Wealthy Wednesday Tip #2 – Make Your Own Damn Coffee

Wealthy Wednesday Tip #2 – Make Your Own Damn Coffee

If you didn’t buy that coffee every day, you would be a millionaire! Just kidding (or am I?). Every morning on my drive to work I see the long lines at drive thrus. Hard working men and women buying their morning cup of joe like clockwork. It’s only a few bucks right? WRONG! Make your own coffee (or lunch, dinner, financial decisions, etc.). Stop buying coffee to save money! The funny thing is that this is always a tip when someone talks to you about spending money. “You know if you didn’t buy coffee every day you’d save $20 a week”. While it might be eye roll worthy to many of us, the fact is that the majority of the population still makes this mistake! How many people do you see walking around with Starbucks every day? Their revenue has increased $8.5 billion over the past 4 years! The key message or principle behind this tip is that if you can cut the unnecessary expenses in your day-to-day life and save and invest that money, you will be wealthy sooner rather than later. For many of us, there’s multiple daily or weekly expenses that we can likely trim down or eliminate all together.

make your own coffee

The Solution?

Make your own coffee. Do I honestly need to say anything further? I personally drink the free coffee at my work office. It costs me $0. If your office doesn’t have free coffee, then I highly suggest investing in your own at-home coffee making materials. Don’t start making excuses of how you don’t have the time. It takes less than a minute to prepare your coffee machine for brewing (I do it every Saturday/Sunday morning!). Let’s be honest, waiting in line at the store probably takes longer.

A report from January 2017 showed that the average American millennial spends $1100 a year on buying coffees, or $3 a day. In fact, 41% of 2000 millennial’s surveyed admitted that they spend more on coffee than they contribute to their retirement savings.

Here’s how much you can save by brewing your own coffee:

Most of you probably already have a coffee maker that you may not be using consistently, or your parents might have an extra one in storage to save some of the initial costs. From researching numbers, you can go from spending $1100 a year on coffee to $120 (coffee + filters). That is a total of $980 annual savings ($82 monthly) for the average millennial! We also can’t do these calculations without looking at the benefit that these savings could have over the long term. Here’s how compound interest can skyrocket those savings!

I calculated this compound interest using a new app I downloaded called Compound Interest – How Money Grows by Spar och Finans Studion. It’s a free, simple, no BS app which is why I love it. All you have to do is enter your starting capital, monthly contribution, annual growth % (I used 5%), and the number of years. Hit calculate and it spits the number out for you. Here’s a link to check it out! I have no affiliation to the app.

compound interest calculator
Screenshot from Compound Interest – How Money Grows

Like I said earlier in this post, it’s not actually about coffee; it’s about the principle. Yes you can stop buying coffee to save money, but it’s more about cutting down on unnecessary expenses to save and invest that money. With the extras I suggest you simply increase your monthly automated savings. If you don’t know about automated savings plans, check out my tip from last week here.

Keep building your wealth – one cup of home brewed coffee at a time!

Mr. WW