I’ve just about had it. If I see one more article/blog post/tweet telling me that I need to give up my foo-foo coffee habit in the name of finance, I’m gonna…well, I don’t actually know what I’d do. But enough already!
There’s always somebody whining about Starbucks. It’s wasteful. It’s indulgent. It’s unnecessary spending. Yeah, yeah, yeah. But it’s about time the budget nazis get back behind the scope of their blame cannon and pick a better target. (Wow, it felt good to get that out.)
Starbucks (or Peets or Coffee Bean & Tea Leaf or…) is hardly the reason why our piggy banks are empty.
If you’re broke, should you be indulging in foo-foo coffee? Probably not. But is that the reason you’re broke? Probably not.
We’re neck-deep in oversized houses and overpriced cars, and we’re worried about what coffee we’re drinking? Why are we so afraid to tell each other the hard truth? We’re spending too much in every area of our life. Plain and simple.
It’s like we’re walking among the wreckage of a tornado, and starting the clean-up by dusting what’s left of the mantel.
The truth? I enjoy a well-crafted cup of foo-foo coffee all the time. Sometimes I’m on my own, with just my laptop and a latte. Or sometimes I meet up with a friend and have a long-overdue catch up over espresso. I love it all. The aroma, the soft adult contemporary background music, everything.
I’ve said it before, and I’ll say it again. The key is to find what really makes you HAPPY, what gives you the most PLEASURE, and spend more loosely in those areas. Then cut back on the big stuff that doesn’t make you blissfully content. You’ll find you have money you didn’t think existed. Does the extra square footage you “had to have” make you smile each morning? Six months in, does the new car bring you true joy?
Once you start prioritizing your finances according to what’s really important to you, you’ll have money to buy your latte and drink it too.
I totally agree, Laura. Going out for my 30 minute jaunt early each morning to get my daily caffeine fix is what gets my day going. Plus, it’s on the list of 100 tips to stave off dementia’s onset.
Here’s the link:
http://www.moneysense.ca/retire/the-financial-implications-of-dementia
And this is what’s “really” important to us here since my wife’s mom (who lives with us) has this condition.
Exactly! I look forward to my little coffee shop visits, whether it’s Starbucks or a local mom-and-pop joint. And I like your documented support of caffeine consumption! My grandmother developed dementia later in her life, which was very hard on our family. I can understand the importance to you as well!
I completely agree. Yes, if you spend all of your money and are broke, giving up Starbucks is one way to trim fat, but it sure isn’t the make or break point of your budget. My husband often complains that he wants to retire early, but not if it means eating ramen noodles… Some people take being frugal to an extreme! Personally, I love an occasional Starbucks. But on those occasions, I’m getting coffee for the atmosphere too…it’s an experience to sit and drink a tasty treat, while chilling out with friends and catching up. I just wish I could find a coffeehouse that would serve you in ceramic mugs!
Right. It’s all about balance. We live smart and have no debt, so even after investing a large part of our income, we still have money left for the coffeehouse! And I lol’d at the ramen noodles comment.
I disagree in part and agree in part. If you’re spending $3.00 – $4.00 on Starbucks 5 days a week, I agree that buying a coffee/latte isn’t going to wreak havoc on your overall budget. It’s more or less equivalent in price to a gym membership. So, from a strict numbers perspective, it’s not that big of a deal and is way overblown by most financial commentators.
However, I’d say it is a big deal in that it’s reinforcing the practice of habitual spending. I don’t know about you, but I need to constantly exercise my frugal muscles or else they RAPIDLY deteriorate. When I consistently give in to daily treats like Starbucks, I find that I’m more prone to splurge on other items. The treat habit can be a slippery slope for many of us. One minute we’re allowing ourselves to have the daily coffee, and the next we’re allowing ourselves to eat out for lunch every day, and the next…etc, etc.
I get your point about people needing treats so that being frugal doesn’t suck the life out of us, but that is a careful line to walk, for some of us moreso than others.
Thanks YTown. The treat habit, for someone who is still having trouble “managing” it, may not be a good idea. But I guess that’s part of what I’m trying to get across. If you manage your splurges, they’re not a bad thing, and are not likely the real cause of money troubles.
The real point I’m trying to make, is that someone who is living beyond their means across the board, can still enjoy their coffee habit, and instead set their sights on bigger financial targets that can make a huge impact. For example, when we downsized our home, we saved $30,000 a year. What we spend on coffee, when compared to that level of financial change, is insignificant.
For me, and others like me, the coffee is the splurge that contributes to making life enjoyable despite the frugality. We spend where we enjoy it most, and cut back everywhere else. In the last few years, we’ve become quite good at striking that balance. But I can see how not everyone has settled into a comfortable spending routine.
BAM!
Finally someone gets it. I love those MMM folks, but they are a bit on the OCD frugal side. I’m not riding a bike to pick up appliances so I can save a few bucks in gas. My wife and I follow the anti-budget philosophy. We put aside what we want to save each month as the first thing from our paycheck, we don’t stress about the rest. Read the obituaries. To many dead under 50. Life is way to short to worry about the cost of your favorite cup of Joe.
Jason
Same here Jason. We don’t really have a budget either. We transfer money for the bills to one account, save/invest a large chunk into some other accounts, and the rest is ours to spend as we want. When the spending money is gone, it’s gone!
Bingo! Couldn’t have said it better myself 🙂
🙂
I love having a nice cafe mocha with the pretty swirl in the top. It’s a nice experience and it gets me out of the house. Moving to our cheap 1-bedroom apartment made the biggest difference in our monthly expenses.
Real-life experience. I love it. Your downsizing to a 1-bedroom is exactly what I’m talking about.
Part agree, part disagree. It’s easy to say this exact same thing about any indulgence or an expensive habit. Will buying Starbucks a few times a week make a drastic impact on your financial future. I’d agree with you that it will not. But if you’re having a hard time saving money, you probably shouldn’t be doing it…
Thanks for the comment, Anton!
But…I don’t see much disagreement, to be honest. 🙂 If you remember, I stated:
“If you’re broke, should you be indulging in foo-foo coffee? Probably not.”
I already acknowledged it’s not the best idea to be buying extravagant coffee drinks if you’re broke, but the underlying psychology of it remains the same.
If someone is broke, and their coffee habit is one of the things they truly enjoy, they should be looking to cut back their budget in ways that have a significant financial impact, that doesn’t take away from their feelings of life contentment.
You said it beautifully! Choose what’s important and don’t stress over the rest!
Yes, you’ve got it!
What’s wrong with it? Most people who are indulging in this ‘habit’ are doing it in other areas too: coffee on the go, eating out etc. They never care, it’s ‘little money’ so it doesn’t matter. Only when you add up all these small expenses made in a month you realize you are actually broke because of it. I didn’t have debt years ago, had a great salary, no ‘obligations’ and yet I was barely living paycheck to paycheck. Guess why .. because I also thought these little expenses are OK 🙂
We’re proof that those expenses ARE okay. 🙂
We’ve prioritized our money correctly…our bills are paid, we put away over half our income into savings, and we spend the rest on travel, great food and coffee…
I quit smoking and the deal was I get a coffee at Starbucks every work morning.
For Ever!
Totally worth it.
“The key is to find what really makes you HAPPY, what gives you the most PLEASURE, and spend more loosely in those areas. Then cut back on the big stuff that doesn’t make you blissfully content.”
Very interesting blog, and so true.
Being careful financially doesn’t mean living like the people feature on ‘Extreme Cheapskates’!
It’s about making choices. I go to Starbucks every day. Yes, it’s a little daily treat that costs money, but you gotta live !
I don’t spend much on shoes, but then I spend more on skis.
I don’t lease a luxury vehicle, I buy a more modest car and keep it a long time. I don’t live miserably and I’m mortgage-free.
Finally, some naked truth. So tired getting bashed for being discerning in my coffee habits by Tim Hortons drinking suburbanites with their 4-bedroom in Milton and 2.5 cars. Somehow, with a $3 Americano, a TTC pass and a rented 500 ft in Christie Pitts, it’s me who has an “expensive” habit that deserves an eyeroll. Gimme a break.
I think Starbucks is just used as a metaphor for the small indulgences that add up to big money over time. We all have our vices, whether it’s coffee, beer, wine, magazines, movies, or electronics.
Replace your foo-foo coffee with cigarettes – is it the same thing?
What if you really liked smoking – sometimes on your own, with just a laptop and a cigarette. Or when you meet up with a friend and have a long-overdue catch up outside while puffing on that sweet-sweet tobacco leaf. You love it all. The aroma, the soft adult contemporary muzak, the yellow fingers, the smelly clothes, everything.
Not everyone with two cars and a big house is drowning in debt, just like not everyone with a daily latte habit has a broader spending problem. The key is to practice conscious spending and understand that if you spend more in one category then you need to cut back in another.
Cancel the cable and keep the coffee!
Agreed, being broke is more about spending far too much overall. And its worth spending a bit to get some extra happiness in a day. Your latte might be $4, but if you enjoy it for an hour or so, and it makes you happy the rest of the day then all the better. You’ll save my money by paying off or using your credit card as a debit card rather than just paying the minimum per month.
I really agree with this rebuttal. Although drinking Starbucks won’t send you to the poorhouse, the following will, unless you make $100K/year:
1) Buying more house than you can afford – I know people who make less than $50K/year, yet they see nothing wrong with buying $400K homes and borrowing to put 5% down payment;
2) Driving more car than you can afford – that $600/month payment (plus the costs of driving & fixing luxury cars, etc.) will drain your cash flow faster than a daily $4 latte (that’s only $120/month);
3) Having a propensity for designer-everything – those $400 Coach bags, $500 Ferragamo shoes, etc., will take a huge bite out of your wallet;
4) Home renos that are not needed but make your house look like a showcase, and going in debt to pay for them because you don’t have the cash (read: can’t afford them);
5) Weekly restaurant meals @ $150 a pop (believe me, they don’t have to be 5-star restaurants to rack up the bill);
6) Rushing out to replace your latest iPhone as soon as a new one comes out, “just because” (and using credit because you don’t have the cash) – many people haven’t even paid off their previous version yet and they are lining up at the store to get the latest;
7) Weekly manicures, pedicures, hair extensions, colouring, facials, etc. – it’s very easy to spend $600/month on vanity;
8) Regular visits to the casino (and you don’t drink water while you’re there either);
9) That yearly trip that you must absolutely go to (but can’t afford, hence the whole thing goes on credit cards) – we all “deserve” a yearly trip! Many of us know that we can’t afford them, so we get our R&R some other way.
Bottom line: being unable (and often unwilling) to distinguish “wants” from “needs”.
There are some excellent points in here. The big ticket items and decisions should be looked at first for finance problems, and the wants/needs on that scale need far better evaluation.
Next to them, a coffee habit is a drop in the bucket. Then again, if your bucked is already overflowing you’ll probably want to stop those drops.
I certainly hate it when this is the only or main advice in a finance column. And it is stupid when they make the suggestion an imperative (‘Dump that pricey coffee and you can save way more”).
HOWEVER, this type of example is not without its place in budgeting discussions. Even if you don’t decide to cut out the coffee, you should know what its impact is on your monthly budget. Maybe instead of cutting it out you’ll cut back. Maybe you’ll realize you are impulse buying a snack with each coffee, or getting a bigger size than you need. Maybe you’ll realize that you don’t really prefer foo-foo coffee at all, you just find it convenient and find yourself in a rush.
One of the key problems with our consumer culture is that financial decisions get made on impulse and without a conscious look at their budget impact. People see. People want. People get. And they frequently don’t analyze whether what they are getting is really worth to them what they are paying.
Coffee gets picked on because its a wonderfully compartmentalized example of this. Its easy to assess the impact, and easy to stop (in theory). But really its no different from any other spending. The key is knowing where everything fits into your budget and assessing what is worth it to you.
Great article, penny pinching is probably not going to make or break your financial success. My husband and I have made one life decision that has had a fairly dramatic effect on our financial future, and that is to not own a car (we live in Calgary where this is not the norm and people often look at us like we are crazy when they find this out). We live in a tiny house that is relatively central, with grocery stores and transit within walking distance. We walk or take transit to work and rent a car about once a month to run errands or go to the mountains. Not only do we save on the capital cost of buying/leasing a car, but don’t pay for gas, insurance, registration, maintenance, parking, parking tickets, speeding tickets, never have to take time off work to take the car in for service, never have to wait in line for oil changes. Having owned a car in my mid-20s I thought it would be a difficult transition but it’s been pretty easy. Quality of life-wise, we’re never stuck in traffic, we walk more, we eat better because we buy fresh food in small amounts from the local organic market on the way home from work etc…
We take the money we would have otherwise spent on a car and add it to the mortgage – figure it will knock 8-10 years off the amortization.
Agree also with AMM – it’s a culture of conflating needs with wants. All of the things on his/her list can add up dramatically.
Maybe what folks need to first worry about are:
* Interest rates on their debt and either lowering the rate or paying off the debt
* Bank fees being paid
Once they get that under control, then think about not having Starbucks? Frankly, if getting Starbucks is what is going to blow your budget for the month, you have some VERY SERIOUS issues that should be dealt with. I don’t really like Starbucks coffee, but I can still make the same argument for Tim Horton’s coffee.
I just love this post, and I completely agree with it! My husband goes to Starbucks once a week. If he stopped going to Starbucks altogether, we would only save about $16-20. Starbucks is not going to make or break us. It’s not ruining our budget. I read a lot of personal finance articles, and this advice to stop going to Starbucks to save hundreds of $$ (who drinks that much coffee anyway??) is just driving my crazy!
$4.00 per day is an annual $1500 coffee habit. And that’s after tax. So you need to earn about $2200 to enjoy that lousy burnt, bitter bucket of pizz eater.
Yes, your math is correct! Now it’s your turn.
Add up your splurges/habits for the year, after tax, and tell me what you come up with. 😉
And has no one considered the other fun fact? Starbucks gold cards, and the free refill policy.
Your average cost per cup falls below $1 if you’re getting refills, and if you’re being smart about redeeming you’re 12th “star” reward for something fancy. Maybe not the Sexagintuple Vanilla Bean Mocha Frappuccino or other nasty record-breaker, but getting the $7 food items for free feels just as good.
Disagree. I did the maths, and it’s ridiculous. For me, Starbucks IS the reason I’m broke. I go twice a day. In a month, I spend £220. That’s 15% of my weekly income. The problem is, I get by. I can afford my weekly travel, my dance classes, the gym, Starbucks, lunch from a nearby cafe every day (which doesn’t help either, but lunch, unlike Starbucks, actually serves a purpose). So in that sense, I’m not broke, but I’m not rich either – but looking beyond the day-to-day to taking a holiday, buying some nice new clothes, paying off debt – I don’t have the wiggle room in my weekly budget to do it. If I didn’t spend so much on Starbucks, I could do all those things.
I see your point, but I would have to disagree. Starbucks (and I’m not a coffee drinker) is just a symbol for wasteful spending and excess. You’re right, that excess is multiplied many times over in other areas like the home, cars, vacays, clothes, entertainment choices, etc…but it all adds up. Starbucks included. So, yes, Starbucks – alone – is not why you’re broke. It’s the wasteful spending habits that one engages – which Starbucks represents – that are the problems. But do you! 🙂
Great post though. I love your story on His and Her money!!!! Great job on getting out of debt and building that nest egg!!! Super impressed.
Amen!! Let’s attack the “Big 4” — Housing, Transportation, Food and Taxes — before we start nitpicking over the small details. Lowering your housing costs from $2500/mo to $1500/mo will make a much bigger dent in your finances than saving $100/mo on coffee (a 10x bigger dent). Focus first on the acts that move the needle.
Precisely!