Coffee or Investments? (Tip: You can have both)

We’ve all heard that one savings tip. You know, the one that tells you not to buy your morning grande hazelnut cappuccino and instead save that money. Now, if you don’t like coffee that much, then this might be a realistic way for you to up your savings game. But if you’re a coffeeholic (like many Bondorians), this might not be the best way to increase your savings and investments. But let’s look, shall we? Can you have your morning coffee and a good investment? Or will you have to cut back on the beans to increase your bucks?

Starbucks – Can cancelling your coffee increase your savings?
Starbucks – Can cancelling your coffee increase your savings?

Let’s do the math

To see if there’s any truth to the coffee saving rule, we must first do the math. Let’s say you buy a regular cappuccino on your way to work every day. At €3 per coffee, you’ll spend €15 per week, which leads to €60 per month and €720 per year. Now, let’s see what would happen if you invested that €720 with Go & Grow for five years.

You can do your own calculations here.
You can do your own calculations here.

Over five years, you would have earned 40% interest of what you initially invested. Think about that for a second. If you gave up your store-bought coffee for one year, you could have over €1,000 after investing it for five years.

For the fun of it, let’s say you’ll give up your cappuccino for five years and deposit the money you would have spent into your Go & Grow investment. So that’s adding €60 extra each month for five years:

You can do your own calculations here.
You can do your own calculations here.

Now you’d make nearly €1,000 in interest over those five years – resulting in over €5,275 in total investment value. You’ll have a lot more to show in the long run than just empty takeaway coffee cups. And if you add this ‘coffee investment’ to your other, already existing investments, it can end up making a grande difference.

So, there’s no disputing that the coffee saving rule is real, and it can help boost your investment strategy.

But how do you give up coffee for a year?

Well, the great thing about this coffee saving rule is that you don’t have to give up coffee entirely – you’re just not going to buy a flat white from the coffee shop and instead brew your own coffee at home.

Buying whole coffee beans, ground filter coffee, or even instant coffee is a lot cheaper than buying a cappuccino every morning. So, by brewing your coffee on your way to work, you’ll still get your buzz and keep your bucks.

But I like my frothy double shot latte

We thought you might say that 😉 If you’re under forty, you can probably *not deal* before you’ve had your morning cuppa. And you can probably justify why your €3 coffee is essential to your happiness, creativity, etc.

And that’s OK. If that coffee helps you to start your day on a positive note, then that’s great. Studies show that 48% of millennials had a gourmet coffee in the last 24 hours. And because millennials cherish life experiences over almost anything else, it’s no wonder that indulging in a fancy brew every morning is part of their routine.

Gourmet coffees have become part of the young working-class' lifestyle.
Gourmet coffees have become part of the young working-class’ lifestyle.

But is it worth it?

This depends entirely on you. You’ve seen the math, and you know it works. But if that visit to the coffee shop makes you happy, who are we to say you should stop doing it? But perhaps do it a little smarter. Go every other day or twice a week instead of every day. But if you can’t sacrifice your morning cuppa, you’ll need to prioritize saving somewhere else.

And that’s the thinking behind the coffee saving rule. It would be best to stop spending money on something you don’t really need and prioritize saving and investing for the future. Changing your mentality to only buy more of what you need and less of what you want can improve your saving and spending habits simultaneously.

It doesn’t have to be coffee, but because the world loves these magic beans, it’s a great example that’s relatable to almost everyone. Perhaps you can go out less, spend less money on takeout and more time cooking at home. Or maybe you can stop buying the latest electronic gadgets you know you don’t really need, or cancel an old magazine subscription, etc. Don’t know where to save? You can get some inspiration on where to cut unnecessary costs here.

When you add up €3 coffees, it either becomes a significant loss or a big investment.
When you add up €3 coffees, it either becomes a significant loss or a big investment.

Time to wake up and smell the savings

If you think you’re spending a lot of money on coffee, then you probably are. But it’s up to you to decide whether it’s worth it or not. If it is, then go forth and enjoy your frothy latte. But while you’re sipping on your favorite cuppa, identify another area in your spending habits where you can cut back and focus on saving and investing. And if you can’t stand that you’re wasting money on coffee instead of your financial future, then it’s time to grind and save!

Are you going to try the coffee saving rule? Share this article with a fellow coffeeholic and challenge them to do the same.

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