Thursday, February 17, 2011

My Two Cents

I never expected anyone would ever read my blog, let alone go out of their way to tell other people about it! Yet it's happened a couple times this week. Thank you to The Asian Pear and Saving for Travel, I appreciate the shout outs. I feel all warm and fuzzy now :)

I picked up a couple pennies at the LRT station. One last night, one this morning. You can't actually buy anything with a penny anymore, I'm pretty sure that even penny candy is all five cents and up now (can you still get candy for a nickel?) Those of you in Canada probably remember the announcement back in December that the Bank of Canada is considering abolishing the penny due to the fact that inflation has eroded it's buying power to the point that it's nearly worthless. It costs more to produce them than their face value.

So why am I picking up a couple dirty coins on my way to the train? Other than because I always have?

Future value.

No, I'm not holding on to them in the hopes that they become rare items and make me a millionaire. They're going in my coin box, the one that goes towards my extra mortgage payment. Those two pennies will save me seven pennies over the life of my mortgage, and that's just assuming that my interest rate doesn't go up. If my rate after renewal went up to 6% and stayed there for the rest of the mortgage, those two pennies would save me about eleven cents. That's eleven cents I don't have to fritter away on my own.

Is seven, or even eleven, cents really going to make a difference on a two hundred and forty some-odd thousand dollar loan? Not really. But if I do it enough times it will. These pennies are my little snowflakes.

Hence the coin jar.

It doesn't take any time, and it doesn't cost anything, so why not?


Daisy said...

I never thought of it that way!
I wonder what will come of this whole getting rid of the penny idea..

Cassie said...

I'm expecting it will happen, though there will be a lot more deliberation before it actually happens. I've worked in a penniless system before. It can be frustrating, but it does work.

target10mil said...

I could see them stop producing the physical penny coins. But the penny as a financial value will never go away.

Some companies make their money by being a middle man in a transaction and might only making a penny (or less!) per transaction. But they might do 10 million transactions in a day. The perfect example of this is high frequency trading where something the profit is only hundredths of a penny. So while the physical coin might go away, the abstract financial value never will.

But like you, I still grab pennies off the street if I find them haha

Cassie said...

Very true target10mil, there's a couple ways they could deal with getting rid of the actual penny though. Some countries take the price and round it up or down to the nearest coin denomination depending on the last cent value of whatever you're paying for. Other countries just automatically round the price up. I'm not sure if they would do the rounding for debit/credit transactions though.

Anonymous said...

I have been doing it and transferring money to my car payment. Last month I made a total of 19.66 in extra car payment. Is it a whole lot? Well know but it putts me 19.00 closer to having it paid off.

I think it's a great way to make little dents in our debts


Sandy @ yesiamcheap said...

Sweetheart, keep picking up those pennies. Until they are abolished 100 of those Lincolns equals one dollar so every penny counts.

The Asian Pear said...

I'd pick up the pennies too. I don't understand why people don't. Money is money.

Cassie said...

@Judy - WOW! Nicely done on the extra car payment. It's been quite a while since I've picked up that much loose change in a month.

@The Asian Pear/Sandy - I agree completely :)