In the last federal budget, the Conservative government announced that it was doing away with the pennies. I jumped for joy and was, once again, proud of my country’s monetary policies.
In the intervening months however, the general public have gone nuts about three main misconceptions over the abolition of the penny. Here are the three most common things that I’ve heard:
1- We have to use all our pennies because they will be worthless soon: A penny is a penny is a penny. It is a value of currency that will be worth exactly $0.01 until legislated otherwise. Saying that the penny will be worthless soon is like saying that we can’t use our $1 and $2 bills — or $0.50 coins — or old coinage. While it is admirable to donate your pennies to charity, why?
Also, this “news” story that circulates about how The Mint will “continue to accept pennies from stores” is ridiculous! It’s money! You will be able to go to the store, the bank etc. and use your pennies. They are still money.
2- Electronic transactions will still be to the penny: If your transaction comes to $4.57 and you pay by debit/credit, you will be charged $4.57. If you pay with cash, you’ll pay $4.55.
3- You will not be ripped off (ok, maybe you will be…): A common thing that I hear is that, once the penny is abolished, stores will round up their prices to take advantage of the situation. Ok, so that might happen. And you know what? It’s a penny. Is it worth it to continue minting coins which cost 160% of their value? Plus, like when the UK decimalized, there will always be people who take advantage of coinage changes from which they can profit.
So. Amsterdam has no penny and they’re fine; Australia has plastic money and no penny and they’re fine. Canada will be fine. Chill.
If you enjoyed this article, please consider sharing it!
The charity push is a convenient way to expedite taking pennies out of circulation, that’s all.
It’s the inflation bump that I’m not stoked about, as retailers have to reprogram, so prices are more likely to change as a result. The introduction of the euro saw a lot of that. The switch back to PST in BC is really something to be sad about though!!!
Anne @ Unique Gifter recently posted..eBay Savings Tips
I thought the charity push was a clever way to take advantage of a changing situation. Change drives have always seemed like a smart fundraiser in my opinion though – take something people put little value on in small quantities, and accumulate it in large quantities.
Alex recently posted..Happiness Experiment 38: Nasal Strips Update
Interesting. Now, if we can only get your neighbors to the south to do the same thing. But, I am sure there’s some way that our government would mess it up.
John S @ Frugal Rules recently posted..Even More Blogging Tips From a Beginner
It bugs me when people spas over things that really aren’t a big deal. Thanks for dispelling the myths!
Jordann @ My Alternate Life recently posted..Lump Sum Payment or Structured Settlement? ($1000 Giveaway!)
I’m happy about this. I loathe those things, even though I pick them up ALL THE TIME. Money is still money. I should be able to change it if I have too much.
Mochi and Macarons recently posted..Budgeting like a freelancer: Set yearly amounts and save the rest
I’d love to see the States do this. The only explanation I hear for it is corporations would be fearing of losing too much due to rounding. But don’t they stand to gain if they’re the ones to control how they round? AND if they still charge exactly when transacting electronically?
Todd @ FearlessMen recently posted..Running for the Injured Man—How Barefoot Running Techniques Turned My Body Around
I absolutely hate pennies and never use them… actually I don’t even use nickels for that matter lol…. I have this big bucket with about 10 years worth. I think getting rid of them is a great idea!
Dustin Small recently posted..Peter Lynch Fair Value
[...] So Canada is Getting Rid of the Penny? Big Deal! [...]
They’ve been talking about this for a while now. I doubt we’ll miss it.
[...] at Vanessa’s Money writes a great post about why getting rid of the penny will change pretty much nothing about your day to day [...]
I’m sure there was a big freak out when the twoonie was introduced, just as there is a huge freak out about anything changing, ever. It’s going to be fine.
Daisy @ Add Vodka recently posted..Extra Income Goal – January ($1,187)
I’ve never really understood why the US had kept pennies. They are a pain in the rear if you ask me. I hope someday we’ll get rid of them. Most people don’t even bother to pick up a penny these days they’re so basically worthless. Good move Canada!
KK @ Student Debt Survivor recently posted..Embarrassed to Drive a Used “Beater” Car? I’m Not!
[...] Vanessa’s Money-So Canada’s Getting Rid of the Penny? Big Deal [...]
I would be happy if we eliminated cash entirely. My sons are too old for the tooth fairy and that is the only reason I can think of the have coins.
The new loonies and twonies don’t work in a lot of the new parking lot metres.
The only thing I do with cash is pay in to my work lottery pool and tip at restaurants and the occasional tea at Tim Horton’s.
Jane Savers @ The Money Puzzle recently posted..Waching TV Is Not a Financial Crime (I think)
[...] So Canada’s getting rid of the penny? Big deal by Vane$$a’s Money [...]
[...] So Canada is Getting Rid of the Penny? Big Deal! [...]