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The Curious Case of the Missing Coins

When my boys were toddlers I tried to teach them the value of money and importance of saving. So I gave them each a piggybank. Now that I’m a grandpa I’m doing it again. I’ve always maintained that saving a little change here and there can eventually add up to a tidy sum. A piggy bank is the ultimate rainy day fund. But it’s a different world today.

During the pandemic there have been many shortages. Some were genuinely difficult to find items, like facemasks. Other shortages were driven by fear and hoarding. The scarcity of toilet paper comes to mind. Supermarket shelves were out of toilet paper within minutes of being stocked. If you still have enough on your shelf to last through next winter, I think it’s safe to say you’re hoarding. 

There’s currently another nationwide shortage that people are starting to realize and I’m a bit surprised by it. It’s a shortage of coins.

It hit me in mid July when I cashed a small check at a local bank’s drive-though. The teller asked if it was ok to credit the 32 cents into my savings account because they were short of coins.

I’ve since learned that, for the same reason, local businesses like Meijer will only take credit cards at self checkouts. At Kroger, if you re due change they ask if you can donate it to charity. The shortage has an increasing number of businesses encouraging customers to use credit cards.

According to the Federal Reserve, the entity in charge of our nation’s money supply, we have a severe shortage of coins. As a financial advisor, I don’t exactly agree. Because of COVID-19 a great number of people are staying home. So what we really have is a severe lack of coin circulation.

Yes, the U.S. Mint’s coin production has decreased, but there are more than $47 billion dollars of coins out there somewhere. Said another way, that’s $142 for every person in the country. I’m guessing much of that is hiding in jugs and buckets in people’s homes everywhere.

Early in the summer my wife asked me to take a few of our large blankets to the coin laundry. I had no problem locating nearly $20 worth of quarters in our spare change tray. I was surprised at how much weight the coins added to the basket of blankets I was carrying.

I suspect there are many households that are unwittingly sitting on a stash of coins. I’m not suggesting breaking open the piggy bank, but if you’re in a good financial position, try to get some of those coins into circulation.

I know that may not be easy. It’s getting more and more difficult to spend coins these days. For example, most parking meters take plastic. Vending machines, casinos, car washes and arcades are just a few of the places that invite you to use plastic in lieu of dropping coins into the slot.

Finding a pay phone is also a thing of the past.

So, however you want to phrase it, there definitely is a shortage of coins circulating through the system. Is this a short-term situation? Or  maybe a preview of a time when all money is digital? No coins. No paper money. I have an idea.

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E-mail your questions to kenmorris@lifetimeplanning.com 
Ken is a registered representative of LPL Financial. Securities and financial planning offered through LPL, a Registered Investment Advisor, member FINRA/SIPC. Ken is Vice-President of the Society for Lifetime Planning in Troy. All opinions expressed are those of Ken Morris. LPL and Society for Lifetime Planning are independent companies. Investing involves risk including loss of principal. No strategy assures success or protects against loss.