It takes more than spare change to manufacture the money we wear out every year. Just how long can a $1 bill be used before it’s too worn? About 5.9 years.
You see, not everyone pays with plastic (credit and debit cards).
Each year, the Federal Reserve (The Fed) estimates the likely demand for new and replacement currency and places one order to the Bureau of Engraving and Printing (part of the U.S. Department of Treasury), which actually handles production. Then, the Fed is responsible for circulating the new currency to the 12 Federal Reserve Banks, which amounted to about $1.54 trillion in circulation as of April 5, 2017, according to Fed data.
While the Federal Reserve handles billions of dollars in currency each day, U.S. consumers also wear out plenty of it. As a result, the Federal Reserve Board budgeted a hefty $726.6 million to print $209 billion in new U.S. currency for 2017, about the same as last year.
To keep currency fit for commerce, the Federal Reserve routinely shreds and replaces old, worn and mutilated notes. Some shreds go to landfills and some are recycled. The U.S. Treasury has allowed shreds to be combined with other materials to produce countertops, insulation, shingles and fuel pellets, according to the Kansas City Federal Reserve Bank. Novelty items made with shreds include pens, ornaments, jewelry, key chains and picture frames.
Unlike currency, the U.S. Mint is the issuing authority for coins. So the Federal Reserve forecasts the need and sends a monthly estimate to the U.S. Mint.
Check out this video and the chart below to see what is costs to mint and print each denomination:
Cost of Production*
|$1 and $2||5.4 cents per note|
|$5||11.5 cents per note|
|$10||10.9 cents per note|
|$20||12.2 cents per note|
|$50||19.4 cents per note|
|$100||15.5 cents per note|