While it may not seem like you’re spending a lot of money on your daily coffee in the moment, the habit can really add up and prevent you from saving some serious money. You and many others may try to stop drinking Starbucks coffee, but the delicious foamy lattes bring you back every morning.
It’s a tough habit to break for many of us, since a quick stop at Starbucks is an essential part of the daily routine. But before you come up with your justifications for your Starbucks runs, check out how much the habit costs you over time.
How Much is Your Starbucks Habit Costing You?
If you buy, on average, one $4 Starbucks drink a day, that is $28 dollars a week. Not so bad, but that comes to $120 every month, which is a whopping $1,460 per year. Five years later, that seemingly harmless daily coffee trip has cost you a conservatively estimated $7,300.
Now what if you didn’t spend $7,300 and that money was able to accrue interest. The missed investment returns would bring you up to about $9,300 (assuming a 9% average return). That’s a whole lot of money that could have been used elsewhere.
Money You Save
Clearly, cutting starbucks out of your life would save you some big bucks. If you can’t live without coffee (I know I can’t), try to make coffee at home instead. You can even buy Starbucks brand coffee to make at home. Costco sells 2.5 pound bags of Starbucks French Roast for $22. With all the other accoutrement, you’ll be spending about about $30 a month for coffee. This is much better than the $120 monthly coffee bill you get from a daily Starbucks habit.
If you were to save money from cutting back on daily Starbucks runs, you would be able to afford a lot more. If you gave up your daily Starbucks for 84 days, you could afford a main-level ticket at Yankee Stadium. 143 days would get you an iPad mini. If you could make it 247 days, you could have enough money to go on a two-day cruise to Mexico. Just something to think about next time you want to walk into a Starbucks.
Matthew Stevens is a finance industry veteran, but he prides himself on being tech savvy and abreast of any emerging trends in the test prep world. Knowing the rigors of CFA exam preparation, he seeks to ease the test prep process for future charterholders and fast track their success. Learn more about becoming a CFA at his site, Crush the Financial Analyst Exam.