Skipping Starbucks to Buy a House

Finance

Jan 2

The classic line about brewing coffee at home instead of grabbing a Starbucks latte might sound tired, but it’s worth a second glance. At first, I wrote it off. Then I decided to crunch the numbers and discovered a surprising difference that fits right in with common sense money management.

I also have a personal story that ties into this. When I first got serious about investing, I trimmed my Starbucks habit. That shift helped me free up around $1,000 to invest. Fast-forward to today, and my portfolio is reaching $2 million with monthly dividends of $10k to $12k. It’s not that coffee alone got me there, but each small saving step added momentum.

I’m now 35, and I could have officially retired some years ago, but I love teaching, so I still do one or two terms of biology, biochemistry, or genetics for undergraduates every semester. No summers, though!

Price Breakdown in 2025

Daily Starbucks Tall Latte: $3.50
Homemade Coffee: About $0.30 per cup (based on a $10 pound of coffee)
Milk or Creamer: $0.12 per cup (figuring $5 a liter)
Sugar: $0.01 per cup
Water: $0.00001 (tiny fraction)
Coffee Machine: $50 (basic starter)

Add these for a homemade cup: $0.30 (coffee) + $0.12 (milk) + $0.01 (sugar) + $0.00001 (water) ≈ $0.43 total. Two cups a day lands at $0.86 daily. By contrast, hitting the café for two cups is $7 daily. Over a year, that’s where the difference starts to shine.

Annual Calculation

Starbucks Every Day (2 cups): $3.50 × 2 × 365 = $2,555
Home Brewing + 24 Café Visits:
- (365 × 2 - 24) cups at home = 706 cups × $0.43 = $303.58
- 24 café cups at $3.50 each = $84
- $50 for a basic coffee machine
- Total ≈ $437.58

Subtract $437.58 from $2,555, and you get around $2,117.42 saved in a year. That’s a decent chunk of money that could be used to invest or pay down debt.

Extra Cost-Cutting Examples

After reducing Starbucks visits, I trimmed several other expenses as well. First, I cut subscription services that ate up $50 per month. I cut down on takeout. Then, I sold my car in favor of a more modest 2008 Honda Fit. Those moves alone gave me another $10,500 in annual breathing room. With that extra money, I built my portfolio faster and managed to pay for down payments on various properties down the line.

These steps might look small, but they can add up significantly. Young people, in particular, might feel the crunch of expenses from all directions. Making a few calculated choices can open doors to bigger long-term moves.

One big thing you can do is budgeting. Trust me when I tell you this is the single most significant thing you can do as someone who either doesn’t earn much or is living paycheck to paycheck. Why? Because we often tend to overspend on things we shouldn’t be spending our life (money) on.

Take the Next Step

If you’re interested in investing, budget hacks, or money management, channel those extra funds into something productive. Look at index funds, real estate, or other opportunities that fit your risk profile. There’s satisfaction in knowing that something as unglamorous as skipping a daily latte can snowball into meaningful wealth.

So here’s a question: What small shift can you make today that frees up funds for tomorrow? Think about the coffee example, then tweak and apply it to other areas of your life. It doesn’t mean you need to cut out all creature comforts, but a few mindful tweaks might be the difference between a life on autopilot and one driven by financial choices you control.