Think Making Coffee Won't Help You Buy a House? Think Again
It's a sentiment we've come across time and again, the age-old advice that goes something like this: "Imagine the savings if you just brewed your coffee at home instead of buying it out." Many of us, including myself, initially dismissed the suggestion, wondering, "Could those few dollars truly make a significant difference in my finances?" While it's true that brewing at home can lead to immediate monetary savings, the real magic happens when we consider the long-term impact and the potential of those saved funds when put to more strategic use.
Now, let's put this into perspective. Ask yourself, how many times do you feel the need for that caffeine fix during your day? On average, regular coffee enthusiasts might consume around two cups daily, though I admittedly find myself indulging in three to four. When you step into a Starbucks, a tall latte sets you back by $2.95. It might not sound like much, especially when viewed as a solitary expense. But, when you start comparing this with the cost of making the same latte in the comfort of your kitchen, things get intriguing. So, shall we dive in deeper and crunch those numbers?
A pound of coffee will cost you around $8. The coffee portion will net you around $0.24 per cup.
At $4 per liter, the milk portion will net you $0.10 per cup.
At 10 cents per kilowatt, a cup of coffee will cost you around $0.005
Water is the least significant of all, with each cup costing you $0.000005.
A cheap coffee machine is $30. We’ll add this to the total as well.
Time for some number crunching. Let's break down the costs: 0.24 for the coffee itself, 0.10 for milk or creamer, 0.005 for sugar, and let's not forget that minuscule 0.000005 for the water. Add those figures up, and we're looking at a mere 0.345005 for a delightful cup of homemade coffee. If, like many, you indulge in two cups daily, that tallies up to just $0.69001 per day. Now, contrast that with the daily expenditure of $5.90 if you were to get both those cups at Starbucks. The disparity is genuinely striking! To put it another way, the amount you'd spend on a day's worth of Starbucks coffee could keep you caffeinated with home-brewed cups for well over a week. But, let's not be too stringent here. Sometimes we all crave the ambiance and convenience of sipping on (questionably tasting) coffee from our beloved Starbucks. Life is, after all, about savoring these little joys, isn't it? I confess, even I give in to that $2.95 temptation a couple of times a month. So, bearing that in mind, let's delve further and estimate our annual expenditure on coffee, shall we?
Drinking at starbucks: 365 x 2 x $2.95 = $2,153
Drinking at home + 24 instances of starbucks: (365 x 2 - 24) x $0.345005 + 24 x $2.95 = $314.37
How much can you save in a year: $2,153 - $314.37 = $1,868.63
Well, let's not kid ourselves, it’s not like you’re suddenly clutching the downpayment for a penthouse. And sure, it might only cover a month’s rent (in not the fanciest part of town). But remember, this isn’t some magical windfall – this is cash you were quite happily splashing on fancy lattes every day. Now that you have it, why not live a tad dangerously? Enjoy a bit of it (responsibly, of course), and - here's a wild thought - invest the rest! Fancy the idea of a little passive income? Want to be that person lounging just a bit more luxuriously than your peers? Dive into my 'Becoming a Millionaire with Side Hustles' series for some inspiration. And hey, while you're leveling up financially, don't be a stranger - drop by often for more pearls of fiscal wisdom. Cheers to your soon-to-be slightly more prosperous self!
