How Much is Coffee Costing You?

If you are thinking about small changes that can save you a lot of money over time, consider some of the recurring purchases you make. Something as inexpensive as a cup of coffee could be costing you thousands of dollars over time. How much is coffee costing you?

Welcome to the first Food Finances Fridays of 2019. Today’s post is about how much money Americans spend on coffee.

Many people love coffee or tea. While it may seem like an inexpensive indulgence, over time the costs can add up.

Last year, The Motley Fool ran a story titled One Third of Americans Spend More on Coffee than on Investing. A 2012 study found that the average American spends more than $1,100 a year on coffee.

While I am all for enjoying life, it’s also important to make an informed decision about how much our decisions are costing us.

Here are a few examples of real-life people I know (names changed to protect their identities of course) and their coffee habits. Which one of these categories most closely matches your coffee habits?

Photo by Jules D on Unsplash

Example 1: Amy buys coffee multiple times per day

One friend Amy was on internship. She started talking about how much she is spending on coffee and she ran the numbers. Not only was Amy buying coffee everyday, but multiple times every day.

We calculated how much she would spend on coffee from that day until the completion of her internship in 6 months.

  • It was over $2,000 in just six months!!!
    • That’s $4,000 in 1 year in coffee
      • A whopping $20,000 in 5 years

I asked her what she could do with $2,000 and she realized she could pay off her credit card debt by the time she completed internship.

Results

So did Amy stop purchasing coffee multiple times per day? Not exactly. But she did make some major changes in her coffee habits.

She pulled out her old coffee maker and started making coffee at home every morning. Then, she allowed  herself one trip to the coffee shop in the afternoon. She also allowed herself coffee as a treat on mornings of special occasions, for example on the morning of the “match” when she found out where she would be attending post-doc.

Amy became more conscious about when she was going to the coffee shop and how much it was costing her. Motivated to pay off her credit card debt, she also make small changes in other areas of spending (e.g., buying shoes less often). She successfully paid off her credit card debt by the time she completed internship without giving anything up, but just by making a small change to her daily habits.

Photo by Jon Tyson on Unsplash

Example 2: Melanie buys coffee once per day

Another friend Melanie was only buying coffee once a day. She told me each cup was $3.78.

We did the math:

  • $3.78 x 7 days/week x 52 weeks per year =$1,375.92 for 1 year
    • That’s $6,879.60 for 5 years

Results

Melanie was a new staff member facing student loan debt in the hundreds of thousands of dollars. To pay off this massive amount of debt while making an entry salary of only around $70,000 a year, she was considering taking on another position teaching in the evenings. After we ran the numbers and saw how much could be saved by bringing coffee from home, that’s exactly what my friend started doing. I haven’t seen her with a Starbucks cup since.

She also brings her lunch from home everyday and yes, she also took on an extra job in the evenings.

Example 3: Bruno takes daily breaks with his friends

There’s a group of people at work of whom I am admittedly jealous. While many of us struggle to find a time to take a break, there is a small group of people who are all able to take multiple breaks together.

Each morning and afternoon, they walk down to the coffee shop in our building and purchase a hot beverage.

Bruno does not have any children. He is not in debt, but does not want to waste money.

He proudly showed me his reusable coffee cup, which he brings with him every day to get a $.50 discount on each cup.

Results

At $1 a day, that’s nearly $500 savings per year, or $2,500 savings per year just by bringing one’s own cup.

Because disposable coffee cups are lined with plastic, they are not recyclable at most centers. Not only does making coffee at home or bringing your own cup save money, it also reduces waste. Save money, save the world!

                                             Photo by Mert Guller on Unsplash

Example 4: Sheila has an occasional tea

Another friend of mine would ask if I would like to take a walk to the coffee shop with her to get some tea. I always enjoyed the walk, but would take my water.

Unlike in the previous examples, this friend did not buy tea daily. However, she told me that one day she was trying to remember how much a tea cost and as she went over her numbers, she was surprised to see how often she was buying tea.

Results

As someone who was looking to purchase a home and build up her retirement, she didn’t want to drink up all her savings. Sheila switched to her second favorite yet much less expensive beverage of choice: hot water with lemon.

Photo by Tyler Nix on Unsplash

Example 5: Husband makes coffee at home

In comparison, my husband buys a can of coffee from the grocery store whenever it goes on sale ($5.99 sale price). We each usually have one cup a day; I sometimes do not have any coffee on the weekends. A can lasts us approximately a month and a half. Therefore, we buy a can of coffee about 8 times a year.

  • $5.99 x 8 times per year = $47.92 for 1 year
    • That’s $239.60 for 5 years

That’s a huge a difference compared to the thousands of dollars spent purchasing coffee even once a day.

Final Thoughts

Amy was spending $20,000 over 5 years on coffee?! 

I enjoy a good cup of coffee, soda, or alcoholic beverage just like everyone. I’m not saying to stop drinking your favorite beverage. But if you are struggling financially or not meeting your goals, it’s important to take a closer look at our daily habits and understand how they are affecting our finances.

 

How much do you spend on coffee or tea?

15 thoughts on “How Much is Coffee Costing You?”

  1. Some people scoff at this advice and say “it’s not too much” but they don’t realize how much it really adds up to. Additionally, so many people drink those sugar-bomb, diabetes-inducing toxic things with whip cream on top that Starbucks charges like $5 for. They’re basically worse than fast food.

    I make coffee at home, and drink it black.

    1. Hi Dave. Yes, you make an excellent point that a lot of those “coffee” drinks are really unhealthy! I’m working on making my coffee black, or cutting it out altogether.

  2. coffeenomics is an interesting field.
    I have a friend who invested about £1000 in a coffee machine that would last a lifetime. He now has a newer shinier one that he got for Christmas – the old one still works but it now in a cupboard.
    Remember that coffee is for life – not just Christmas!

    1. Yes, people get quite serious about their coffee. But to keep a fancy coffee machine in a cupboard as back-up? I’d bring it to work so that others can enjoy it. Thanks for the comment!

  3. For years, I’ve been buying cans at Costco and also buying half-and-half. I make about 3 cups per day, and it works out to probably 40 cents or so per day. At home, I’ve actually started switching to the Kirkland pods, and am thinking that I might do that at work as well. If I drank three cups per day, it would more than double my price, but the thing I’ve found out is that I’m generally okay with just one cup. So the way I see it, I can keep my costs the same and cut my coffee intake by 2/3. Something I’m considering.

    1. Hi Money Beagle, I agree that I think I want more coffee, but find I do fine (even better, less jittery) when I have one. Moderation is a skill I’m trying to teach myself.

  4. I don’t know where Bruno is buying his coffee that he’s saving $.50 just by bringing his own cup – most places are a paltry $.10. It’s still worth it for me, both for the environmental savings and also to keep my latte hot (I sip slowly!) but I don’t think this is a typical savings.

    I go back and forth on the “latte factor”. On one hand – I don’t have any other vices. Sure, spending a lot of money each month on fancy coffee drinks is frivolous but I work hard, enjoy the drink, and I’m not really spending on anything else. On the other hand – I can really see how focusing on more occasional indulgences can very much add up over time and be the money you need for an amazing trip, investment, or donation.

    1. Hi Vanessa! Yes, Bruno has it made. You’re right that the savings by bringing your own cup may be paltry, but the environmental cost is quite high. I like your point about reusable cups also keeping beverages longer warmer.

      This subject is one many of us go back and forth on. We all have our vices and it’s not about giving up life’s enjoyments, but making mindful choices about them. Thanks for your comment!

  5. What one person values, another person thinks is frivolous.

    I buy the occasional latte or coffee on long car rides where brewing my own isn’t an option. I could ditch the habit and save a few bucks, but I enjoy the warm drinks on long car rides.

    I’m a big fan of building fun money in to the budget. My wife and I call it “walking around money” it’s money we can spend on whatever we want. Coffee comes out of the “fun” money.

    1. Hi Michael! Completely agree that what one person values another thinks is frivolous. As my friend “Amy” said to me, “it’s about choosing your vices” not living without them. I love your plan to build in fun money. I am trying to make a conscious effort to do this myself. There’s something about a cup of D&D coffee on the morning of a car trip that just makes me so happy!

  6. I drink the free coffee at work (which I jokingly refer to as “rotgut”) but I do buy coffee on the weekends. Typically once a weekend, maybe less.

    That means, if I spend $4 on the expensive coffee at Starbucks once a weekend, and there are 52 weekends a year, I’m spending $208 on coffee a year.

    The main reason I don’t make coffee at home is that I don’t have a coffee maker. I’ve considered buying a simple one – maybe on of the many used ones they always have at thrift stores – but I haven’t yet.

    1. Hi Joe! Free coffee at work?! I’ve been out of the private sector for so long that I forgot some places offer such perks. If I was getting rotgut for free 5 days a week, I think I would also take it then enjoy the precious cups of non-rotgut coffee on the weekends.

  7. Had not thought of it from this angle. I make coffee at home and have a jar of instant coffee at work. About once a month I will treat myself to just a basic normal sized cup of coffee at Starbucks that is in my work complex. What stops me from going there more often is that 8oz of normal coffee is what I pay for my week’s worth of half and half creamer. Paying almost $2 for 8oz of coffee is crazy so it is a treat.

  8. In our house we are avid coffee drinkers, while I don’t go to coffee shops everyday I can do some damage with our Keurig. I was spending about $22 a week on Kcups! So we’ve now switched over to a reusable Kcup and buy bags of coffee that are on sale and we have coupons for.

    1. What a great idea to get reusable Kcups and buy coffee on sale. I love this tip – it not only saves money but also reduces waste. Thanks for sharing!

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