In 2023, the U.S. Treasury announced it would be phasing out pennies from circulation due to their rising production costs and decreasing use in everyday transactions.

While the penny may still exist in your pocket change, it’s quickly becoming a relic of the past. This shift highlights the growing trend toward digital payments and a cashless society.

In the face of economic changes, now is the time to rethink your financial strategies and make smarter money moves.

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1. Maximize your digital payments

As physical coins become less relevant, digital payments are taking over. From Venmo and PayPal to mobile wallets like Apple Pay, digital transactions are faster and more convenient.

Plus, many payment platforms offer rewards for everyday purchases, allowing you to earn cashback or discounts while you spend.

Consider switching to a rewards-based digital payment system to make your everyday spending work harder for you. By embracing mobile payments, you can easily track your spending and take advantage of benefits that physical currency can’t offer.

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2. Round up your purchases for savings

With pennies becoming less relevant, rounding up your purchases to the nearest dollar can help you save without thinking about it.

Many apps and banking services now offer a feature that automatically rounds up your purchases and deposits the difference into a savings or investment account.

This small change can add up quickly. For example, if you round up each purchase by just $0.50, it could add hundreds to your savings by the end of the year.

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3. Focus on investments that compound

As the value of small denominations like pennies decreases, it’s important to focus on investments that grow over time. Compounding interest allows your money to earn more money without any additional effort.

Consider investing in a high-yield savings account or low-cost index funds that automatically reinvest dividends. The earlier you start, the more your investments could grow as compound interest works its magic.

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4. Switch to digital-only budgeting

With coins and cash becoming less of a priority, switch to digital-only budgeting tools that help you track your finances in real-time.

Apps like Mint and YNAB (You Need A Budget) allow you to monitor spending, categorize purchases, and set financial goals from your smartphone.

By monitoring your finances with digital tools, you can easily spot areas to cut back on spending and make adjustments without the hassle of keeping track of physical bills or coins.

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5. Start using cash-back and rewards programs

Why settle for just using cash when you can make it work harder for you? Credit cards and debit cards offering cash-back rewards are one of the most effective ways to maximize your purchases. These rewards allow you to earn money back on everyday purchases, which can add up significantly over time.

Look for cards that offer increased rewards on categories like groceries, dining, and travel, or use specialized programs to earn cash-back on everyday expenses while avoiding interest.

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6. Start a high-yield savings account

A high-yield savings account is one of the smartest places to park your cash in today’s low-interest environment. With interest rates on savings accounts still relatively low, high-yield accounts offer a competitive way to grow your money.

Look for accounts with no monthly fees and high interest rates, and consider automating transfers to build your savings without thinking about it. It’s a safe and effective way to protect your money from inflation.

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7. Invest in physical assets

While pennies may be losing value, tangible assets such as real estate, precious metals, and fine art can still provide a store of value. With inflation and economic uncertainty, investing in physical assets can be a great hedge against the weakening value of currency.

If you’re looking for a way to diversify your investment portfolio, consider investing in real estate or precious metals. Unlike cash, these assets often appreciate over time.

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How to stay ahead of the curve

As the penny becomes obsolete, it’s clear that the financial landscape is changing rapidly.

By taking proactive steps now to embrace digital payments, automate savings, and invest wisely, you can stay ahead of the curve and make the most of your money.

With interest rates still fluctuating and inflation pressures in play, these seven smart money moves can help you protect and grow your wealth.

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