Let’s think about the “Starbucks factor” of our budgets.
Is your “Starbucks factor” a small price to pay for your cafe habit? Is watching other people on their laptops the highlight of your day? Does scoring the big, comfy seat with the least repulsive stains make you feel like a winner? Do you curate a collection of cups with your name misspelled? Perhaps the mere thought of giving up highly-caffeinated Starbucks favorites leaves you whimpering for hours in the fetal position.
If the convenience and/or experience of your cafe visit improves your life, don’t worry about your Starbucks factor.
On the other hand, if your daily cafe visit feels like an “I’m still alive tax,” and you just want your caffeinated treat, think about trimming coffee costs. This post explores the cumulative cost of your “Starbucks factor” and offers solutions for trimming coffee costs by making great coffee, espresso, and cappuccino at home.
The result of trimming coffee costs and saving your Starbucks factor
Some personal finance gurus use the term “Starbucks factor” in reference to recurring, trivial, voluntary expenses. This is an apt term, since cafe spending is habitual and seemingly low cost. These costs are not trivial when examined closely.
How can your “Starbucks factor” add up?
Let’s follow a hypothetical example where an individual spends an average of $20 a week ($2.86 a day) on their Starbucks factor. In this example the person switches to making their own caffeinated treat at a cost of $5 a week, for a net savings of $15 a week.
How much might this person amass after ten years of trimming coffee costs?
$7,800 (burying the money in the back yard)
$8,216.28 (putting it in a savings account [Barclay Online 1.15%])
$11,850.49 (investing in a low-fee index fund [9%])
Note: 9% is slightly lower than the S&P 500 historical average since its inception in 1928. This chart does not account for fees or capital gains tax. On the other hand, it does not include dividend payments. Investing is always a risk, but index funds diversify your investment so that you are essentially investing in the economy as a whole.
Now, let’s see what your Starbucks factor could really do.
If you saved the same $15 a week by trimming coffee costs for thirty years, it is likely that you will have about $106,319.88. The chart below illustrates just how much of this total comes from the interest. Of course, this projection is based on historical averages, and investing always includes risk.
Trim coffee costs without sacrifice.
Cutting your Starbucks factor does not mean accepting sub-par coffee (Heaven forbid!). To make great tasting cafe treats at home, look to the past. Forget about big, expensive machines; you don’t even need electricity.
Freshly-ground is better
I can taste the difference when I grind the beans fresh. You can buy whole bean coffee in larger amounts (saving money) because of its shelf stability. A manual mill really doesn’t take too long if it is properly adjusted. Make sure that the grind is adjusted for the brewing method that you employ.
Use a French press to keep standards high when trimming coffee costs.
French presses are fast (4 minutes of heating and 4 minutes of brewing), cheap, small, easy, durable, and make great coffee. I microwave the water in a big Pyrex cup for speed. I Keep a larger French press around for company and Sunday mornings.
Since there is no heating element (like on a drip coffee maker), I recommend getting French presses that are vacuum insulated. The presses shown (one glass and one steel) keep coffee hot for an hour or so without scorching the precious contents.
Trim coffee costs by making espresso / cappuccino like Nonna Scungilli did.
Stove-top espresso makers are great for trimming coffee costs; they take up very little space and come in a variety of sizes. If you want to make cappuccino, heat up some milk while the espresso maker is working. Hit the milk with an inexpensive whipper thingy, and spoon on the foamy goodness. You can add all of the steamed milk to make it latte style.
Cutting your Starbucks factor: Make mine to go.
If you need your treat to go, you can’t beat vacuum insulated containers. Pre-treat your container with cold or hot water for best results. Also, the larger the volume the longer it will maintain temperature, so you have a good excuse for over-caffeinating.
Conclusion on trimming your coffee costs
There is nothing at Starbucks that you cannot make cheaply at home. You may need ice, syrups, spices, etc. to make your favorites, but a little research and experimentation go a long way. Making your own caffeinated treats takes a bit of effort, but it is enjoyable and trims your coffee costs.
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Any hot Starbucks hacks to share?
What is your coffee system?