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