“See a penny, pick it up, all the day you’ll have good luck!”

Despite being worth next to nothing, pennies are considered good for your luck and wealth. Even in today’s time, many people believe that picking up a penny when you spot one can be beneficial for you in some way or the other. Others still religiously save loose change in a piggy-bank.

If a penny, or a rupee coin, might not even fetch you a premium quality candy in today’s time then why do some people advocate spending your time collecting them? Is this age-old concept relevant even in today’s time? Could collecting loose change benefit you in the short or long term at all? Similarly, is it worth saving all the time, no matter the amount?

Let’s explore all these aspects and take a look at what various schools of thought consider effective.

The Concept of Picking Up Pennies

A common saying goes “Look after the pennies, and the pounds will take care of themselves.” This saying essentially means that if one will look after the small amount of money and prevent wastage they will end up accumulating a big capital over time. A person who grew up in the ’80s would attach emotional value to pennies and the 90’s kids would reminisce the number of things a rupee coin would buy them. But those born in this century might not believe low denomination coins used to hold any relevant purchasing power.

But, what happens to pennies if they fall off on the ground, left forgotten into the creases of your couch or kept hidden in old handbags?  While the concept of picking up pennies might sound metaphorical, it is not. It simply asks you to pick up a stray penny when you spot one. Some people believe that this habit could help one add more financial value to their lives. But, it’s been observed that most people do not bother bending down to pick up coins, assuming it’s not worth their time or effort. In reality, they have just forgotten that one small coin is enough to start a much bigger change.

How this Concept is being Challenged? 

Picking up pennies once used to be relevant in everyone’s life as pennies used to hold a lot more value. Now, since pennies have lost both, their value and glimmer, should one take extra time out to collect loose change or simply offload it at the first available chance?

The whole thought of challenging the habit of picking pennies came into light when the online blogging community started to question whether extraordinarily rich people like Bill Gates still pick up a penny when they see one. In other words, they wondered that while a penny could make a small difference in the life of a person earning minimum wage, do multi-billionaires also value pennies?

Regardless of Bill Gates’ opinion about picking up loose change, there are many different schools of thought that tell us to follow different practices. For example, some claim spending time to collect change, even for a few seconds, is not worth it for Bill Gates; he could earn much more by investing his time at work. There are two sides to every coin (pun intended) and others claim that perhaps it is worth it because any money you save, no matter what the amount, is money earned. So, whether you are Bill Gates or not, should you pick up pennies? Here are our two cents.

Should You Pick Up Pennies?

Picking up pennies has been regarded as a way to slowly increase your earnings over time and saving money with discipline. Here are a few things to keep in mind while deciding if picking up pennies is still worth it: 

  • Piggybank

The humble piggy bank dates back nearly 600 years, in a period when banks didn’t exist. Traditionally, piggy banks are pig-shaped terracotta boxes to store coins as a part of one’s personal saving goals. In today’s time, parents use piggy banks as a tool to teach their kids the importance of saving money. By dropping one coin at a time, one can accrue a relatively bigger sum by the time the piggy bank is full.

  • The worth of one rupee

A rupee can be considered the equivalent of a penny in India, for it has the lowest denomination. The worth of a rupee might not seem significant if you happen to find just one coin. But, over time if you end up storing, say a hundred coins of one rupee, in the piggy bank or a jar, you’ll end up gaining hundred rupees by just being mindful.

  • How to make it work

One penny (or a rupee coin) is all it takes to start a coin jar or developing the habit of storing money in a piggy bank. In order to save big, you may create a plan of dropping one coin a day in the jar; you could also take one of the many penny challenges available online; like dropping a penny every time you achieve a milestone or use a cuss word.

By the time you reach the final set date, you are guaranteed to save a few hundred rupees at least. The sum accumulated might not seem big but imagine saving the same amount every month and the final amount it will add up to, if you develop a habit of saving money, no matter how big or small. At the very least, you could buy a few small household items with these savings.

5 Sensible Ways to Save More Money 

Following the idea of ‘A penny saved is a penny earned’, we can conclude that saving and investing the money in hand is always more efficient than waiting for more money to accumulate. Much like sitting on the couch and waiting for a penny to appear or staring at sidewalks are unwise decisions, you must take action to ensure that your savings grow over time.

In order to make your money grow, you must start focusing on your spending habits and savings. Here are some ways to save more money:

  1. Track your expenses

Keeping track of your expenses helps determine how well you use your income. It also helps you identify unnecessary expenses and reduce them. Start by listing out your monthly bills, track out-of-pocket expenses, review them and eliminate unnecessary expenditures.

  1. Create a budget

Once you have tracked and calculated your expenses, go ahead and make a budget. An effective budget helps you stay on track by helping you plan and allocate your money to chores wisely. Following a budget also helps stay out of debt.

  1. Set savings goals

Goal-planning also helps manage and control one’s finances. In the absence of goals, it is possible to lose the motivation to save money in the long run. You must set a couple of short-term as well as long-term goals, open separate accounts for them and adhere to your plans of saving. 

  1. Pay off your credit cards 

If not paid on time, credit card bills can accrue up and create a heavy debt on your head, in addition to the penalties and fines. The simple solution is to pay each installment on time.

  1. Control impulsive buying decisions

More often than not, we end up spending money on wants rather than needs. While treating yourself every once in a while is fine, going overboard could cost you a lot of extra money. For example, treating yourself to an expensive latte mid-week is okay but doing it every other day could affect your savings.

Time Value of Money: What To Focus On?

The concept of the time value of money states that the amount of money you have in your hand today is worth more than the money you will earn in the future. This is owing to the simple reason that you can invest and utilize your current money to turn it into more money in the future. Whether you are lending money or investing it, your goal should be to get good returns in order to increase the value of your sum – even if it means parting ways with your money for a while.

In finance, the concept of the time value of money is regarded as one of the founding principles. It helps determine the net present value, internal rate of return and compound annual growth, etc of a firm or financial instrument.

This formula is also applied to the following:

  • Capital budgeting
  • Bond valuation
  • Stock valuation
  • Loan amortization
  • Investment decisions

Consumers, businessmen, as well as bankers, apply this concept to maximize the value of their money with time. The idea is to limit the cost of money and increase the returns on investment whether you are a lender or a borrower.

To put it simply, picking up just one penny or one coin would not impact your life in any way – whether you are Bill Gates or not. On the other hand, watching out for spare change and collecting it over a period of time will surely help you save small amounts of money – sans the need of putting in any effort. 

Now, coming to the big question – whether you should pick pennies or not. The answer differs from person to person. Whether you’d like to spend a few precious seconds of your time to collect loose change or pick a coin and put it into your pocket or not. Saving spare change won’t make you rich overnight. But, over a period of time, you can certainly save up a small amount with dedication and persistence.