Your Cup of Joe, More Costly Than You Think!
Have you ever stopped to wonder just how much that morning cup of Joe is really costing you? One of my good friend's Kevin said, "Man, I cant get out of there for less than $4.00 bucks." I think he's right. Every time I go, I get a Venti Chai Tea Latte. At my Starbucks, on Dearborn & Harrison, that drink runs $3.35 plus tax, taking it to nearly $4.00.
Kevin went on to say, "What the heck is $4.00 bucks for a baller like me, right?"
As I am about to show you, a cup of coffee costs a whole lot more than just $4.00.
The True Cost of a Cup of Coffee
Most people don't just drink coffee once in a while. It has become a lifestyle. If you really think about it, for a lot of people its an addiction. And this addiction is expensive. I would say the chronic Starbucks shopper spends $4.00 per day, 300 days per year. This is about $1200.00 annually.
Shocking...what could you do with $1200 this year? A simple time value of money calculation shows us that if we were take that $1200 and invest it annually for the next 30 years at a modest 6% annual return, we would have an amazing...
So what do I do? I am addicted!
Ok, I get it. You can't live without your morning Joe. I am not a lifestyle specialist nor am I a psychologist. I wont even judge you for your habits. But as a financial advisor I am compelled to offer a practical solution that will let you have your coffee and drink it too...
Try this. Skip starbucks and opt for the coffee in the office. Better still, buy the Starbucks by the bag and grind it yourself. You will save on the huge Starbucks labor mark-up. The goal here will be to trade off a small convenience or sacrifice on your part, for a huge jolt in your nest egg account.
Track your spending habits in a personal finance software, either Quicken or Mint.Com. I prefer Mint because it is web based and is so easy to manage even an addicted Starbucks drinker can use it. The goal here will be to layout in painful concrete detail precisely how much you have been spending and work every month towards reducing the number.
Once the reductions are made, take the savings and stick them in your ROTH IRA account or something similar. Somewhere where you can't touch the money and somewhere where it has strong upside potential.