If you’re anything like me, the day doesn’t truly begin until that first sip of tea… or maybe it’s coffee in your case. It’s a comforting ritual, a moment of indulgence amidst the hustle and bustle of daily life. It kickstarts the day, and in my case, the brain. But what if I told you that your morning caffeine fix could be costing you more than just a few dollars? I want to take a few minutes of your day to explore the hidden costs of your daily brew and why treating yourself to that morning cup might be holding you back from achieving your financial goals.
Yes, your cuppa is a big part of your morning ritual, I get it, mine too. There’s something undeniably satisfying about that first sip of coffee or tea in the morning. It may be a moment of quiet indulgence before you open your email at your desk, or before your first meeting of the day. You may have dropped off the kids at school and just want a chance to pause and savour the start of a new day. But as comforting as this ritual may be, it’s important to recognize when it crosses the line from a treat to a financial burden. Hey, don’t shoot the messenger!
So, let me ask you this question, do you buy your morning cuppa at your local Starbucks or favourite little café? Good for you for supporting them, especially the small business. But while you’re helping them grow rich, you’re jeopardizing your own finances.
Let’s break down the ‘cost of convenience’ numbers. On average, a cup of coffee from your favourite cafe can cost anywhere from $3 to $5. If you indulge in this habit every weekday, that adds up to $15 to $25 per week, or $60 to $100 per month. Over the course of a year, you could be spending upwards of $720 to $1,200 just on your morning caffeine fix. That there is money that could be going towards your savings, investments, or other financial goals.
You may have heard of the “latte factor,” a term popularized by personal finance guru David Bach. It refers to the small, seemingly insignificant expenses that add up over time and can have a significant impact on your financial well-being. Your daily coffee habit is a prime example of the latte factor in action. And don’t get me started on buying lunch every day during the workday. While $5 may not seem like much at the moment, over time, it can compound into a substantial sum.
But the cost of your morning coffee goes beyond just the dollars and cents. It’s also about the opportunity cost—the things you could be doing with that money instead. Imagine if you redirected that $100 per month towards a vacation, or your retirement savings or investment portfolio. Over time, those small contributions could grow into a sizable nest egg, providing you with financial security and freedom in the future. You might even be able to retire earlier! (I have a retirement countdown on my phone, I kid you not!)
Let’s look at those figures over a few time frames, depending on where you’re at for retirement or another financial goal. These figures are worked out as if you were investing $100 per month, over the stated periods and were getting a nice round figure of 8% interest each year.
| 10-Year Total | 20-Year Total | 30-Year Total | 40-Year Total |
| $18,516.57 | $59,394.72 | $150,129.52 | $351,528.12 |
Just looking at the 10-year total alone, you’ve saved $12,000 of your money but it has grown to $18,516.57 because of compounding interest. Is that not sweeter than the sugar you put in your morning brew? I think so.
Now I’m not saying you should give up your morning coffee altogether. Good grief, no! Life is all about balance, and treating yourself occasionally is important for your mental and emotional well-being. We also want to continue to support the local small business, but not every day. It’s essential to approach your spending habits with mindfulness and intention. Ask yourself if that daily cup of coffee is truly worth the cost, or if there are more meaningful ways you could be allocating your resources. Like that vacation to Costa Rica – I just read that they’ve got a law that ‘prohibits the commercialization and free delivery of plastic bags and straws, and conditions the disposal of plastic bottles to the management of such waste’, so big high five to Costa Rica!
If you’re looking to save money on your morning caffeine fix without sacrificing quality or convenience, there are plenty of alternatives to explore. Investing in a high-quality coffee maker or tea infuser can allow you to enjoy your favourite beverages at home or work for a fraction of the cost. If it’s for work, your co-workers may want to chip in with you. You can also experiment with different brewing methods and recipes to recreate your favourite cafe drinks in the comfort of your own kitchen. Buy yourself a fancy-ass to-go-cup that makes you feel special, because I know you have your favourite mug at home, so why not to go too!
By re-evaluating your morning cuppa habit and making small changes to your routine, you can make a big difference in your ability to build wealth over time. Whether it’s brewing your own coffee at home, opting for a simpler drink when you do indulge, or simply being more mindful of your spending habits, every small step counts. So, the next time you walk into Starbucks, think about the impact it’s having on your financial future, is it really worth it, or would you rather save that $100 per month which would turn into $18,516 in ten years?
Who knew that the path to wealth could be brewed one cup at a time? Corny, I know, sorry not sorry.