Controversy alert! If you’re frugal (and I hope you are!) this might upset you.
Here at Zero Cost Kids we think and do things a little differently than the usual. This is one more way to swim against the tide and improve your finances and your life. They go together.
I do believe I’m right about this one: Those $5 coffees from Starbucks? They’re not the money devil in a cup. In fact, they might be helpful to our financial picture. Read on.
The Latte Factor (blah!)
I’m so tired of seeing that stale example again and again and again in personal finance articles: The $5 latte.
The reason you can’t get out of debt!
If only we wouldn’t splurge on expensive coffee, we would all be comfortable, wealthy and wise!
Before going further, I actually agree that spending $5 every day on coffee is a pretty bad idea unless you have a very comfortable financial life. If you’re under any kind of financial strain, you should definitely tighten up that habit pronto.
Other money leaks
That said, it’s probably not your biggest money leak. A $5 Starbucks habit every week day comes to about $100 per month. And while that’s a good amount of money – certainly way, way, way more than I would ever spend – in the scheme of things, most of us probably have way larger financial leaks.
How come nobody ever suggests cutting back on alcohol? Whether ordering drinks out or pouring at home, that’s way more expensive than gourmet coffee.
Same with junk food or really any packaged snacks. Most of us could trim a fair amount of fat from our grocery carts and our snacks and meals on the go. Prep and pack your own!
There are dozens of habits that could be changed for savings. Let me know if you need ideas.
Then there are the bigger ticket items: car and house payments! While those take more time and effort to reduce than not stopping at Starbucks, the financial impact is huge.
So that’s my first complaint with “the latte factor,” as David Bach termed it.
Treats are Important!
But more importantly, this could be an issue of emotional wellness. Done right, that is, occasionally, buying a Starbucks drink or treat is a pretty affordable splurge.
When I go to Starbucks, I get a $2 cake pop or a $2 plain coffee (in the next size bigger cup so I can load it up with whole milk, which for me is a treat in itself). Sometimes I’ll get both coffee and a treat – and the bill is still under $5.
The key is, I feel indulged. I look forward to stopping into Starbucks on Tuesdays and Fridays, my treat days.
That keeps me in line the rest of the week, while not feeling deprived. I’m not locked out of Starbucks, I’m just waiting until Tuesday, or Friday. It’s always around the corner that way.
To think of all the ways I could indulge and don’t – getting pedicures, going out to dinner, buying new clothes – having that pretty small treat opportunity in my back pocket at all times is
- Affordable, and
- Keeps me from feeling deprived
In addition, I budget for it. It’s planned spending, under the necessary category of “treats.” Trust me, you’re going to treat yourself, one way or another…best to plan and budget for it!
Dieting and Money Deprivation
You’ve probably noticed that managing money works a lot like dieting. If you’ve ever tried too strict of a diet, you know that food can become a fixation, and that when you’ve denied yourself for too long, you fall off the wagon.
For me, it’s the same with the budget. If it’s too strict, with no indulgences, I’m okay for a while – maybe a month or two – and then I get ornery and rebel and go over budget – way further over than a few scheduled Starbucks treats would have cost.
Now does it make sense when I say that spending a reasonable, and set, amount of money on Starbucks once or twice during the week makes good financial sense? It’s an affordable indulgence that, for me, actually helps keep me on budget. And makes me happy, which is rather the point of life. (More or less.)
Choose your treat
This isn’t about coffee necessarily. For this to work, you have to consider Starbucks a worthwhile treat. If you’re stumbling into Starbucks every day out of habit but not truly savoring it, then definitely cut off your coffee habit and find something else affordable to splurge on!
But don’t try to eliminate every single expenditure from your budget that isn’t deemed essential. Have some treats. It’ll help both you and your finances.
You can do this!