'penny-pinching' originates from English, a compound of 'penny' (small coin) and the present participle 'pinching' from the verb 'pinch' (to squeeze or to be stingy with).

'penny' comes from Old English 'penig' meaning 'small coin' and ultimately from Germanic roots; 'pinch' comes from Middle English 'pinchen' (from Old English/Old French influences) meaning 'to seize, squeeze'. The compound form 'penny-pinching' arose in modern English (recorded in the 19th century) combining these elements.

Originally the components referred literally to a 'penny' and the action 'to pinch' (to squeeze or take); over time the compound came to mean 'being stingy' or 'extremely frugal' rather than any literal squeezing of coins.