Breaking Financial Myths: Giving Up Coffee Won’t Make You Rich

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Breaking Financial Myths is a series of blog posts written by top Personal Finance bloggers that aim to challenge the oft repeated yet seldom understood personal finance concepts. So, come on over, join the conversation, and let us know how you are a newer person because of it.

We kick off the series with Ms.Financier, a finance ninja who also happens to be a fierce feminist. Ever since I came across her work, I have come to love and respect everything about her, and perhaps that is the reason why I am super excited to have her guest post on this series.


Coffee is a hot topic in the personal finance world. I’m serious! Much ink has been spilled doing the math on how much we’re spending on our daily coffee order. If you Google “give up coffee to save money” you’ll see pages of posts, with particular judgement for those of us (like me) that indulge at Starbucks.

I’m here to confront this trope. I realize this is deeply controversial, so hold onto your hats!

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There are three primary arguments supporting the myth that eliminating your daily coffee makes you rich:

  • Purchased coffee is an equivalent experience to home brew
  • Daily coffee is meaningful, in and of itself, as an item to cut out of your budget
  • Cutting small expenses is a good investment of effort in building wealth

First things first: purchased coffee is an equivalent experience to home brew.

If you believe this statement, fine, give up Dunkin’ Donuts and bank the savings. However, many of us view our daily purchased coffee as an indulgence – a special, delicious treat in our routine. I represent those who see our local coffee shop, Starbucks, Costa, Tim Horton’s or Dunkin’ Donuts as a yummy delight.

If your daily coffee is more than just a caffeine boost, you surrender more than an “overpriced beverage” by giving it up. You lose a stroll to the coffee shop with a co-worker, friend, or mentor. You miss out on the social experience of sitting at the bar and enjoying a leisurely chat with neighbors that stroll in. You give up the opportunity to enjoy a creative (Wi-Fi connected) space to launch your side hustle.

You might argue that other places can offer the same experience – a library, for example. Possibly, though my library is less social than my local coffee shop. Don’t get me wrong – I adore my local library! But, patrons are often studying, researching for a project, polishing their resume, or quietly reading. It’s a different experience than a vibrant coffee shop.

I’m biased – I launched my blog from a coffee shop. It’s where I do some of my best creative thinking. And the coffee shops near my company offices have been host to some of my funniest, most insightful, meaningful career conversations. To me, that’s worth more than the cost of the drink itself. If your experience varies – that’s fine, but please stop coffee-shaming those of us that get far more utility out of our time at Starbucks, okay?

Next, let’s enjoy some math.

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Coffee-shamers insist that daily coffee is meaningful as an item to cut out of your budget. I argue that most of us have more significant changes that we can make before needing to cut our coffee habits.

Let’s make an aggressive hypothetical, and assume you indulge in a $4.50 coffee five days a week, or 260 days a year. This represents an annual expense of $1,170 ($97.50 monthly). While not chump change, here are a few other areas you could look for more substantial savings:

  • Car payments. The average monthly car payment in America is $493 (the average monthly lease payment is $412). And pricier cars are come with more expensive auto insurance payments. Average auto insurance payments vary, but range from $213 to $77, with an average across states of $125. If you can reduce your costs 25% below the average, you’d save $154.57 monthly. You could do this by buying a slightly less expensive car (say, 4 years used instead of 2 years, or used instead of new, or buy instead of lease), by shopping around on your car insurance, or increasing your insurance deductible. Further, if you can pay off your car and drive it for many, many years, you’ve saved the entire payment (though of course, you’ll have maintenance costs).
  • Life insurance. No, I’m not telling you to ditch your insurance. In fact, I’m a big fan of ensuring you’re managing your risk by being properly insured. But, I’ve found that many people struggle to understand insurance, and therefore may not have the right policy in place. Whole life insurance policies can be popular with agents that enjoy the hefty commissions many of those policies provide. However, many of us are effectively insured with less expensive term life insurance. In one comparison, a healthy 30-year old would pay $286.66 monthly for a $250,000 whole life insurance policy. That same coverage in a term life insurance policy costs $21, representing a monthly savings of $265.66.
  • The sneaky ways we spend more than we mean to. I’ve written an entire post on this topic, but I’ll summarize it in two words: Target and Costco. You know what I’m talking about, yes? Your store may vary, but many of us have places that we simply can’t leave without spending more than we mean to, on things we don’t really, truly value. After reviewing many, many household budgets I’ve observed that nearly every household has more than $200 in monthly savings on these unintended expenses.

The three categories above represent areas where you could look to trade off for more meaningful expenses, but there are countless others. If you value your daily coffee, track your expenses, and look for any areas that are far too high relative to what you value. Bam, you’ve found savings and get to remain caffeinated!

I’ve saved my favorite argument for last: Cutting small expenses is critical to building wealth.

Wealth is created in the gap between expenses and income. I wholeheartedly believe that increasing your income is the more important part of the wealth-building equation. The energy to focus on cutting daily indulgences you value, like Starbucks, would be better placed on developing your career, creating a meaningful side-hustle, or networking yourself into that new job you’ve been angling for.

It is easier to save and invest when your income increases; automatically transfer the additional funds to your savings accounts, investments, or biggest debts. You’re building wealth by mindfully putting this increase towards your financial goals, without having to walk enviously past your favorite coffee shop.

Further, expenses can only be cut so far; and while some choose to (or, importantly, have to) live on less, your income potential is theoretically limitless. Technology, social networks, and the increasing demand for quality knowledge workers lower barriers to innovation and entrepreneurship. Given limited time, I recommend you prioritize growing your income as a more productive long-term improvement (versus cutting modest expenses you get value from).

Despite what you might read, you don’t need to give up your daily coffee to get rich! Furthermore, if you value the experience and luxury of a regular coffee, purchased coffee is not an equivalent experience to home brew. As I outlined above, there are many other meaningful items to cut out of your budget if you’re looking to reduce expenses. Finally, we run up on reality – there’s a limit to cutting expenses, so placing extra energy on increasing income is a smarter investment of your limited time and resources.

So, enjoy the experience of your daily skinny vanilla latte if it’s something you truly enjoy. See you at Starbucks…I’ll be the one chatting with the baristas while working away on my blog! Cheers!


The Feminist Financier is on a mission to help women build wealth and own their financial independence, by improving financial literacy and taking the mystery out of money. Ms. Financier is also a shoe addict, travel fanatic, and wine enthusiast.

5 Replies to “Breaking Financial Myths: Giving Up Coffee Won’t Make You Rich”

  1. PREACH. I was already excited for this blog series, but my fiendish little heart is all atwitter to see it start off with such a bang! The latte factor has been a thorn in my side for ages, and while I definitely buy my coffee sparingly (I’m more of a tea person anyway), it can be reeeeeal irksome to see the way some finance gurus tout it as the One True Way. I love your breakdown of more meaningful ways to cut expenses.

    1. Thank you, my love. Agreed – too many thoughts have been devoted to the “One True Way”. Its time we break free (and scream hard a la Queen) so we can find ways that also make this personal finance journey feel good.

  2. I’ve always thought that picking on a particular expense (coffee, cars, etc.) is kind of missing the point of personal finance. For one, we need to allow for a diversity of approaches: what might be an easy cut for you might be a meaningful line item to me.

    And two, it’s completely arbitrary. It literally doesn’t matter what we spend our money on: only the savings rate (or depending on how you look at it, your spending rate) matters. You can have a 50% savings rate and only spend on acceptably frugal things, and I can have a 50% savings rate and spend all of my money on coffee, and we approach financial independence at the same pace.

    A long winded way to say don’t sweat the details. They literally do not matter.

    1. Thank you sharing your thoughts, Done by Forty.
      Agreed. You can be saving 50% or more of your income, yet have the ability to spend on yourself — ultimately savings habit have to tie into the ‘feeling’ factors too.

    2. Exactly what I wanted to say, said well. Personal finance is just that, “personal”. Everyone has different things they value and get meaning from, it’s up to you to decide where to cut and where to spend. The % savings is all that matters. Rock on! (Sips on second coffee today, from Starbucks…)

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