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Can Cutting Out To-Go Coffee Really Make A Difference?

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I’ve heard many a criticism that cutting out your daily to-go cup of coffee alone will not help pay off your student loans. On the surface, that may be true and I empathize with this sentiment. It may be that the advice to make your coffee at home has been shoved down our throats by personal finance writers for so long, that it feels outdated.
That reaction however, is what inspired me to challenge that.
What if that old piece of advice had a little truth to it after all?
Now, the only situation I could analyze was my own. So my findings may or may not apply to your situation. That’s what makes personal finance personal – it’s unique to everyone.
The Details
Every day, I drink a medium roast coffee with French Vanilla flavoring. In the interest of full disclosure, I picked up the daily coffee habit when we relocated to Minnesota.
I already own a very basic coffee maker. It maybe cost $20 in 2011, and it’s still completely functional.
My to-go Starbucks Venti Pike Roast costs $3.16.
Purchased every day, this costs $1,153.40 a year.

 (Vest and Tee | Old Navy; similar vests here and here; J.Crew Necklace)

For this experiment, I went one step further and traded my bag of Starbucks grounds for Folgers.
A 12-oz bag of Starbucks Pike Roast costs $8.49 at my local grocery store. I’d have to purchase a bag a week, which added up to $407.52 a year.
I traded for a 30.5-ounce bin of Folgers Classic Roast that costs $7.59 at my grocery store, and can make it last for an entire month. Yes, I do notice a difference in taste, but considering this is the means to an end, it’s worth it. My annual expenditure for this at-home coffee is $91.08.
Total annual savings just by switching from Starbucks to Folgers, $316.44.
Which means the total coffee-related savings is: $1,469.84. (This figure does not include the creamer I purchase to add to my at-home coffee.)

(Zebra Mug | World Market; similar here and here)
What Can You Do With This?

Obviously, $1,469.84 isn’t a life-changing dollar amount. But you can still do a lot with it, which I think is the point the personal writers were trying to make:

1. Put It Towards Unforeseen Expenses. It would mean the difference between a credit card balance, and not having to stress when a car breaks down.

2. Build Your Emergency Fund. If you’re following Dave Ramsey’s 7 Baby Steps, simply cutting out coffee for a year would achieve your $1,000 emergency fund. Yes, it would take a year, but I also believe it’s important to step away from “get rich quick” schemes. Building wealth, paying off debt – they’re slow processes for a reason. Time is your ally here.

3. Travel. By simply replacing a daily Starbucks to-go coffee with a Folgers at-home cup, you could take your family on a weekend getaway. At brief glimpse on-line shows it's possible to purchase round-trip tickets to Europe for $1,400 or less.

4. Start Snowballing Your Debt. You could apply that savings towards a lower balance debt, and start snowballing your way to financial freedom (which was the inspiration behind this post in the first place). $1,400 is a wonderful start to that endeavor.

5. Earn Compounding Interest. You could open a CD ladder, and watch your to-go coffee turn into something really special. 

The key of course, is to make sure you are actively reallocating your coffee savings away from your checking account. 

In the end, I think it’s important to change your perspective and thought process. Sure your main goal may be to Pay Off Student Loans, but you need to set smaller, more attainable goals to contribute to it. In defense of the personal finance writers, you can create a jump start for yourself with one simple change. 

You can try anything for a year, right?

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