Change is Hard: Why You Should Switch to Using Dollar Coins

The new gold presidential dollar coins are not only enjoyable for coin collectors, but a great way to contribute in a small way to reducing the federal budget deficit. According to the Federal Reserve and the nonpartisan Government Accountability Office (GAO), dollar coins are less expensive than dollar bills to produce and maintain. While each dollar bill is cheaper to make (about 4 cents per bill), they last on average less than two years before needing to be replaced.

In contrast, the gold coins cost the federal government about 12 cents each to make, but last 30 to 50 years before needing to be replaced. Put another way, the Federal Reserve projects that maintaining 100 dollar bills in circulation costs $2.22 per year, whereas maintaining 100 dollar coins in circulation costs about $0.40 per year. The difference is $1.82 per 100 dollars, or nearly 2 cents per dollar bill.

Just My Two Cents

Therefore, if you or I were to consistently use just a single dollar coin regularly instead of a dollar bill, we would save the government two cents. That doesn't sound like much, but if multiplied by many dollar bills per person and more than 300 million Americans, GAO estimates savings of as much as $135 million per year.

The government saves even more when people take the coins out of circulation for a personal collection. Since the dollar coin costs $0.12 to make, taking a dollar coin out of circulation gives the government savings of $0.88. With 38 Presidential gold coins scheduled to be issued through 2016, collecting a full set would save the government about $33.

While $33 over 10 years, or $.02 per dollar coin that replaces a dollar bill, is not much compared to total federal spending per capita, I would much rather have a nice collection of Presidential coins and switch to dollar coins than face a similar tax increase or further debt on my children's futures. But that is just my two cents.

Change is Hard