How to save money on coffee? Read this first.

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How to save money on coffee? Read this first.

At the start of 2019 I outlined around 20 to 30 goals all ranging in size, priority and aspect of my life.  One was to save $50k for the year and another was to drink less coffee. The idea is if I drink less coffee I’d save more money, right? What I discovered may have been the opposite.  First, I realized I need coffee to survive. 

So in August, I challenged myself to:

  1. Understand your coffee consumption in dollars
  2. Try to alter that by any means of my choosing (for example, cheaper coffee drinks, no coffee at all, etc).
  3. Maintain this challenge for a full 30 days, and lastly
  4. Stay around $30 budget
  5. Share my journey

The first thing I did was break down my spending.  I’ve been using Mint for a while so it was easy for me to search by the year and category of coffee.  Then I exported the data into Excel and put a pivot table on it. Honestly, sounds way more complicated than it was.  You could have easily done this in the app, but I’m fond of Excel so I used what I know. (To all the Excel power users: The app has it’s own limitation but it’s definitely worth looking at.  Note, this is not a sponsored post.)

When I broke down my spending by month, what I found was surprising.  Between January through July, I spent a total of a little under $400 on coffee.  My monthly average spend was $50. As someone who is strict and in-tune with their finances, that number shocked me because at the start of the year I had set my monthly budget at around $30 a month.  What I also realized is 5 of the 7 months in 2019, I have abandoned my anticipated budget. If I would have kept to that budget I would have spent 50% less on coffee, equaling around $200 in savings. My first sigh of relief was I knew I was on the right path to reeling in my spending.

Note, I did not include August into my calculations as it was a trial month where I executed my challenge.

At this point I wanted to know if I spend more on coffee than the average American, or less.  According to Sprudge.com,  Americans “age 25-34 spend on average $2,008 a year whereas the next closets age group, those 35-44, only spend $1,410”.  Again, this is astonishing. If you look at the first age group, that means they’re spending around $170 on coffee a month.  Let’s just let that sink in. That is 3 times my coffee budget. See why I was so surprised by this challenge.

If you’re shocked by these numbers, then it’s definitely time you embark on your own Budget Challenge.  Keep reading to learn some tips and tricks to get a hold of your coffee spending.

Now that I know what my spending is, and how I compare to others.  At this point, I need to get under $30 but I didn’t want to give up drinking coffee.  So I had to come up with alternatives that would keep me within my challenge/ goal limits.  I decided I’d learn how to make my favorite drink at a cheaper cost. I’m obsessed with a dirty iced chai.  It’s a shot of espresso with a splash of chai with milk of your choosing over ice. I can make a weeks worth of coffee for the same price as 3 of these from Starbucks.  Note, this drink retail for around $6 in NYC.

So over the 30 day’s of August, I purchased coffee 6 times and spent about $40.  In my defense, one of those coffee trips was networking for work but I’ll still count it.  Although I didn’t keep the $30 budget, I did successfully achieve all other points of the challenge.  Mission accomplished!

So let’s recap. 

First you need to understand your current spending trends.  Use whatever form of tracking is familiar to your: bullets journaling, a budgeting app or Excel. Point is, track and understand. 

Second, understand yourself. Will you keep up with not drinking coffee or will you need to find alternatives like: 

  1. Make your own
    My personal favorite recipe uses the Oregon Chai Concentrate.  It’s so good and you can purchase in bulk on Amazon.  I’m a huge fan.  
  2. Stop drinking coffee altogether
    That would bring down the spending by 100%.  Can’t ask for anything better
  3. Go with the inexpensive alternatives
    Buy the $3 iced coffee instead of the fancy vanilla latte with extra caramel
  4. Try other caffeinated alternatives
    I like to drink black tea.  My favorite type is the Tazo Chai Tea.

And last but not least, consistency is key. You will have an urge to purchase and spend but you need to remain strong.  I suggest an accountability partner or incentive. For example, only buy coffee on the weekends or 3 days off and 2 days on or find someone to do it with you. Point is stay strong because your savings will love you even more.

Oh, I also realized that a $30 average is probably too low – especially in NYC. I’ll focus on staying around $40 going forward.

Overall, this was a fun way to save money and actually see reap the benefits of my hard work.

Try this budget challenge for yourself.  Keep me posted on your results.

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