Coffee is the poor man’s luxury

“Skip the coffee.”

“No more lattes.”

“Well, if you didn’t buy Starbucks every day…”

This is arguably the most POPULAR personal finance advice, for some reason. Today, let’s dissect it.

This week, meet:

➡️ The War on Coffee
➡️ The coffee spending numbers
➡️ This isn’t really about coffee
➡️ Budget Bites

The War on Coffee

I was on a work trip last week.

I couldn’t figure out how to operate the free Hamilton-Beach-brand Keurig in my hotel room. It showed no signs of life when I added the pod and pressed the button, so I added more water. Still nothing. More water. I shoved down the pod lever ‘til I thought it’d break, until it suddenly gave way. The machine finally started pissing out the bitter liquid. Next time I turned around: coffee all over the counter. I sopped up the mess with a pure white terrycloth rag, did what I could to rinse the brown from the rag, and left it shameful and damp at the bottom of the dirty towels pile.

I love coffee.

I went to the office later that morning, took a break 1 hour into working, and performed the calming ritual of filter, scoop, water, and Mr. Coffee.

Wonderful.

My last day there, I wandered down to a cafe near the hotel to get a real deal Americano (and avoid a repeat Hamilton Beach fiasco). It was so good, it didn’t need cream.

I love coffee.

Anyway.

Let me show you some helpful financial advice:

Now let me show you some unhelpful financial advice:

I love coffee. I loved it even when I was poor. In fact, the most I’ve spent on coffee in my life was the years I was in college.

Rich people don’t like that.

Rich people like when poor people deprive themselves of little treats. They seem to be under the impression that this will make them miraculously un-poor.

There’s a market for “coffee savings plans.” There’s an insinuation that if you just stopped buying those goddamn lattes, then maybe you could save for retirement.

There’s a common math breakdown that shows if you’d just skip that $5 coffee every day, you’d have $1,825 extra a year! And if you invested that money, it would compound into almost $75,000 after 25 years! Wouldn’t you love to have $75,000 after 25 years! Wouldn’t you be happier if you had $75,000 after 25 years instead of a cup of coffee right now! You stupid idiot!

I have a couple problems with this.

If you couldn’t tell.

But I have 2 main ones…

• The reality of coffee spending doesn’t align with this logic.

• Even if it did, that doesn’t matter. Because it’s not about coffee.

The coffee spending numbers.

I was about to boldly state, “No one is spending $5 on coffee every single day.”

And then I had flashbacks to the regulars at my old barista job… Roy with his daily nonfat half-sweet hazelnut latte… Mark with his quad shot Americano… Deb with her blended Milky Way with whipped cream (but only whipped cream on Saturdays, because she was too embarrassed to walk into her 9-5 job with a whipped-cream-filled dome lid and on Sundays she went to church).

So let me amend this:

Unless you’re Roy, Deb, or Mark, you’re most likely not spending $5 on coffee every single day.

But how much does the average American spend on coffee?

As usual, it depends on who you ask, and how they gathered their data. A 2012 ABCnews article cited $1,100/year. Statista cites a survey where the most common reported annual spending at coffee shops was between $572 and $1,040. Some random New Yorkers on a Reddit thread reported spending upwards of $2,000 per year on coffee.

Since accounts vary, I’m going to fall back on the most reliable source:

Personal experience.

I apparently spend between $150 and $300 on coffee in a YEAR.

So for someone who just preached about how much I loOoOove coffee, I feel like I have some explaining to do.

There are a few factors at play:

1. I’m a homebody. Leaving to go get coffee involves going out in the world of people. That’s a chore for me.

2. I’m a cheapskate. Whether the Dave Ramsey demon has whispered in my ear or what, ever since college I’ve subconsciously cracked down on my own coffee shop spending. Six dollars doesn’t feel worth it on a regular basis for a drink I can’t guarantee will be made well.

3. I’m a cheap date. Eight times out of 10 when I go to a coffee shop, I order an Americano anyway — which is often the cheapest thing on the menu after tea. (The other 2 out of 10 time is usually something iced, flavored, latte-y, and close to $6.)

4. As my partner so eloquently put it: “I dunno, I feel like you’re less likely to buy coffee when you work from home.” Which, to play devil’s advocate, oftentimes getting a coffee is the only time I see other humans face-to-face between the hours of 9 and 5, and once in a blue moon, that’s appealing to me. And on the other side of things, getting a coffee on the way to the office involves waking up earlier and waiting in long lines. Wasn’t for me when I was an office gal.

5. I’m okay with making coffee at home! I really do like that it’s cost effective, and I really don’t mind how it tastes. The ritual of it is comforting, too.

But I don’t care what I, or the average American, or random New Yorkers on Reddit spend on coffee.

I care about YOU.

Because…

This isn’t really about coffee.

How much I spend on coffee isn’t about coffee.

How much Dave Ramsey hates how much regular people spend on coffee, isn’t about coffee.

For you and me — it’s about luxury.

And that’s what it’s about for Dave, too.

But for Dave, he hates it. He thinks you don’t deserve it. You deserve sacrifice and discomfort. You deserve it until the very day that last cent of debt is paid off and you’re finally free. Then, and only then, have you earned an ounce of luxury.

For me, there IS a luxuriousness to coffee… Having someone else make it for you. Enjoying the flavors. Getting the boost of enjoy. Wiping up its spills with a pristine white hotel rag.

And coffee isn’t the only luxury.

On months where I spend $25 bucks on my bean subscription and not a penny more, I seek luxury in other areas. Streaming subscriptions. A video game. A new outfit.

Wants.

Not needs.

And you do it too. As you should.

Not everyone can afford luxuries. So we take them where we can get them — which usually ends up being food and drink.

Aubrey Gordon put it this way in a recent episode of Maintenance Phase:

Realistically, luxury exists on a sliding scale based on your income.

When you’re broke, your life IS sacrifice.

Luxuries should exist for everyone.

Coffee IS the poor man’s luxury.

But it’s also just a stand-in for luxury. If you don’t drink coffee, you can fill in the blank for any item you get regularly or sparingly that is not a need, but a love.

People with money love to project sacrifice onto people without it — as if sacrifice isn’t already their default. As if the people with money are where they are because of a $5 daily sacrifice.

If you truly value something, that’s enough reason to buy it.

Every budget you ever make needs to account for this.

Budget Bites

🚘 Bentleys: If you want to tell this guy to f*ck off…
🌎 Maps: You can do it with this data
✈️ Hot Take: $5 coffee. This jet. Both luxuries.
🐷 Oink oink: Little miss piggy, you go girl
🛍️ Please remember: You’re shopping bags

“Wait, I need MORE”

A couple things happening in the Meet Your Money world:

• More budget breakdowns and real talk on finances here on the newsletter & on socials. Completely free, always.

• Budget Club. Twice monthly. Currently at my house. With my friends. You’re not invited. (I hope to make this a recurring, free, online event soon… Stay tuned!)

• And coming soon — templates and 1:1 consulting time for those who need a little extra nudge.