I’ve been reading a lot of personal finance and early retirement blogs lately. It seems that everyone seems to have a “stop drinking take away coffees and save the money” post where they do the maths behind saving the cost of one coffee a day and how compound interest means that in the long term you’re spending much more than you think by having an “innocent” one coffee a day.
I understand that the articles aren’t specifically always about the coffee itself but more of a general look into how lots of little savings can add up to a large lump sum:
Look after the pennies and the pounds look after themselves.
It got me thinking about my personal situation. I’m guilty of buying a fancy coffee every day. Should I stop if I want to be more financially independent and retire early?
Every morning I get myself a medium cappuccino from the Costa in the work canteen. Its the exact same machine as in a high street and after trying hundreds of coffees over the years I know its the exact same product. I’m lucky enough to have a subsidised canteen. So this only costs me £1.80 which is a lot cheaper than you’ll find elsewhere (£3.31 from a motorway service station!)
I also use this coffee as a replacement for breakfast. The cup contains 195 calories which is enough to keep me going until lunch time. I’m never in the mood for solid foods early on drinking suits me fine. The added benefit of skipping breakfast in the house means I also get to sleep for an extra 20 minutes. Most people will appreciate the value of extra time under the duvet.
If we say a bowl of cereal costs 40p I’d be saving £1.40 every day by not having a coffee as my breakfast. that comes to £7 a week. I would however be losing 1 hour 40 minutes of sleep by having to wake up earlier to make breakfast in my house. At that price, I’ll happily take the sleep.
I know in most cases it will work out that ditching the coffee is the sensible option. Not everyone works somewhere that subsidises their coffee, and not everyone uses it as a breakfast replacement. Its just worth pointing out there there are a lot of exceptions to the money saving tips you see online.