It refers to the pennies and the pounds that you have. It's similar to saying 'Look after your pennies, and your pounds will look after themselves'. So we are not speaking about money in general, but about the specific money which belongs to the people addressed.

This is a proverbial phrase. Sometimes we say things in unusual ways in proverbial phrases. In this case, "the" is used because "the pennies" and "the pounds" are referring to specific pennies and pounds - the ones in your bank account. Does that make sense? Someone else might have a better answer!

Using "the" actually relies a lot on context. It means both you and I know which thing is meant. In this case, by using "the", "which" pennies and pounds is already implied: the phrase means the pennies which you have. Sometimes "the" suggests the most obvious possibility, such as "the park / the cafe" or that the thing logically exists: "Upstairs I found a bedroom. THE bed was under THE window." (We can logically assume that a bedroom has a bed, and probably a window, so we use "the".) Without "the", the phrase sounds weak and random.