Friday, 28 August 2015

A coffee a day keeps retirement away!

What do you value?

Do you value your morning coffee?

How about your lunch?

Or that mid morning snack?

Every day I see the huge waste of money being spent on frivolous things. Small things that are going to have a huge impact on the bottom line or future date the someone will be financially independent. Thanks to David Bach of Finish Rich and Automatic Millionaire fame we know about "the latte factor". Myself as a bit of simple/basic person have never even had a latte so I 'll explain this using a Canadian Institution, Tim Horton's. Half of all my co-workers walk into work in the morning with some form of beverage, usually a Double-Double. What is the cost of that coffee? $1.50 - $1.75. Before you cry out about the loss of your morning coffee, I don't mean you need to give up coffee to be financially independent. It's just that there is a more efficient choice for your caffeine fix.

The True Cost

We can look at this inefficiency a little more in depth.

$1.50 X 22 work days = $33.00/month

or you could buy a 12 cup coffee maker for under $20.00 and a travel mug for under $10.00.

using these you can brew a good coffee at home for roughly $0.27 a cup according to this post on Coffee Detective.

$0.27 X 22 workdays = $5.94/month

Cost for month 1 $20.00 + $10.00 + $5.94 = $35.94 vs the $33.00 for Tim's
Month 1 savings is -$2.94 Actually more spent than before but now you have the coffee maker.
However ever month after that you would save $27.04
Do you think that is not a lot of money?
Over a year = $324.48
10 years = $3244.80
35 year career = $11356.88 Now this is some serious dough!

Now if you save the extra $27.04 and get just 5% interest you can turn that frivolous spending into $30847.94 according to the calculator site

You can break down almost all of your minor "frivolous" expenses like this and save oodles of cash.

Because it really is all about "Sweating the small stuff" when it comes to your finances.

Do you have a story you want to tell, leave me a comment, I would love to hear about it!

2 comments:

  1. 100% agree. Very similar to my last post actually. Here's my solution for being lazy about packing a lunch.

    http://www.mrselfreliance.com/emergency-food-stash/

    ReplyDelete
    Replies
    1. Very similar indeed. However I use a more conservative 5% lol.

      Delete