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4 Simple Methods to Save Up to $1000 a Year on Coffee

{ Posted on Aug 29 2010 by Marcus Alston }

Some folks spend $3 or more on a cup of coffee every day.  Serious coffee users spend $6 to $10 bucks a day by drinking 2 or 3 cups a day.

Small dollar purchases such as the purchase of a cup of coffee can add up over time (aka “Latte Effect”) which is a common theme for my ConsumerMiser.com blog.  If you are frugal and or employ the miser mentality, you already know that pennies add up.  Cutting small costs can add up to significant savings and could even make you a millionaire one day.  Ever hear about the guy who asked people to send him their unwanted pennies?  People responded and he laughed all the way to the bank.  More recently, I wrote about cigarette users who spend about $10,000 a year on cigarettes.  They might as well be smoking dollar bills.  At about $800 a month, this family could have been driving a fancy Porsche, Mercedes or Lexis.  Better yet, they could be adding to their wealth instead of harming their health.

Serious Coffee Drinkers aka Starbucks Drinkers could Save the Most.  Starbucks has a vast menu of coffees with various prices.  Picking a safe and average price of $3 for a cup of coffee a day will set you back $1,095 a year.  Over 20 years, this is $21,900 without interest.  Factor in 8% interest and you are looking at saving $54,118 over 20 years.

Coffee Saving Option 1: You could prepare your own coffee at home and spend about $.50 a cup for $182.50 per year, a savings of $912.50 a year over the $3 per day option.

Coffee Saving Option 2: If you switch to hot water which may be better for you than coffee and is often free, you can save the full $1,095 compared to the $3 per day option (assuming you are not charged for the cup!).  Some experts say that coffee and tea drinkers may not actually crave the taste of coffee or tea most of the time, but are simply craving something hot to sip.

Coffee Saving Option 3: Even switching to a cheaper coffee place such as Dunkin’ Donuts or McDonald’s (yes, McDonald’s for coffee–try it, you MAY like–its ok to me) would be a savings over the more expensive Starbucks.  You could cut your cost my 50-75%.  Indeed, in the current economy Starbucks revenue is hurting much more than the cheaper, less fancy Dunkin’ Donuts.

Coffee Saving Option 4: If your job has free coffee, consider getting it there during the week.

Reality Check. I know, for the average coffee drinker, these options are not very appealing, but if you are not staying within your budget or do not have an emergency fund, do not have what you should have in savings, are not on track for your retirement nest egg or for the kids’ college education, or are not controlling your debt (the majority of consumers fit into one or more of these categories), cutting your coffee budge is something to seriously consider.

Saving Tip.   If you can not commit to making coffee at home, drinking hot water, getting a cheaper cup of coffee, or grabbing coffee for free at work and just have to have a certain coffee, do it as a treat and cut down on the number of times you do it, say to once or twice a week.

My Coffee Vow.  In May 2010, I vowed not to buy coffee for a year unless it was less than what I could make it for at home.  It costs me about $.50 for a cup of coffee at home using an individual brewer.  For an extra treat, I use flavored coffees and creamers. If you buy coffee through a value meal, the cost of a cup of coffee can be about the same or lower (see Subway’s breakfast deal—coffee is only an additional $.25 cents) than my cost at home, so I sometimes get coffee as part of a value meal.  I recently amended this vow to allow for the purchase of coffee to keep me awake and alert for safety reasons if I have to drive but I have done this only once since I started my vow in May.  I find this vow kind of tough compared to my other vows and I do not consider myself a serious coffee drinker!

So what do you think?  Can you alter your coffee drinking habits to save money that could add up to big bucks?

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2 Responses to “4 Simple Methods to Save Up to $1000 a Year on Coffee”

  1. HowtoSave,

    Thanks for the comment. I agree that coffee can be a form of entertainment and I like how you have made it a part of a larger relaxing activity. It really provides you value which is great. If you are looking for “hidden” savings, one may find it in minor expenses such as coffee (alcoholic drinks, dessert, bottled water, eating out, etc.) which can add up over time.

    ConsumerMiser

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