For many working folk, that $4 morning latte is more than just a pre-work caffeine fix—it is a sort of reward to oneself, either for making it out the door in time to stop at the coffee shop, as a treat after an early morning workout, or maybe for simply getting out of bed at all. Whatever the excuse we make to splurge on expensive coffee, that little cup acts as a symbol of our working selves, in a way, and of the sacrifice of eight or more hours of our lives each day to our jobs. Unfortunately, it is also symbolic of the many unnecessary ways we find to waste money and stunt financial growth in our daily lives.
A common bit of financial advice over the past few years has been to reduce the number of trips to the coffee shop, but people often wonder if cutting out the grande vanilla lattes can really help get their finances on track. Aside from looking at the amount of money saved by not going to Starbucks or your local café on a daily basis, how can cutting one everyday expense change the way we think about our budgets?
Cutting Out Needless Expenses
First, let’s look at the obvious: fancy coffees such as flavored lattes and cappuccinos can cost upwards of $4 a pop at many chain coffee shops, and if you add in those tempting pastries, you could be dropping $7 before you even get to the office. For those who make this a daily habit, that’s anywhere from $20 to $37 a week! Squirreling that money into a savings account instead could get you an extra $960 a year (and that’s on the low end) to put toward a mortgage, new car or a vacation. In his Lifehack guest post, Charles LaReaux explains how you can save $18,000 over the lifespan of your mortgage by cutting out a $3 cup of coffee each day. If your caffeine habit calls for pricier drinks, imagine how much more you can save by quitting!
Aside from the savings on the coffee itself, however, cutting out one needless expense may just change the way you look at your spending as a whole. Realizing that survival is possible without a daily mocha, many come to see the other non-essentials eating up their paychecks: trivial everyday expenses like eating out, paying for cable television and buying only name-brands waste hundreds of dollars a month. Becoming frugal in one aspect of life may inspire a re-examination of your spending as a whole.
Find Cost-Effective Alternatives
Discovering cheaper alternatives to getting a caffeine fix can lead to finding cheaper ways to provide many daily rituals: making coffee or tea at home saves a bundle, with a pound of whole or ground beans costing as little as $10 and a box of 25 black or green tea bags running as low as $5. That’s nearly a month’s supply of caffeine for what you would spend in a day or two at a coffee shop.
The same savings apply to entertainment and groceries. Monthly movie streaming services like Netflix cost under $10 a month, which is less than the price of one movie theater ticket, and far less than a monthly cable bill. Buying non-perishable groceries like rice and paper goods in bulk is often much cheaper than paying for smaller packages each time you hit the store. When at the grocery store, look at what items you are spending the most on: buying fewer pre-made, name-brand items and meat can reduce your bill significantly, and you’ll find that fresh produce and other whole foods are much cheaper, not to mention much better for our bodies.
There Are Long-Term Holistic Benefits As Well:
Speaking of the health and budget connection, cutting out fancy coffee drinks may also improve your health, thereby reducing costly medical bills in the future. Not only are caffeinated beverages contributors to increased heart rate, insomnia and heartburn, expensive designer coffees like lattes and mochas are packed with extra fat and sugar, adding unnecessary pounds and increasing risk of diabetes. As Lifehack writer William Masters points out, cutting out certain dietary and habitual vices does not just save money on the items themselves, but also reduces the associated health risks and costs that come with them—things like cholesterol medication, insulin and surgeries. Remember that the more health conditions you have, the higher your insurance premiums will be.
Having said all of that though, think of ways to make the real behavioral changes automatic. Contribute to your company’s 401K straight from your paycheck so you don’t have to exercise the willpower to save each month, and set aside automatic savings in a separate account which you don’t have easy access to. Willpower is finite, and while resisting the daily latte helps, don’t waste your willpower on small tasks if you can put it to better use to effect meaningful change.