The daily coffee addiction might seem like a small price to pay for being alert at work. That rush you feel is not a trick, it actually wakes people up. Before you drive up to your local Starbucks or Dunkin Donuts, think about what’s your coffee really costing you over your lifetime. I believe we all should drink coffee from wherever we prefer, even if it will cost you $4 dollars a cup. Obviously your money is for you to spend, but I want to give you some details as to the real cost behind this daily morning ritual.
The average person has two cups of coffee per day and if you multiply that by the entire 243 million 18 and over adult population, then you get a staggering 486 million cups of coffee per day. If everybody in the US went to Starbucks for their daily fix, it would be the most profitable company in the US. Now let’s discuss the facts. I will show you if you brew your cup of coffee at home and invest the difference in expenses how much you can save. In addition to the savings how much your savings will grow over a 30 year time frame invested in a US stock mutual fund?
What’s your coffee really costing you?
| Coffee per month | Brewed at home | Dunkin Donuts60 cups x $1.80 | Starbucks60 Cups x $4 | Investing difference |
| 2 x 30 = 60 cups | $12 | $108 | $ 240 | |
| Starbucks | 240-12=228 | -228 | ||
| Dunkin Donuts | 108-12=96 | -96 | ||
| Savings | 228 | 96 | Dumb | |
| Total $ Compounded after 30 years | $340,000 | 143,000 | 0 money | |
Now that you see the results to the figures above if you take the difference between spending $240 a month on Starbucks or brewing coffee at home at 12 dollars a month, you get $228 dollars that can be invested in the stock market. The difference invested after 30 years at an 8% return on investment you will get $340,000 thousand dollars. Now I get it maybe the Starbucks people are already investing $400 dollars a month and still spending the $240 a month on coffee, those people are doing just fine, and you should still do as you please. Because you are investing, thus making you financially smart already. But if you do not invest any money, and still continue to go to Starbucks and spend on a monthly basis $240, then it is not financially smart.
The info is not to change your coffee fix, but to show you that when you invest you win. If you want to buy coffee at Dunkin Donuts for $108 dollars a month that’s fine, but you should be investing at least $216 in investments a month. That way you are doubling your coffee expenses and putting it towards the future. It ultimately shows that you care more for your future than a dumb cup of coffee. Many young people are so happy to place cups of coffee on social media, and never invested a penny for their future. This is what I want my readers to grasp; it is not financially smart to be wasteful.
If you take information like this to heart you can see that being irresponsible with money will cost you over a specific time.
If you can take away one thing from this post it is to invest or pay down debt more than you spend on coffee.
Resources:
Census Data
Random Facts:
4 Billion is spent importing coffee
18 Billion is spent on specialty coffee consumption
That’s 14 billion in revenue companies are making off consumers.
Comment if you have any info as to what’s your coffee really costing you?
Rich Uncle EL
*The US daily coffee consumption figures are estimates and not actual figures, they are given only as an example.
I wouldn't say my coffee habit is costing me much, because I drink only home brewed. We never buy coffee out; we're too cheap! I prefer home brewed coffee to coffee that you get from, for instance, Starbucks. I can at least brew it how I like it. I don't need the fancy drink. I do invest money, though I don't know if it's the amount that I am saving from what I'd be spending on Starbucks.
Welcome Daisy. Well you are very smart to brew coffee at home and to invest at the sametime. Many people place coffee above investing and that is not good for the future. Thanks for the comment.
I did a similar comparison a few weeks ago for Clark Howard. I think using Dunkin Donuts it worked out to be a $500 a year savings by brewing at home.
It's really cool to see how that money adds up if invested.
I like saving money in all areas of life, so the starbucks addiction is unfathomable to me. Our House coffee expenses are no more than $350-400 yearly for two people.