Most people probably don’t think too much about dropping a few dollars on a coffee in the morning before work. Maybe even $5-$10 bucks at those specialty places. But have you ever stopped to think how much all that coffee is costing you? …Probably not, it is just coffee after all. But let’s do some simple math just for fun.
How much Coffee does the Average Person Drink?
At first, I figured I’d venture a guess on the high side and then compare it to what Google told me to see if I was way off base. In my mind around $20-$25 seemed like a lot to spend and a good example of the overspender, but apparently, the average person spends about $20 a week on coffee!
I suppose if you factor in all the hard-core addicts and those drinking in moderation, the number makes sense. Not to mention you might have more than one coffee a day. So if we only include the workweek and assume someone might spend about $4 a day, we get our $20 dollar figure. Sounds reasonable.
So What? It’s only $20
It’s true, it’s only $20 and I’m all about improving your finances without compromising quality of life – so these examples aren’t to deter you from having a coffee once in a while, but are in fact a bit of an eye-opener, particularly for people who overspend in this category.
So no, four dollars a day isn’t a ton of money for someone working 40 hours a week, but let assume you’re having a coffee every workday from the time you’re 20 until you retire at age 55… Let’s scale it back for people who think $20 is ridiculous and make it $10 or $2/day as a second example. We’ll also see what your fancy friend who’s perpetually buzzed on caffeine or maybe even parading around an $8 latte might be spending at $40/week.
The Numbers
At $20 a week, you would be spending a grand total of $1,040/year. If we take that and assume you invested it at only a 5% return for 35 years you would have almost $100,000 thanks to the power of compounding and interest!
| Weekly Spend | Annual Spend | Total Spend (Age 20-55) | Money Saved with an Annual 5% Return |
|---|---|---|---|
| $10 | $520 | $18,200 | $49,356.84 |
| $20 | $1,040 | $36,400 | $98,713.67 |
| $40 | $2,080 | $72,800 | $197,427.35 |
Still Thirsty?
If you love coffee it’s probably unrealistic to think you can just give it up, but hey, it might make you think about cutting back a little when you see the overall cost. The key here is to see the overall effect. Not to mention you can apply this to other naughty habits like that breakfast sandwich or doughnut you grab every day.
Some of you may have already been thinking of cutting your coffee consumption or giving it up completely. If that happens to be the case, there are about 98,713 reasons here to do so!
I don’t know of anyone who buys coffee every morning because they don’t have their own coffee maker at home, yet so many people keep forking out the $ every day when they could quite easily make it at home and buy a nice thermal cup. I took a thermal cup of tea and thermos with hot water to work every day. (I don’t drink coffee, only tea) I know there are the die-hards who say people shouldn’t deprive themselves and you won’t become rich by not buying coffee but it does help to change your spending mindset so is important if FI is something you strive for.
That’s a great plan to make your own and bring it in a thermal cup. It’s true, we don’t need to deprive ourselves of those small joys in life, but at the same time a lot of people get into the ‘negative compounding’ scenario when you’re buying that Tim’s coffee everyday and adding a breakfast sandwich or a wrap, or…. whatever 🙂 Certainly adds up, and is the price of convenience.
We do a Starbucks run once per week, usually on the weekends. We save a bit of money by sharing a venti. Ends up being around $7 and it brightens our day and acts like a little fun outing if we have nothing else going on. I totally agree with you though that visiting places like Starbucks everyday can really add up. And it’s probably not good for your health, either!
Nothing wrong with a treat every once and a while!