saving money – AIM For Your FIRE

Starbucks, Dutch Bros, Dunkin Donuts.

What do you consider the category that these companies fall into? Coffee? Breakfast places? Not me, I call these the Money Traps.

Every day, people value breakfast and their coffee. Breakfast is a whole other issue that I’ll tackle in the future, but for now let’s just focus on coffee. For most college students, coffee is the daily vitamin that you take in order to get through your projects and exams. It even gets to the point, (and this has happened to me) when you have withdrawals if you don’t have your daily dose. Because of this addiction that most people face, companies that specialize in making coffee drinks, are multi-billion dollar money printing machines. The cost to make a cup of coffee is incredibly low and they get away with charging incredibly high prices for their customers.

In 2019, Starbucks generated $21.4 Billion in sales… this comes out to $65.20 per man, woman, and child, both young and old. Spending money on coffee is by far, the most ridiculous commodity you can spend your money on. It doesn’t appreciate in value and once you sip down the last drop, your body just gets rid of it soon after anyway. You are essentially peeing out money that you didn’t have to.

You can easily make your own coffee at home for around $0.17 per cup. The cheapest coffee at Starbucks is a small sized black coffee for $1.96. That’s 11 times more expensive than what you can just make at home! My wife and I go to Costco and get 2 huge containers of ground coffee for $13. Even with having coffee every day, our coffee stash lasts us over 4 months… on just $13!

Just think about what all those savings could do for your retirement or investing portfolios. If you saved that $1.79 every day and instead put it into an S&P tracked ETF that would grow just 7%, after 30 years you would have just over $70,000! Compound interest is a serious matter that everyone should be taking advantage of.

Once you become more frugal with these small changes, you’ll quickly be able to see that choosing the cheaper option doesn’t mean that you’ll sacrifice on the quality you’ll be getting. It just means that you have more money in your pocket that can work for you! And that is what all these posts in this section are about. I want to teach everyone who reads my blog that becoming more frugal doesn’t mean that you suffer, it just means that your wallet won’t suffer. In fact, it’ll make your money work just that much harder!

I think that’s a solid tip for today, I hope you learned something and that you stop buying coffee altogether in the future! Not for my sake, but for your sake. Thank you so much for following along and I’ll catch you on the next one!

Marcus

Everyone is brought up a certain way right? Some have parents that are very wealthy and can afford luxurious vacations or can buy you a car when you turn 16. While some struggle to make ends meet and might work multiple jobs to keep their head above water for their family. My personal situation was a little in the middle but more towards the former situation.

My parents had and still have stable income in their jobs. My mom has worked in health care her entire life and my dad has been a teacher for over 20 years. My parents valued education for my brother and I and they put us in private schools from K-12. It was fairly expensive for them to do it, but if it was something they were head strong on, it was education. Because they spent more on education, we had to share vehicles when I was able to drive and we would go on many road trip vacations, but we would never go out of the country or anything. Looking back on their decision, I can strongly state that I would not have done what they did for my brother and I. There is plenty of amazing public education that you absolutely don’t need to go to a private school for it.

Because they paid for our education over so many years, it set them back financially. If they didn’t put us into private education, they definitely would’ve had enough income to pay off their mortgage early and to invest more so they could retire earlier. Being brought up this way, I knew that in order to be on the right track financially, I would have to be frugal and not make the same mistakes my parents made.

So where does that leave me now? Well, my wife and I both have older cars with no thought on upgrading unless we have to. My car is 20 years old and my wife’s is 13 years old. Our mortgage is just 22% of our take home pay. Our overall expenses every month is around $2200. This means that we are spending only 40% of our income while saving 60% every single month.

Why do I bring this up, if not to boast? Because I care about what people are spending their money on. I care about people making smarter financial decisions. Setting an example for other people earning an average income is something that I want to do on this blog to show others that anyone can make the right life decisions to be in a similar situation that my wife and I are in.

In this section on the blog, I will be going through some of the things my wife and I do on a daily basis with our habits to prevent unnecessary spending. There are a lot of tips and pointers to help the average person save even just a little bit of money every day and I want to be able to bring those to light for you!

Your expenses and being frugal is the #1 component to achieving FIRE. I hope this section can help you build on that frugal mindset!

Thank you so much for reading and I’ll catch you on the next one!

Marcus