How much does that daily Starbucks coffee stop really cost over time? Consumers are often shocked to see the long term effect of seemingly harmless habits like drinking Starbucks coffee.
Let’s say you go with a 16 oz grande coffee at $2.10 per cup. You hardly notice it. You probably have $2.10 in the center console of your car.
But at 2 cups a day that’s $126 a month, or $1,533 a year. That adds up to $46,000 in 30 years. If you invested that money instead and earned a modest 6% return, you’d have $127,000 in the bank.
We hope you really, really enjoy that coffee. Most people probably spend more than $4.20 every time they go into a Starbucks. Why not add a danish? Biscotti? Salted caramel cake pop? Maybe upgrade to a Cafe Misto with steamed milk? Tack on a self-stirring mug or iPod speaker keychain. Add all that up over time.
Those same 2 cups of coffee at home? Over 30 years, they cost just $1,700. So, if Robert McKee is right that “with enough coffee you can do anything,” you could do a lot more by steering clear of Starbucks.
Take Care of the Pennies and the Starbucks Will Take Care of Themselves.
Think of all the other small-but-regular purchases people make. Bottled water, granola bars, breakfast, cigarettes? Apply that same logic here and it gets clear fast that each of us is sitting on an untapped monumental force for economic power. We have seen the enemy, and it is habit.
What Gets Measured Gets Improved. Starbucks Spending is no Exception.
The point is, these little everyday purchases are like the fractions of a Penny Richard Prior famously appropriated in Superman III. Or the ones Ron Livingston stole in Office Space. They’re like little leaks in your finances that are conspiring to hurt your finances. Since they only work as long as someone doesn’t pay attention to them, the key is to pay attention.
The Solution to the Starbucks Problem
There are two options. The first is to study Zen and become a master of awareness, so not even an inchworm hanging from a thread ten feet away escapes your notice. The other fits in more with modern problems, and it’s called expense tracking.
A prepaid store card, for example, would make it possible to track Starbucks spending, because it only works at Starbucks. Looking at the balance would show exactly how much has been spent there. Of course someone doing things this way might wind up with lots of prepaid cards for lots of different stores, and a wallet or purse will only hold so much.
Most banks and credit card companies these days offer some form of expense tracking. For example, while viewing a credit card statement at CapitalOne.com a drop-down window lets account holders see how much they’ve spent in several different categories in the last 30, 60, or 90 days. This includes dining, gas, entertainment and so on. The problem is, the categories are fixed and there’s no way to customize them.
Expense Tracking Apps
There are some great apps to track and analyze spending. These include Xpense Tracker, Spending Tracker, Expensify and several more. By linking one of these apps to a credit card and bank statement, anyone can easily see exactly how much they’ve spent at Starbucks in the last week, or month or year. From there, people can track spending on other small but regular purchases.
- iSpending: This app breaks spending down into categories and promises quick and easy transaction imports.
- XpenseTracker: This app is optimized for business expense tracking. It lets users build custom categories, keep a running total, and even store pictures of receipts.
- Pocket Expense Personal Finance: This app lets users set a budget for each category.
- Visual Budget: This app allows users to visualize the breakdown of their spending “in the blink of an eye.”
- GoodBudget: Spending tracking can be synced across multiple devices with this app, for family tracking.
Get Control Without Effort
The idea with measuring small expenses is that what gets measured gets improved. Once anyone sees how much they’re spending on these “little” items, they’re likely to start adjusting effortlessly.
Maybe you’ll keep trying to beat your personal best by spending just a little less each month at Starbucks. Maybe you’ll start brewing coffee every other day at home. Who knows, maybe you’ll even get good at it and like your own brew better.
It’s easy enough to start chipping away at your financial habits. It just takes the first step. So get started. You may want to brew a pot of coffee first.