The penny, a tiny coin that’s been part of American life for over 200 years, is on its way out. The U.S. Treasury recently announced it will stop minting new pennies in early 2026, as it costs nearly four cents to make each one-cent coin. This decision could save millions of dollars each year and change how we shop, pay, and think about small change. With over 114 billion pennies already out there, what does this mean for your wallet and the economy? Let’s break it down.
A Coin That Costs Too Much
The penny has been around since 1793, but making it has become a money-losing deal. In 2024, the U.S. Mint spent about 3.69 cents to produce each penny, leading to an $85.3 million loss on the 3.2 billion pennies made that year. Over the past decade, production costs have jumped from 1.3 cents per penny, driven by rising prices for zinc and copper. By stopping penny production, the Treasury expects to save $56 million annually in material costs alone. Other countries like Canada, Australia, and New Zealand have already ditched their lowest-value coins, and the U.S. is now following suit.
Why Now?
Talk about ending the penny isn’t new, but it gained traction in 2025 when President Donald Trump and Elon Musk’s Department of Government Efficiency pushed for it, calling the penny “wasteful.” With digital payments like credit cards and apps taking over, fewer people use cash, and pennies often end up in jars or under couch cushions. A 2022 Federal Reserve report found that 60% of coins, worth $14 billion, sit unused. Coinstar’s CEO noted that billions of coins are “stuck” in the system, meaning we don’t need to make more. This makes the penny an easy target for cost-cutting.
What Happens to Prices?
Without new pennies, businesses will round cash transactions to the nearest five cents, like Canada did after ending its penny in 2013. Here’s how it might work:
| Total Amount | Rounded To |
|---|---|
| $1.01 or $1.02 | $1.00 |
| $1.03 or $1.04 | $1.05 |
Some worry rounding could nudge prices up slightly, but experts say it won’t cause big inflation. In Canada, rounding didn’t significantly affect costs, though cash-paying customers might notice small differences. Digital payments, which most Americans use, won’t be affected since they handle exact amounts. Businesses may also tweak pricing to avoid rounding up, keeping things fair for shoppers.
What’s Next for the Penny?
Pennies will still be legal tender, so you can use the ones you have. With 114 billion pennies in circulation, they won’t disappear quickly it could take decades. The U.S. Mint will stop ordering new penny blanks after its final batch runs out in 2026. Meanwhile, some lawmakers and economists are eyeing the nickel next, which costs 14 cents to make. Changing the nickel’s materials could help, but that’s a future debate. For now, the focus is on letting pennies fade away naturally.
A New Era for Small Change
Ending the penny marks a shift in how we view money in a digital age. It’s not just about saving $56 million a year it’s about moving past coins that don’t make sense anymore. While some joke about losing the chance to “give their two cents,” others see it as a smart step forward. Check your piggy banks and pockets; those pennies might not be worth much now, but they’re part of a disappearing piece of history. Keep an eye on stores and prices in 2026 to see how this change plays out.