Money Hack - Buy Coffee Every Day

In personal finance circles there’s been a long debate over latte’s. Or the small daily expenditure that some people say brings financial ruin, while others say it doesn’t matter.


In one corner people say if you spend $4 every work day then that’s $80 per month or $960 per year. If you invest $960 per year at 6% then in 10 years you’ll have $12,650! So that latte is costing you a ton.

In the other corner people say, $4 a day doesn’t matter. Save 20+% of your income, buy a reasonable house/car and be done with it. Heck, even in our Buck Builders a key step is Get the Big Things Right.

So here’s why I’m still buying a coffee every work day. First, mine costs $1.90 because I go to Tim Horton’s to get a Dark Roast – Regular (one cream, one sugar). Now 20 coffee’s a month is 240 a year at $1.90 each = $456 per year. Let’s assume instead of buying coffee I invest that at 6% per year for 15 years. That would be worth about $10,600. It sounds like a lot.

But what does $10,600 get me in retirement? Well if I follow the 4% withdrawal rule then that will let me spend $424 per year in retirement….

So I could give up my coffee each work day so I could afford a coffee in retirement…

Or, I could maybe realize that when I’m retired I’ll have a bit more time to perhaps whip up a French Press coffee and just enjoy my Tim Horton’s Dark Roast every morning while I’m working.

The thing is these small purchases don’t move the needle on their own. So you have to think in savings rates. If your savings rate is high enough then you’re all set.

It doesn’t come down to coffees.

night out at bar

It comes down to houses, cars, groceries, nights out and coffees.