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Sunday, November 29, 2015

6 Ways to Save Real Money on Coffee

Beyond the Latte Factor... 6 Ways to Save Real Money on Coffee

6 Ways to Save Money on Coffee
6 Ways to Save Money on Coffee

You have probably heard of the latte factor- this is an illustration of the concept that a small amount of savings or investment can add up over time.  A common example is investing or saving $3 dollars every day instead of buying a latte, thus the term "latte factor".

I think the latte factor is a powerful concept, and I think there are several ways you can save money on coffee and use that money to pay off debt and build your wealth over time.

1. Order simple coffee instead of fancy coffee drinks.  Save the lattes for a treat instead of every day.  This literally removes the latte factor from your budget, saving about $1.50 per day which adds up to over $500 per year.  Plus you can leave a lot of extra calories and fat out of your coffee.  

The coffee in the photo above cost me $3.14 at Starbucks.  Why did Dr. Penny Pincher buy a $3 coffee at Starbucks?  Here's the story behind this purchase...

2. Make great coffee at home.  You can make great coffee at home from fresh ground whole coffee beans for 60 cents per 16 oz. mug.  Coffee at a coffee shop costs about $2 per cup, so you can save about $500 per year by making your own coffee at home instead of buying it at a coffee shop.  If you drink two cups of coffee per day, this adds up to $1,000 per year in savings.

3. Cut back to one cup of coffee per day.  I used to drink two cups of coffee per day at a coffee shop.  Ouch!  Since then, I have started making coffee at home, and I have cut back to one cup of coffee per day.  

If you are drinking two cups of coffee every day and cut back to one, you'll save over $700 per year if you get coffee at a shop or over $200 per year if you make your coffee at home.  

When I cut back to one cup per day, I gradually reduced the amount of caffeine I got by mixing decaf coffee beans with my regular beans.  The key is to gradually reduce your caffeine consumption over a period of time to avoid caffeine headaches.  Here are details on how to painlessly cut back on how much coffee you drink.

4. Find cheaper coffee places.  McDonald's has coffee for $1.39.  This doesn't sound that much cheaper than $2 or more for coffee at Starbucks, but this adds up to a savings of around $150 per year if you drink coffee every day.

5. Go with a smaller size.  Generally, you can order small, medium, and large coffee.  People tend to order the largest size since it is the best value- for only 50 cents more, you can get nearly twice as much coffee.  But if you can train yourself to order the smallest size, you can save over $180 per year.

6. Don't buy scones, muffins, and other stuff at the coffee shop.  Coffee is expensive at coffee shop, but the snacks are even more expensive.  Just stick with coffee and save hundreds each year.

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