The end of the penny era in the U.S. might seem irrelevant to modern budgeting, but I'm here to tell you why tracking down to the last cent is still vital for gaining financial clarity and eliminating mental accounting.

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i have a short episode for you today.

maybe just a few pennies for my thoughts,

if you will. it was the end of an era

here in the united states recently.

the end of the penny era, that is.

the last penny was recently minted at the philadelphia mint.

if you are not in the states, this may not seem like a big deal

to you because i know you haven't had 1¢ coins in decades.

or a lot of countries haven't had 1¢ coins in decades.

but for some reason, here in the states,

we have been hanging on to them. i actually remember when i was

traveling in australia and new zealand,

oh my, over a decade ago, and there were no pennies.

even then, i wondered, why do we still have pennies in the us?

transactions were always rounded to the nearest 5¢ if you paid in

cash. and honestly, it was so much simpler.

not having to carry all of those 1¢ coins around.

though, those countries do also have 1 and $2 coins instead,

which were hefty, but i also loved them.

so i guess there is that trade off.

anyway, i talk about picking up a penny in the parking lot all the

time, and i'm always telling you to budget down to the penny.

so how does this lack of physical pennies affect how we budget

today? drum roll. honestly, it has absolutely no

relevance. and here's why. it is still incredibly

important to budget down to the penny,

but it is so easy to do so when you are using my favorite

budgeting tool, ynab. think about it this way.

one of the biggest obstacles i see my clients face is this thing

called mental accounting. right? that is where you're looking at

your checking account balance and thinking,

oh, i have plenty of money to buy that shirt right now.

but then a day or two later, whoops,

you realize you forgot about a bill and now you're officially

stressed out out because you've already spent that money.

this is where the power of tracking to the penny comes in.

whether or not that penny is sitting in your wallet.

this is really all about intentionality and awareness so

that you can get the clarity you are looking for.

if we are looking at this in terms of ynab,

tracking to the penny is really just following ynab's first rule.

give every dollar a job. we assign every single dollar,

yes, and every single cent, a purpose,

which helps us see exactly where our money is going and make

intentional choices. i will go ahead and link to a blog post of

mine that talks about all four of ynab's original rules.

they have since shifted to questions to ask yourself,

which feels a little cozier than rules.

right? anyway, so if you track a purchase

that's $14.99, for example, you are being

specific. you are being intentional.

you are looking at the exact number you need to assign to your

clothing category or your entertainment category.

by being accurate, you are eliminating that financial stress

and gaining financial clarity. and

honestly, the amount of purchases i make in cash these days is so

close to zero and that is simply because it's so much easier to

track in ynab when the transaction gets imported

directly from a card. but, you know,

because i'm one of those budget nerds that wants to know where

every single last penny is spent, it makes it easy.

the software handles all of those pennies for you.

so you don't even have to worry about rounding errors or carrying

physical change. you just approve the transaction and it's done.

right down to the last cent. so does this mean i will

not be picking up a penny if i see it in the parking lot?

heck no. absolutely not. it might be even more relevant

to pick up that penny now. i hear they might be good collector's

items now. look at it this way. every single cent

is a reminder that we are being intentional.

we are choosing where to spend or save our money.

it's a reminder that that penny is helping you make progress

towards your biggest wildest dreams because,

remember, those dreams are what money should be a tool for rather

than an obstacle. so go forth and budget to the

penny, my friends. and if you want a step by step guide to

setting up and mastering your own ynab,

check out my course, ynab made easy.

you'll find that link in the show notes.

until next time, keep creating that positive relationship with

your money. because remember, your biggest wildest dreams

are within reach. let's go make some money moves so that you too

can start to experience financial freedom.