Millions of Americans start their day with coffee that they buy from a coffee shop. They drive out of their way to wait in lines to pick up their morning caffeine fix for outrageous mark-ups. This “luxury” of not having coffee at home has infected people so much that they can not contemplate giving up their daily Starbucks run, or maybe two if it is Triple Star Day.
If you buy a regular cup of coffee you are spending up to $5 dollars per cup – we will use $3.00 to be conservative. If you buy coffee only in the mornings on the way to work 5 days a week, you spend $15 a week on coffee. That is $780 a year for that one cup of coffee each morning.
Now the cost of making coffee at home is around $0.18 – we will use $0.25 to be conservative about your savings. Using the same analysis of one cup of coffee each morning you go to work – 5 days per week, you spend $1.25 a week on coffee. That is $65 per year.
Real estate investor and YouTuber Graham Stephan has become well known for his frugal lifestyle and constantly advertises his $0.20 iced coffee with creamer in it.
Just making that one cup of coffee at home saves you over $700 a year. I don’t think Starbucks’ Stars are worth that much.
But Dunkin Donuts provides convenience, right? No! What is more convenient that having a coffee pot set up the night before to have your coffee ready for you right when you wake up? For less than $100, your coffee pot can automatically brew your coffee to be hot and ready exactly when you want it. You do not have to interrupt your hectic morning to drive out of your way to the coffee shop to pick up your coffee after waiting in line. You save time every morning! Plus, if you use a travel mug for your coffee, think of the environment and how may paper cups are no longer needed.
Investing money has become a popular topic lately, so lets look at the $100 coffee pot as an investment. Each day you use it, you save $2.75 on average (not counting time, fuel, or aggravation). This means that after 37 coffees, the coffee pot has paid for itself. In the above example, this would take 8 weeks. The remaining return on your investment for the additional 44 weeks of the year would amount to $605. Plus, the coffee pot lasts more than one year! So, the next year you would save the full $780.
Coffee shops are not the only example of frivolous spending that we have normalized in today’s society. Having multiple streaming services, food delivery services, and payment plans for everything has caused our spending on luxuries to increase at the expense of paying off debt, saving for retirement, or saving for a big expenditure. But why have $600-700 to spend on a vacation when you could have the privilege of driving out of your way in traffic to wait in line to pick up your coffee?
Perhaps we should all take a page out of Graham Stephan’s playbook and become a bit more frugal. Don’t just make coffee at home. Review your luxuries and see what you are spending money on that doesn’t get used or make you happy.