Coffee: big fat waste of money?

Keeping track of everyday spending can be useful, and there are all sorts of online calculators where you can work out how much your ‘sins’ and indulgences cost you. Interestingly, rather than looking at, say, cigarettes or excessive alcohol consumption, many personal finance writers have focused on takeaway coffees as something to keep a close eye on. Let’s turn a different cheeky/jaundiced eye onto it, just for fun.

It’s been suggested that giving up your daily coffee throughout your working life would save you megabucks, and if you invested that extra money wisely you might, with the aid of compound interest, end up with almost a million extra (usually worked out in dollars) for your pension pot at retirement.

All you need to do is buy a flask, make your own coffee at home and take it with you. Job done.

Interesting points I’ve taken from it:

•  We do often fritter away money on a daily basis, buying things we don’t really need.

• Often it’s just done out of habit, rather than a special, genuine love of something.

• It can add up to a significant sum over time, and this sum could be put to better use.

What I don’t buy into with this concept:

1. The sums of money don’t seem to add up. The lump sum doesn’t look right, and there’s no way that compound interest adds up in the UK financial environment, however clever you are at investing it.

Plus it doesn’t seem to take into account the cost of making your own coffee at home, the beans, the filter or the machine, and a flask, none of which tend to be one-off purchases over the course of a lifetime.

2. The meaning of the coffee also varies from individual to individual. Many times, buying the coffee is an investment of sorts:

• For some employees, it’s one of the few ways they can stay sane – a legitimate break from an unpleasant workplace or a shitty boss, a little fresh air, an excuse for a walk.

• For others, the caffeine is an energy boost so they don’t look like they’re tired, flagging, in need of a rest – keeping up appearances in the workplace again.

• Many freelancers are really buying time at a table when they go to coffee shops, so they can work or hold informal meetings.

• Going for coffee can have a social aspect if you visit with others, getting you in on vital office gossip, smoothing over rough patches, cementing working relationships and so on.

Is cutting out coffee a stupid idea?

There is a school of thought that says this: just earn more money, then you’ll be able to afford all the coffees you want, and save and invest too! Don’t deny yourself life’s simple pleasures, and so on.

Again, I see that increasing your income can be very beneficial for a number of reasons, however I don’t think the ‘just earn more’ idea is all that amazing either. It’s only looking at part of the equation, and at the same time it’s bloody hard for most people to earn more at the moment for a whole range of different reasons. Jobs are not plentiful, pay is not increasing in line with inflation, pensions are not looking rosy, just to mention a few examples. Not that you shouldn’t try to get a better job, it’s just that this isn’t an option that’s currently easily available to all and sundry.

Here’s my own way of looking at it

1. Firstly and most importantly, most takeaway coffee is shite in the UK. It’s overpriced, it’s crap quality, and it’s either watery milky rubbish or it’s burnt-tasting. Coffee sipped through a plastic hole or from a paper cup is not a great, delicious, transformative experience.

It’s a lot of money for something that’s not really a treat. If you don’t believe me, get over to an independent coffee shop with half an idea of what they’re doing, and drink some real grown-up coffee from a proper cup or a mug. It’s resoundingly better tasting and, interestingly, it’s usually cheaper too.

2. An alarming number of people don’t even taste the coffee, it’s their ‘lifestyle choice’. They think that walking into the office or along the street flashing a heavily logo-ed paper cup around makes them look hip. They think people will look up to them, admire them, accept them, think they’re cool. If you are one of these people, you’re a dickhead. Sorry, no nice way to get that out there. As we’ve already discussed above, nearly all UK takeaway coffee is shite, so all you’re really doing is broadcasting your lack of discernment, and your susceptibility to mass-market advertising.

3. Ultimately, here’s my take. It’s okay to have the occasional coffee in a paper cup, just as a pick-me-up or to meet with friends somewhere convenient, so long as you know it’s a bit of a compromise and provided you aren’t desperately waving a brand logo around in the hope of buying yourself some cool points (which will never be awarded to your account, trust me).

The rest of the time I try to have a good homemade coffee before I leave the house, or I take a few minutes to sit down every now and then and really enjoy a decent cup in a proper independent coffee place. My treats are real treats, I love and savour them. Flasks aren’t really my thing, I’ll be honest with you.

This way I spend far less over all, but I get a whole lot more coffee happiness and flavour for my money. It is definitely worth cutting back on some of your everyday latte-led frittering, but I’d rather be realistic and say it’s coffee in moderation rather than none at all, and look to make small cutbacks in other areas of my budget too.

What do you think?