HomeBlogAbout UsWorkContentContact Us
 
 Advertisement 

Lifetime coffee spend

How much do you spend on coffee?

How much do you really spend on coffee?

Over your lifetime, it’s probably more than you think.

As we will see, compounding interest (and loss of opportunity) build up over time …

How many days a week do you consume a premium beverage?

Everyday? Every weekday?

All those super-dooper-latté-mocha-frapa-iced-soy-crema-chinos (with whip) add up …

If your favorite beverage costs you $2.45 and you buy one every workday, that’s 5 x $2.45 every week, or $12.25.

There are (approximately) 52 weeks in a year, so over the course of a year, this adds up to almost $640.

If, instead of spending this money on coffee, you saved the money in a piggy-bank and, at the end of the year, deposited this money in the bank you’d build up a little nest-egg which, on subsequent years, would also bring you interest income.

(I’m ignoring any inflation effects to keep the calculations simple; we’re assuming a fixed value dollar. I’m also ignoring any tax implications related to the interest and, in the pursuit of a simple calculation, interest is only calculated once a year).

Assuming an annual interest rate of 2.1%, and you buy a daily coffee on every workday from when you start work at 18, until retirement at 65 (47 working years), instead of coffee you could have saved over fifty thousand dollars!

(With a coffee costing $2.45 per drink)

If you consume a coffee on the weekends too, this saving increases to just over $70,500!

Using the tool below, you can experiment with the effect of adjusting the various parameters.

Spend per year

Use the sliders (or the buttons at the end) to try out various figures, then click the  Update  button to update the table.

Years:
##
Days/wk:
##
Price:
##
Interest:
##

 

 

More Examples

I’m not picking on coffee in particular. The purpose of this exercise was to show about compounding interest and opportunity costs. It’s just as valid to use this argument about other things you consume on a regular basis. Do you drink a can of soda a few times a week? How about a daily doughnut, candybar or other kind of treat? What about haircuts, manicures, waxing, movies or beer?

Or that mortgage payment …

 

You can find a complete list of all the articles here.      Click here to receive email alerts on new articles.

© 2009-2013 DataGenetics    Privacy Policy