. Please come back next week for another installment on what has become an annual tradition: The Sunday Morning Post Thanksgiving piece.
A Quarter Ain’t Worth a Dime
For much of my youth, I collected quarters. I collected for volume, not rarity of the coin — the state and national park quarters weren’t a thing back then. It was not a bad pastime, at the time or in retrospect. I loved trying to find them in couch cushions or under tables. I would try to earn extras by reading books or doing extra chores. I would fill jars and boxes with quarters and hide them under my bed. And then as my quarter collection grew, I would do, basically, nothing with them.
To this day, I still have mountains of those quarters. The coins retain greater emotional and nostalgic value than the actual monetary value they represent. I can’t think of something I would buy that would give me more satisfaction than just having the quarters in the jars (which perhaps should trigger some type of psychological review or, at the very least, opens me up to accusations of hoarding, but here we are).
I was thinking about these quarters this week upon seeing the news that the Philadelphia Mint was pressing the last pennies that will hit circulation. It is, in many ways, a sad milestone. The Lincoln Penny is part of the iconography of the country itself, as recognizable as the Statue of Liberty or the White House. Quippy sayings like, “A penny saved is a penny earned,” and “Penny for your thoughts” are part of our national lingo. Pennies have been a part of youth fundraisers and coin drives for generations.
In Season 3, Episode 5 of The West Wing, the cast ponders the question of stopping production of the penny, ultimately deciding against it for political reasons, as the fictional Speaker of the House was from Illinois, “The Land of Lincoln,” and would never stand for it.
Unencumbered by such quaint political sensibilities as those debated by Sam Seaborn and Toby Ziegler on The West Wing, it was President Trump who announced this past February that penny production would be no more. The main reason? It costs just over three cents to make each penny, resulting in an immediate net loss to the country of two cents per penny.
There are also just the practical realities that the penny has, well, barely any purchasing power. Very few people carry coins around like they used to, and most people are content for their purchases to get rounded to the nearest five or ten cents, if not the nearest dollar. The last time I needed a penny for any practical purpose? To put it in one of those machines at the Museum of Science in Boston that squishes the penny into a MoS-branded dinosaur logo for my kids. My 11-year-old also likes to find pennies because he thinks the old ones (to him, anything pressed before 1979) might be worth something (most are not).
The Vanishing Quarter
As someone who thinks every week about things like inflation, economic trends, and the value of a dollar, even I was surprised to research the purchasing power of a quarter today versus a quarter thirty-five years ago in 1990. Sure, 25 cents is 25 cents, but it is the value of the 25 cents that has declined. Look at it this way: in 1990, a quarter could buy 25 cents worth of stuff in that year. But by 2025, that same quarter only has the purchasing power equivalent to about ten cents in 1990. In other words, you’d need about 2½ quarters in 2025 to buy what a single quarter could buy in 1990. Nominally the coin is still worth 25 cents. But due to inflation over the intervening 35 years, it does much less.
Pernicious inflation is beyond the scope of today’s article (remember: this is a palate cleanser, not a further depressive take on economic trends!), but it is worth a reminder that this is exactly why people should invest their money in something rather than store it in jars under their bed. The stock market, treasury bonds, CDs, a high-yield money market account: without putting your money into something that will achieve some growth, the opposite happens, and your dollars (or coins) actually lose value relative to their purchasing power.
Brother, Can You Spare a Dime?
The other way quarters (along with all other coins) have vanished is that people just don’t use coins much anymore. One primary reason is, of course, their declining purchasing power. But the world has also grown accustomed to what basically amounts to digital currency. We all carry cards around in our pocket that we insert, slide, and tap to transfer our money around, so who needs coins and paper bills, which can be easily lost, damaged, misplaced, or stolen.
My dad, a regular reader of The Sunday Morning Post, will say that the massive trend towards credit and debit cards has all been by design, as the corporations that control these types of things want people to spend as much as possible and to do so as easily as possible. True, it does feel a lot easier to spend without the friction of having to rummage through a wallet for the right dollar bills and then hand them to a cash register clerk and then wait for change. A huge amount of technological insight and investment over the years has been poured into making it as easy as possible to buy things online (e.g. Amazon’s 1-click purchasing button, “Buy Now” icons all over the page at Walmart and Target.com, etc.) Sometimes it feels shockingly simple to buy something online, and worrisomely so, and it’s all because they want to get you before the almost-immediate buyer’s remorse sets in.
The lack of any need to hold, sort, organize, and pass over paper bills and coins does make it more likely that people will spend more, of course, and that is what my dad is probably right about. The problem is even worse at casinos and sportsbooks like DraftKings, where the dollars often don’t even real. That is not coincidence, by the way, and the same basic technological principles that make you spend money at a casino (or on a gambling app) are at play through the big online retailers. And the extra kicker is when you spend more, you’re often doing it on a credit card, which adds even more costs (and profits) to those that built and operate these spending networks. So my dad is not wrong on any of that.
But the other perspective is that doing things faster and with fewer steps is just easier. And that’s what a lot of us want. We don’t want friction at the checkout line at the grocery store; we just want to swipe or tap and go and not stand there waiting for change. I’ve already expressed my love of quarters, but I actually don’t want to have to manage all of these coins in my pockets and cupholders and everywhere else they end up residing.
I do get sad sometimes for my old quarter collection. I suppose it would be more profitable and perhaps more interesting, too, to collect unique coins that might actually be worth more than a depreciating quarter. And I wish my kids could find more value in these random coins they find than they currently seem to. That’s the other kicker — with so few people actually paying for things in cash and coins, there are not as many coins around to be collected.
On the profitability and control question of digital spending in lieu of bills and coins, no one ever went broke making it faster and easier for people to do things. The trend towards cashless spending mirrors the larger trend of technology disrupting (in ways both positive and less positive) all the typical acts of everyday life, even something as ancient as exchanging payment for items or services, a tradition that goes back thousands if not tens of thousands of years. How lucky we are to live in such interesting times.
Ben Sprague lives and works in Bangor, Maine as a Senior V.P./Commercial Lending Officer for Damariscotta-based First National Bank. He previously worked as an investment advisor and graduated from Harvard University in 2006. Ben can be reached at ben.sprague@thefirst.com or bsprague1@gmail.com.
Penny Trivia!
Here are a few penny trivia questions you can test yourself on or do with your family. The questions range roughly from easiest to hardest to give everyone a chance. Answers below the penny!
What famous American president is pictured on the penny?
Which direction does this president face? To the right or to the left?
Most pre-1982 pennies were primarily made of this metal.
Most pennies made since 1982 have been made of this metal.
The majority of pennies have been minted in this U.S. city.
The second most U.S. pennies have been minted in this city, which often includes a “D” on the penny to signify where they were made.
What is the common estimate of how many pennies are in circulation today. A) 200 million B) 2 billion C) 200 billion or D) 2 trillion
What monument was featured on the back of the penny through 2009?
What country discontinued penny usage in 2012, with all purchases there now rounded to the nearest 5 cents?
What word is directly above Abraham Lincoln’s head on the penny?
Here are the trivia questions - with answers!
What famous American president is pictured on the penny?
Answer: Abraham Lincoln
Which direction does this president face? To the right or to the left?
Answer: Right (the penny is the only U.S. coin with the president facing right)
Most pre-1982 pennies were primarily made of this metal.
Answer: Copper
Most pennies made since 1982 have been made of this metal.
Answer: Zinc
The majority of pennies have been minted in this U.S. city.
Answer: Philadelphia
The second most U.S. pennies have been minted in this city, which often includes a “D” on the penny to signify them.
Answer: Denver
What is the common estimate of how many pennies are in circulation today. A) 200 million B) 2 billion C) 200 billion or D) 2 trillion
Answer: C) 200 billion (525 billion have been minted all time; economists estimate that roughly 200 billion remain in circulation).
What monument was featured on the back of the penny through 2009?
Answer: The Lincoln Memorial (it has since been replaced with the Union shield)
What country discontinued penny usage in 2012, with all purchases now rounded to the nearest 5 cents?
Answer: Canada
What word is directly above Abraham Lincoln’s head on the penny?
Answer: “We” from the phrase “In God We Trust.”
Have a great week, everybody!
Very interesting article - the one fallacy though is considering only the cost of minting the coin without factoring in the lifetime value of that same coin - "how long does it live" Levi's cost more but they last and wear better than KMart ones - what is the ROI?