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If you walked into a grocery store today and saw a single penny on the ground... 

 

 

Be honest. 

 

For most people, the answer is no. A penny isn't worth the effort of bending down. It can't buy anything. It costs more to produce than it's worth. In a world where most people just tap their phones to pay, the very idea of fumbling with coins feels ancient.

 

President Trump agrees; in February, he announced that he had directed the U.S. Treasury to end the production of pennies (citing their high production cost and limited utility), which officially pressed its last penny on Nov. 12. According to the U.S. Mint's annual report, each penny costs 3.69 cents to produce, making it more of a burden than a benefit. 

 

But the real story here isn't about the penny itself... it's about what killed it — inflation.

Financially, this move makes sense — but it still feels like the end of an era. For more than 200 years, the penny has been part of daily life, tossed into tip jars, wedged between couch cushions, and lining the bottoms of junk drawers. But soon, that will all be in the past.

 

And while the penny's departure might not disrupt your daily routine, it serves as a stark reminder of a larger issue at hand... inflation, or the rise in prices over time. When the cost of things like groceries, rent, and gas is going up year after year, that's inflation. And it's not just about one or two items — it's when prices across the board start creeping up.

 

The same force that rendered the penny nearly worthless is quietly eroding the value of the money in your wallet.

 

Now, as frustrating as rising prices are, inflation itself isn't inherently bad. In fact, the Federal Reserve actually aims for an annual inflation rate of around 2% — a level that encourages economic growth without causing too much strain on consumers. But when inflation spirals out of control — like in 2022 when it hit 9.1% — it becomes a real problem. That's when the cost of living starts rising faster than wages, making everything feel more expensive.

 

There are several reasons why inflation spikes: too much demand and not enough supply (remember all those supply chain issues during the pandemic?), businesses raising prices to cover higher wages or materials, or simply natural economic cycles. And the penny's demise is just a natural symptom of inflation's long-term effects. As prices rise, smaller denominations of currency become less useful. Just like the nickel and dime have lost much of their purchasing power over the decades, the penny has simply reached the point where it no longer makes financial sense to produce.

 

While it may be big news this month as more stores follow the donut shop’s lead, the penny's disappearance will eventually be just another footnote in history. But what it represents — a warning about the eroding value of money — is a story you can't afford to ignore.

Regardless of what's causing inflation, if your money isn't growing at the same rate or faster, you're effectively losing purchasing power every year. That's because as inflation pushes prices higher, each dollar stretches less. If your income or savings don't keep up with rising costs, you're effectively earning less in real terms.

 

Inflation can feel like an invisible force quietly eating away at your financial security. If your money is sitting idle, it's losing value year after year. But there are steps you can take to ensure inflation doesn't erode your lifestyle.

 

 

A regular checking or savings account typically earns next to nothing in interest, which means your money is losing value over time. A high-yield savings account (HYSA) can offer interest rates of 4% to 5%, helping to offset inflation's impact. While it won't make you rich, it's an easy way to earn passive income and preserve more of your cash's value.

 

 

Historically, stocks have provided returns of about 7% after inflation, making them one of the best long-term tools for wealth preservation. Diversifying your investments across stocks, index funds, real estate, and other appreciating assets can help ensure your money grows faster than inflation. And it doesn't take much to start investing. Even $50 is enough to get started.

 

 

Treasury Inflation-Protected Securities (TIPS) are government bonds specifically designed to keep pace with inflation. They adjust in value as inflation rises, providing a built-in safeguard for your money. If you're looking for a low-risk way to protect your savings, TIPS can be a smart addition to your portfolio.

 

 

If inflation is making everything more expensive, take a proactive approach and start looking for ways to lower your fixed costs when possible. This could mean refinancing a mortgage at a lower rate, negotiating bills, or switching service providers to lock in better rates before prices get even more expensive.

 

 

If wages aren't keeping up with inflation, finding ways to boost your income can help bridge the gap. This might mean negotiating a raise, developing new skills, or starting a side hustle. The goal is to ensure that your earnings are growing at a pace that keeps up with or exceeds inflation.

The unfortunate reality is that prices will continue to rise over time. And honestly, there's not much most of us can do to stop or even slow that evolution.

 

The key is to make sure your financial strategy evolves along with it. By proactively managing your savings, investing wisely, and finding ways to grow your income, you can stay ahead of inflation rather than being at its mercy.

 

At the end of the day, the death of the penny is a symbolic reminder that money changes over time. But the real question isn't what happens when the penny disappears — it's how you make sure your wealth doesn't.