Day 33: Drinking Can Get Expensive
by Edward Smith
07 Aug 2020
Manage Your Coffee Addiction!
In this article I'm going to talk about the magical substance known to it's loyal worshipers and fan base as coffee. Coffee! Java! Liquid Mud! Cup of Joe! Caffeine in a cup! Whatever you want to call it, coffee is everywhere and if you're a coffee drinker, it's going to be one of those things that can make or break your finances if you don't manage it correctly.
Coffee Has It's Own Culture
If you drive around town, there are special coffee houses. Places filled with knowledgeable, coffee aficionados. You can buy special coffee grinders and coffee makers. Coffee has it's own equipment. When you go grocery shopping, Coffee gets it's own special section.
The coffee itself, is flown to you from across the world. It comes prepackaged in it's very own special container or bag. Coffee has a presence. People put a lot of work into presenting and selling coffee.
So what is the big deal? Why is coffee treated this way? If you're not a coffee drinker, the whole thing can look mysterious and foreign. You can feel left out, and you can become curious about it. You might even decide to try some. That's how they get you!
They Get You When You're Young!
I grew up in a family of coffee drinking intellectuals. Coffee was the smart substance that my folks used to begin their day with. Coffee was a social and thinking drink. If you saw cups of coffee, that usually meant my parents were discussing grown up things like politics, world news or events.
I was just a kid so I was excluded from partaking. That of course elevated coffee to cult status. I thought the whole thing was super grown up, and cool. I couldn't wait to get my first cup.
When I did get my chance, I was surprised by how bitter the stuff tasted. I was assured it was an acquired taste. As we all know, parent taste buds are very sophisticated, and they take time to mature. I just wasn't ready yet.
That is why, to this day, my parents still dump pounds of sugar and milk into their coffee mugs before they venture into their first sip. It's not to mask the bitter flavor, it's to enhance the coffee's overall complexity and taste. Very snobby indeed. Yea right. You either like it, or you don't. In my case, I happen to like coffee.
You know what I don't like? Expensive coffee price tags.
How Does Coffee Financially Ruin You?
It's weird, but somewhere along the way, coffee became expensive. Gone were the glory days of cheap coffee.
When I was growing up (in the ancient times), if you wanted coffee, you either made it at home, or you went to a diner. Coffee was cheap, it was widely available, and it usually came the same way every time.
Usually, you'd get handed a couple of mugs, there would be a coffee carafe, a bowl of creamers and sugars. That was it.
Now coffee has become fancy. When you order it, you have to speak in code. The coffee comes along with a string of fancy sounding expletives. You'll hear people ordering a coffee, mocha, whip cappuccino frap, a la grande shaken not stirred with a double shot of tequila brownie mix! It gets crazy, and to be honest I don't know how people remember it all.
I remember when coffee was cheap and simple.
Fancy Costs More Then Normal
Fashion, convenience and snobbery all come with a price. If you make Gucci coffee drinking a normal part of your day to day commute, that commute is going to get expensive. You might not even understand the true cost.
Take for instance a small coffee mocha. It tastes great. They add in warm milk, they stir in fancy chocolate, and you get charged $3.50 a pop.
If you're like me. You want to go big or go home. If you go with a large, it can be as high as $5.00. I should have stayed home. $5.00 is as much as what I would pay for lunch.
What if you did that every day, five days a week? If I went small, I would have spent $17.50 in a week not counting tax. If I did that for fifty two weeks I would have spent $910 of my glorious dollars on something that is gone in the next hour.
It gets worse if you go with the large. At $5.00 per drink, doing that five days a week would equal $25.00. If you did that for a year, you would have spent $1,300 dollars.
That might not seem like a big deal at first, but look at the bigger picture. Buying coffee at $5.00 a cup comes with a hidden opportunity cost. Opportunity cost is the thing you give up when you decide to do something else instead.
What if you had kept your $1300 a year for ten years? You'd have $13,000. What if you had invested that money into a mutual fund every month, and what if that mutual fund had earned 7% with compound interest? Instead of $13,000, you'd have $17,308. Instead of buying fancy coffee for your morning commute you could have bought a new car for your morning commute.
So What Can You Do Instead?
Sometimes going with the old ways, is the better way. When it comes to coffee, buy your coffee at the grocery store. At my local store, a 24.2 oz tin of Arabaric coffee costs $5.99.
That's 1.5 lbs of ground coffee that my wife and I both drink every day, multiple times throughout the day. A coffee tin of that size lasts about two weeks, and that includes weekends. Assuming I drink coffee twice a day, and I do it for seven days straight: that $5.99 tin becomes a cup of twenty one cent coffee.
That adds up. If you spend twelve dollars on coffee tins each month, and save the other eighty two dollars. Your decision to buy coffee tins over the next ten years, could net you a savings of $9,840 dollars. If you invest that money into a 7 percent mutual fund that money could turn into $14,192. You would still get your coffee every day, but you would also end up with some serious dinero. Comprende?
Conclusion
Spending money on coffee can teach a great life lesson. Even little things can add up if you look at them in a different way.
If your addiction doesn't include coffee drinking, maybe you spend your money on something else instead. For example, what if you could avoid laundry mats and iron your own clothes? What if you cooked and ate at home? What if you painted your own nails? What if you shaved your head instead of paying for a professional barber?
The world is full of luxury, but the world is also full of broke people, acting like they're rich. Make sure you fill your financial world full of creativity, ingenuity and common sense. Just because everyone else does it, doesn't make it smart. When you do it, you're the one paying for it. Make sure you understand what you're paying for, and know the cost.
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