It hit me one morning while staying in an Airbnb with my family in the west coast of Florida, I had forgotten my coffee percolator at home which I faithfully use in my morning routine. The percolator in the house was not going to deliver the caffeine dose required to deal with 2 kids full of energy, so I decided to go to a local starbucks for my morning brew. I started that week with a $20 dollar bill I found stashed in my wallet for an emergency situation, thinking it was going to be enough to buy morning coffee for the 4 days we were going to be there. When day #4 came I had a few quarters, dimes and pennies in my pocket, not even a single dollar, inflation is a bitch. I just realized how much money I was saving unknowingly by brewing my morning coffee. Made me look into the economics of it more closely.
Who knew something as simple as coffee, could make a world of a difference.
After some research I realized that brewing my own coffee, not only saves me $5-7 dollars from Starbucks every day, but also makes my morning structured. Structuring your morning not only makes it more productive but you also know what to expect. It takes 5 minutes for the coffee to be done, after which you can focus with work at home or tending to your family, compared to making the line at the coffee shop, driving and parking etc which could turn it into a 30 minute ordeal.
Breaking down the coffee economics - brewing your own coffee costs you an average of $0.56 cents per day (Coffee package at my local supermarket goes for $2.83 and lasts for 1 week) compare this with Starbucks, which goes for $42.00 per week (avg $6 per day x 7 days = $42.00), this small thing, brewing your own coffee at home will net you $168.00 per month and $2016.00 per year in savings. If you would invest that money annually in VTSAX at a compounded ~6% average annual return over 10 years it just became $31,778.00 (it usually has a higher return but making it average for arguments sake).
The habits which you become accustomed to, will dictate your financial success.
This same thought process can be applied to almost anything you can think of, just do the math and stay focused.
Try to detach from the consumerism mentality, ask yourself, Do I need this? or Do I want this? There is a big difference from wanting and needing.
Till next time.
JL
Disclaimer - This blog is meant purely for educational discussion of finance. It contains only general information about financial matters. It is not financial advice, and it should not be treated as such.