photo credit: Esparta
If I had my choice between a cup of coffee and a Starbucks Americano, I would choose the Americano every time. Not just any Americano, but a grande Americano. 3 shots of espresso and a little room for cream and I’m happy. Don’t get me wrong, I enjoy coffee too, but the Americano was my drink.
Every morning I would take the same train to work and stop by Starbucks for my morning fix: a grande americano and a blueberry scone. How often? 5 days a week, and sometime on Saturday mornings. At the time a grande americano was $2.90 and the blueberry scone was $2.50. I spent $5.40 each and every morning.
In the afternoon I would generally get a little hunger for something to snack on about 3pm. Everybody does right? Well, I would venture down to my local Starbucks and sometimes pick-up a tall americano and a cookie. How much? The tall americano was $2.25 and the cookie was $1.75, for a total of $4.
How did I spend $9.40 a day on coffee, scones, and cookies? Easy, it was convenient and it became a routine for me. Just like getting on the morning train and commuting to work, Starbucks became routine. Did I have a coffee pot in the office where I worked? Yep, and we even had free tea bags! I looked forward to that morning americano and blueberry scone each and every day, no matter what. Well, how much did the it cost me? Let’s see at $9.40 a day, 5 days a week for 50 working weeks equals $2,350. $2,350 is a lot of money. No, a ton of money!
What could I have done with $2,350? Invest it, apply towards mortgage, save it, college 529 for kids, buy something else with value. The problem with spending $2,350 on Starbucks, I don’t have anything to show for it. At least if I went out and bought a new TV for $2,350, I’d have the TV to show for it.
This Starbucks spending spree happened for years and ended in 2005 after a review of our family budget and a goal to tighten spending. Even if you have the money for something, are you being fiscally responsible with your spending? Clearly, I wasn’t and needed to stop my daily ritual.
The good news, I’ve stopped the addiction for two years and no longer go to Starbucks. I still drink coffee, but brew my own every morning and probably spend 25 cents on a pot of coffee. So where is the $2,350 being spent now? On our mortgage, I apply an extra $200 a month towards it. Did you have a similar Starbucks addiction or habit? Or maybe you had another vice? Care to share it?
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I haven’t ever been a coffee fan, but I’m sure I could put a laundry list of other things I didn’t “need” but found myself getting that I didn’t need, tack “out to lunch” in that category when I don’t really need it…
Great post about the coffee. Luckily I was able to conquer some of my daily routine spending by taking a job that allows me to telecommute. Now it’s easier for me to make coffee at home and NOT go out for it.
But my wife is not so lucky. Every day, most of the people that she works with in a <10 person office want to go out for lunch. She brings her own personal cooler every day, but has the social pressure of going out. She wants to fit in with her co-workers, but she wants to avoid the $7-10 expenditure of going out.
On my website, I talk about a free website that I use to keep track of where I’m spending my money: http://www.mint.com
There was an article on CNN that offers a school of thought a bit contrary to yours about how to save money by making choices about big things — like cars and higher education — rather than the small things — like Starbucks. It’s a near article worth checking out : http://money.cnn.com/2007/01/12/magazines/moneymag/longview.moneymag/index.htm
Yarn. I am in a knit club. I enjoy knitting as a hobby, skill development and making TV watching productive. But I have to watch project costs. One project the leader chose was going to cost $200 in yarn for a 2 month project! YOu can wind up spending a lot of money on things you enjoy without thinking.
Wow that is amazing that you spent so much.
My husband and I used to have a similar problem. He still suffers from the affliction, but I’ve managed to limit myself to one Starbucks trip a week. It’s not the easiest of things, but I’m managing!
Starbucks is absolutely my only treat right now while I’m working on clearing my debt.
Yep. Cocaine. Have quit for 6 months now.
Most of the personal finance info around coffee is accurate in isolation, but pointless in reality.
e.g.:
http://theshot.coffeeratings.com/2008/08/home-coffee-myths/
It’s the brilliant idea that numbers in isolation of any human behavior makes sense in a deconstructed fashion.
The principle of “little things daily add up” also exists in weight loss, for example. Replacing full-calorie sodas with diet sodas, based on the average American’s consumption of Coca-Cola and the like, should have resulted in a steady weight loss of 17 pounds a year per person — EVERY YEAR. So you’d think that, in isolation, the popular switch to diet sodas would have left us with an emaciated population by now. Instead, we are more obese than ever.
Great post. I bet a lot of people spend similar amounts on all sorts of things, but don’t really think about how much it adds up to on a yearly basis.
Myself, I should really cut back on the soda!
Have you read The Automatic Millionaire by David Bach I believe? You just described ‘The Latte Factor’ precisely. If you haven’t read it, you should- you sound almost exactly like the example that he uses.
It’s really liberating to break those little nasty financial habits and then laugh at how dumb we were (or kick ourselves for all the money we threw away).
@ Hank I wasn’t a fan of coffee either until I started college and worked at Starbucks. Kind of funny that I enjoyed the coffee at work. I’ve heard stories of guys working at a fast food restaurant and never wanting to eat it ever again.
@ Scott B Telecommuting can be a huge benefit for your family expenses. Not only did I kick my Starbuck’s habit, but I stopped eating out for lunch. I’ll give Mint a try. Thanks for the info.
@Carol At least spending $200 on yarn will give you the enjoyment of using or selling your final project. Spending all that money on Starbucks coffee left me empty and probably made me gain some weight too:)
@ReddH I hope you can limit your Starbucks intake. I obviously couldn’t. Great to hear you’re paying down your debt.
@Greg I would agree with you that it can be easy to replace one expense with another. The key is to move that $2300 over to an auto-savings plan so I’m not tempted to spend it.
@Frugal Fergie I have the diet Pepsi addiction as well. It sure costs a lot less than Starbucks, but probably isn’t healthy for me either. I do enjoy the taste and the bit of pep it gives me in the afternoon. Diet Pepsi and M&M’s. Yum!
@ Blake I’ve got to order the Automatic Millionaire as it sounds like I could benefit from some of these ideas. Thanks for the tip.
Wow man, if I had the scratch to do what you do and buy myself a Starbucks coffee every morning, then I totally would.
Personally, $2350 is a money well spent.. but I guess its more satisfying investing it in something worthwhile