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How Much is that Cup of Coffee Really Costing You?

I was stumbling around the internet as I do on occassion, especially when I find myself with the need to just "take a break". I don't remember exactly how, where, or even why I stumbled onto this website, but it sparked my interest nevertheless. Why? It peaked the interest of the money geek in me.

The site, particular a page on the site had a very interesting financial calculator called the Stop Buying Expensive Coffee and Save Calculator. This calculator is a lot of fun to play with to see how much your daily trips to Starbuck's or Dunkin'Donuts are really costing you (over time of course).

I said it is fun, but it is also very scary to realize the true cost of that cup of Joe and will make you want to trade away the habit, or at least start brewing your own.

Anyhow, to use an example, let's say your cup of coffee at Starbuck's, just the standard cup of the day (grande size of course), costs you $1.97 after tax and you frequent only 3 times per week will cost you $3,894.92 over the next 10 years at just 6% rate of return. Man, that's one expensive cup of coffee!

And if you think that wasn't expensive enough, the cost over 15 years equals $11,463.42 and even worse, you get one of those fancy cups instead of the cup of the day, you are spending $3.65 (I get a 10% discount at Starbuck's) for each one amounting to upwards of $21,239.32.

It also gets worse when you think about the opportunities you have to invest a greater rates of return. In fact, for those young 'nes out there that have thirty years until retirement, at a standard rate of return of 10%, investing those Grande Mochas (my fav) instead of ingesting them would put up to $150,100.80 into your retirement fund!!

As you can see, I had fun with this calculator and you can to. Just be careful as you may realize that your caffeine habit is costing you plenty.

Posted by Florida's #1 Mortgage Planner on 06/07/2007 09:14 PM

Comments (69)

starbucks coffee, coffee costs, time value of money, equity management

69 Comments on How Much is that Cup of Coffee Really Costing You?

JUN

2007

Wow......now I am really sad.......I just calculated my habit over the last 20 years.......very depressing. Hey I wonder if I would break even, by buying stock in Starbucks?

Robert...You would probably be ahead if you invested in Starbuck's stock.

Yes I don't buy expensive coffee... it is ridiculous how much they charge... maybe once month at the most.

Scott...Good for you. But do you invest the money you might have spent on coffee? If you do, then you are ahead of the game.

Since I drink about one cup of coffee a month, I am wondering where all this money is that I am saving.

Fun exercise! Great illustration how small amounts add up over time.

It's agains the law here in Washington State to 'STOP' buying coffee from Starbucks...

Well I guess I've been doing myself a favor...I don't go there!

I am a true believer that when doing the math you can save a lot of money by "Drinking coffee at the office"

That why I bought a super automatic espresso maker and save 3 bucks a day and help brighten the eyes of the other agents in the office. Well worth the front end cost of $700 not to mention the time to and back. I do miss the flirting with the girls at the local coffee shop though. I recommend a Saeco machine. If you have any question about the machines drop me an email.

starbucks makes pretty good coffee

so does 7-11..... and if i recall, beat starbucks in a taste test.

now, the occassional mocha something makes a good treat, but for everyday coffee.... it is Community dark roast brand for me. And 7-11 on the road.

BTW, did you calculate the cost of driving past 3 7-11s for your starbucks and the gas cost?

how about all of that time spent AWAY from your marketing/clients?

it might add up to the millions.

hmmmmmm

Great post! Being a retired Firefighter I know how it is to have this little black liquid intoxicating addiction. This %$#@!! addiction cost me lets see.... right down the street every frigin day I have to have a hmm vente quad espresso on ice room for cream.... or should it be the ever rich vente 8 pump no water Chia Latte ewww. Yeah that cost me almost 5.00 at the pump each time times 4-5 times a day. My God I need some Starbucks therapy - I can feel my heart getting week the earge is once again near, just the thought of that delicious monster........

Cheers to your success,

Phillip Turner...You should be saving plenty since you are not on a caffeine addiction like most of us.

Silvia...Glad you enjoyed the exercise. I actually spent about 1/2 hour playing with the thing just trying different scenarios and seeing what the numbers came out to be. Some of them amazed me, although I knew the time value of money would show a reasonable cost associated with this habit.

Rich...I can believe that they made it a law up there, especially in Seattle.

Joan...It doesn't matter what you drink really, the calculator is adaptable to any drink that you buy regularly tea, even Coke. But I am glad to see some people who don't need the daily fix.

Ron...Drinking coffee at the office can help, brewing at home may be a little better. What is amazing is how much little things add up over time, no matter what they are. And every day we spend money on insignificant things without any thoughts as to the cost.

Phillip Tucker...I got a Tassimo machine for Christmas (my request) and I use it every day (even the weekends). I spend a little more than öffice coffee, but I get lattes and capuccinos whenever I want. That is kind of nice.

Why must you attempt to take away my starbucks coffee? :)

Reminds me of a post I made a while back.

Have you been watching Susie Orman on CNN? She does things like this all the time.

Two guys slipped in as I was writing, so for them...

Tom...I tend to go for Dunkin Donuts more than Starbuck's myself, but they don't have a DD at the airports usually, so when I am on travel it usually ends up being Starbuck's. I don't have a 7-11 nearby, believe it or not. I do have 2 Starbuck's within a few miles of my home though, but DD is only about a mile.

Also, interesting thought about calculating cost to go öut of the way" to get that coffee. That could put a whole new spin on this that I will have to figure out one day.

Philip Mc...I can see you had an addiction. Anytime you order something that takes longer to say than to drink, you definitely need to seek help.

Yikes, so much for driving through Starbucks. What an interesting post--surely makes us think about how much money we waste everyday.

My husband is a McDonald's coffee drinker...he says it's better than Starbucks...cost him 48cents for a senior coffee...quite a savings! Now me...I've never been able to acquire a taste for coffee...can't even stand coffee flavoring in candy, cakes, etc. I'm a diet-coke-aholic...my hubby always says if he had a nickle for ever diet coke I've had since we've been married...we could retire in bliss....(p.s. married 43 years and about 3-6 cans of diet coke a day!)

Wow, three more snuck in, I need to type faster.

Susan...I didn't say you had to stop, just have fun realizing how much money it really is costing you. I suggest cutting out a meal or two so you can afford your coffee (just kidding).

Carol...I missed that post, I will have to go read it and see how much fun I can have with it as well. Thanks for posting the link.

Dena...I avoid Suze Orman as much as possible. She is an entertainer, says some things that makes sense, but a lot doesn't as well. She also does not practice, so to me and many others she lacks credibility. I also disagree with a lot of stuff she says and have blogged about it before.

Wow, kind of the financial equivalent of 'when a butterfly flaps its wings'. An occasional treat is fine, but this was a great reminder to stop and think once in awhile about the long-term consequences of our choices and ask ourselves if this is what we really want.

2 more, I think I am catching up.

Diane...We do waste a lot of money without thought. I am guilty of it myself, but it tastes sooo good. I like the thought of calculating the cost of the drive to get to the local coffee shop as well. That comment by Tom Burris may have to be looked into in the future to calculate that cost.

Mary...I never liked McDonald's coffee, or any of the fast food places for that matter. As for the DC addiction, two things one, it would fun to calculate the cost of that addiction and two, be careful. DC is full of phenelanaline (I don't remember the spelling), but large amounts of it could cause heart problems. One pilot I knew lost his medical and he thinks it was due to the fact he drank 6+ DCs a day.

Stop it! You're gonna make me feel guilty when I stop in tomorrow morning! :)

John...You snuck in on me as well. Very good point. All the things we buy have a cost. It goes back to what I have said many times befroe, everything is 100% financed. If we spend the money now, we give up the opportunity to earn money on it later, so it is a type of financing. I usually tie it into mortgages, but you can read my posts for that info.

Ryan...Good, guilt is a good feeling to have. It tends to well up inside and continue building until one day...change occurs. Just kidding, buy the coffee, just remember to order from the 99 cent menu the next time you go to the drivethru to make up for it...lol.

Wow! I know that I spend way too much on the Joe but it's one of life's simple pleasures. Starbucks, you can send the check to: Doug Lindstrom Loveland, Colorado.

Doug...It would be nice if Starbuck's would give us back a check for some of what we spend. Heck, I should probably charge them for the publicity they are getting from this post...lol.

I have never really understood the coffee addiction thing. I have seen people drinking coffee all day every day and it can be 110 degrees outside. What is it about coffee? Its like liquid caffeine then loaded with sugar and creme. Oh well maybe I just answered my own question! LOL

We all need a little treat some times, don't we? I never thought much about how much I spent until I started letting the kids go to Starbucks with me. It was amazing how much an "after-school snack" can cost. We no longer spend as much time there, but I do brew it at home everyday!

Robert.... this is scary and I guess it goes for anything that we buy in life... especially when buying something that we can just do ourselves, thinking.... gee, it's only 2 bucks. But as you put it, it can cost a lot of money over time. Just as I did for 8 years, eating out with co-workers almost every day for lunch. In the last 2 years, 80% of the time, I make my own and or bring my own. What a big difference. But hey, I don't drink coffee.... ;o) I drink Mountain Dew when I need my caffeine rush. ;o)

jeff belonger

Crazy....I drink 3 iced teas a day....that's $4+ dollar s a day......YIKES

Yikes, ...........I have been making my own coffee at home quite a bit these days, tired of supporting Starbucks

Man, I think everyone had their caffeine fix today as these comments just keep coming in. I need to go get another cup just to keep up. Wait, I can't that costs too much. Oh well, I will just have to forego breakfast tomorrow.

Kimberly...LOL. The sugar is to get the immediate pick me up because caffeine takes a little while to kick in. About the time that the "sugar fix" is wearing off, the caffeine kicks in and keeps you going. As Jeff B. does, Mountain Dew accomplishes the same task with even more sugar and about the same amount of caffeine, but less than half the cost.

Michelle...Brewing at home is the better way to go by far, especially if the kids are addicted as well. These little things do add up.

Jeff B...It definitely goes for everything we buy. If you apply it to all the things we didn't really need, we could easily create millions if we thought long enough. Nut hey, the Jones'have everything, why shouldn't we? Mountain Dew is cheaper and has basically the same effect, so you get Kudos for using an adequate substitute.

Larry...It is not limited to coffee as you relize. Everything, however seemingly insignificant, adds up over time.

Little things do add up. But I don't begrudge myself the little pleasures. I make money to spend money and enjoy the finer things.

Michael...Glad to see you make your own. But Starbuck's needs our help. We should be supporting them, right? Just kidding. Keep up the savings.

Tim...That is quite OK. I would say the issue is for those who spend without thought and then later in life wonder why they can't pay for the kids education or even retire. The American way is to spend...spend...spend, so some people do need a wake up call to the real cost of those coffees and other "little" things.

Dang....and I really did enjoy my cup of Chai up until reading this one.

Ugh....thanks for sharing. I think?!?!?

Thanks for the great post, it's good to look at the long-term benefits of saving that money.

JUN

2007

Yeah, but if I didn't spend it on coffee, it would be spent on something else!

A Business Friend of mine worked at UPS and recieved Stock from the company. He never cashed any until the company went public. The joke about other people who cashed stock was: That is an $89000 coffee table. investing is wise and good.

I personally don't go to Starbucks as I live in a very small town and there isn't a Starbucks for 40 miles. What I've heard though is that Starbucks has become as status symbol, it's holding that cup of coffee that makes you feel good and makes you feel "in". Like having cool new clothes in school - you're cool if you drink Starbucks - but yes you'll pay for it too.

This is one of the same reasons I never started drinking alcohol in high school or college either. I just thought it was a huge waste of money. Till this day I still don't drink alcohol or coffee.

Beth...Keep drinking that CHai, just make sure you are doing some savings as well.

Kevin...There are definitely better things we could be doing with the money, but it is OK if it doesn't destroy your overall financial plan.

David...Desn't matter if it is coffee or something else really, as mentioned several times, the little things add up. You hit a big point regarding how most Americans spend, if it isn't coffee, its something else. If we don't keep tabs on those little things, our entire financial plan can crash.

Unk...Investing is wise and good. Again, I could get into the benefits of using your mortgage as a financial tool, but will refrain here. People need to realize that that coffee is actually being financed by lost opportunity cost (they can't invest it instead.)

Abraham...You are absolutely correct, Starbuck's has become a status symbol and that is part of the reason it is so successful. The way many people view themselves is that if they can afford(?) Starbuck's others will view them as successful. At least that is one of the reasons I believe Starbuck's succeeds. I don't think it is the best coffee, just as others have mentioned.

Todd...Very good for you. I will say though that there are some health benefits of each (wine mostly on the alcohol side), but it is better to not get "addicted" in the first place.

Thanks for all of the discussion here, it has been a very fun post indeed.

Wow Robert, now you are telling me I need to go on a diet too!?! GGRRR ;)

Susan...ROTFL. Just make it a "balanced" diet...lol.

We now have a Starbucks on every corner, including a drive through....I can't resist. I too have heard Suze Orman rant about Starbucks for YEARS---until she actually had one. And she stopped telling people to go without :) Great post, alot of fun to read it and the comments.

Does the calculator allow you to add in the income from the clients that you found while at Starbucks? It happens.

Carole...Don't get me started on Suze, it likely won't end. I am glad you enjoyed the post.

Craig/Amber...No, while there are "perks" (pun intended) at the Starbuck's you frequent, they do not get factored into the cost.

But then again, if you are in business for yourself, like me, I forgot to mention that it is a meal deduction if you have coffee with someone you did business with within 24 hours of the coffee. And no receipt required for tha"t expense unless you exceed $75 (which I certainly hope you don't at Starbuck's). Now that brings up another issue, but Business taxes will have ot be for a blog later.

I dont enjoy Starbucks coffee,.. but do watch where i spend. my vice are those inexpensive lunches that seem to be familiar when i'm on the road alot. Robert, good advice to start looking at these type of costs and consider the impact over time by investing. :)

JUN

2007

A price well worth paying, in my book. I had too many years of Folgers.

Good post. It's very important consumers understand this important principle. David Bach also calls this the Latte Factor.

Nick....So much for meeting you at a Starbuck's then...lol.

Steven...As long as you know its effect and you can truly afford it, there is no problem.

Tony...Thanks. The Latte Factor, I like it.

Indulgence.... Calculate the Grande Strawberry 'n Cream Frap. The calories are higher than the investment!

-Meg

Meg...Very true, but calories fortunately to not grow compoundingly. Or do they?

It is scary how people can spend that kind of money on a cup of coffee.

http://www.sugarlandrelocation.com

Chrsitopher/Bernadette...It is not that bad to spend the money. The issues are that we need to keep better track of our spending, and more importantly, those who shouldn't be spending this much for a cup of coffee (or other things) need to stop.

JUN

2007

Great post Robert. You've made the Week in Review!

I'm so glad that I don't get that cup 'o joe from Starbucks! I'm not addicted to the stuff, but I think I'm one of the very few. Quite a thought provoking post, though. Thanks for posting!

Michael...Thank you for the mention in the Wek in Review, I am honored.

Jim/Maria...I am glad it got you thinking. It's a fun calculator to play with, but it can be very revealing.

Very few people consider the cost of a daily cup of Starbucks. The same very few don't make their retirement goals.

Sharon...It may be a very few that don't consider the cost of a daily cup of Starbuck's, but there is a majority of Americans that will fall short of their retirement goals. The daily cup of coffee is only one drop (pun intended) in the overall degradation of a family's financial plan.

JUN

2007

I'll stick with my Starbucks - at least I don't have a smoking habit... THAT would be expensive!

Galel...Starbuck's is definitely cheaper than smoking, and better for you.

JUN

2007

I think you are missing the boat if you just go to Starbucks to get a cup of coffee. You just need to schedule your trips to the coffee shop around the time they are busy. Make sure you have your name badge on and have a few loose flyers available or MLS printouts with information about the area. Then just start networking. Now you can enjoy your favorite (coffee) indulgence and not feel guilty about spending the $1.95.

Talkin' COFFEE !?! I'm in!

C'mon now! On the positive side! The cafe' is an experience. I operated a cafe' for 4 fabulous years. I love cafe' culture. People go to cafes for more than mere coffee. It is well worth the price of coffee. I still go out for coffee everyday.

And hopefully you're buying Fair Trade coffee which ensures fair prices to farmers. Organic ensures you are not drinking chemicals. The Big Green Monster features 1 fair trade coffee once a month. My little cafe' featured 100% fair trade organic coffee 100% of the time.

Cafes:

usually brew better coffee than you can at home for several reasons.

have newspapers, magazines, a place to sit awhile

& maybe chat with a total stranger

or be totally alone in a neutral environment, as you wish!

Coffee:

is loaded with antioxidants & other nutrients

is being recommended by leading US heart specialists - as much as you can drink without it causing other problems. IE: Dr, Mehmet Oz - often seen in Oprah.

is the world's second largest legal commodity next to oil.

Think about this when you drinh that coffee - a cappuccino $3 +, costs more than a day's wages for the people picking the beans. More reason to buy Fair Trade.

Cheers!

John...You make a good point about networking, though I would leave off the name badge and only keep MLS listings in a briefcase. You want to spark up a conversation, not seem like you are there to seel stuff. Trying to "sell" in a Starbuck's indicates desperation, whereas casual conversation yields better results.

Deborah...Good points. I never said don't drink it, I love my coffee. I just wanted people to realize that the time value of money along with their "daily grind" adds up and people don't realize that impact. Many Americans complain about not having enough money, yet they are at Starbuck's (or other similar type place) every day.

Robert, what great information! I am sitting shocked to think how much more money I would have been able to use, say paying down my mortgage, versus feeding my Starbucks addition...damn Starbucks, they should offer some sort of Down Payment Assistance :)

Leah...I wouldn't pay any additional money towards your mortgage. Invest it instead, it is a much wiser decision.

JUN

2007

Robert - YIKES! Using that calculation I could give up coffee and have a great vacation every year! Well maybe I won't give it up but I'lll start brewing it more at home.

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