Creating a habit of saving is hard, really hard.It requires discipline and few people enjoy discipline.But your daily disciplines (or lack thereof) can have a profound impact on your future.
Consider the daily latte.The average medium latte at Starbucks costs $3.65 assuming you don’t “doctor” it up with extra flavors, different milks, etc. That cost is pre-tax. We know that $3.65 can add up, but what does it add up to?Let’s look at some simple math behind a latte habit.The chart below illustrates the future value of that cup of coffee, depending on your consumption.
$58,279.27. That’s what one latte a day could cost you over the course of 20 years.That’s a big number.
But in spite of my financial advisor background, I’m not going to recommend you cut coffee out altogether. Coffee shops are often about more than just a cup of coffee.They are an experience and experiences are valuable.Like all things in life, you must strike a balance.But, I will encourage you to switch it up a little bit in an effort to save some money. Consider these cheaper options:
Option 1 : Opt for a medium fresh brewed coffee.If you go every day, making this simple change could potentially net you $24,748 over a 20 year period using the same calculations from the table above.
Option 2:If you must have the espresso, opt for the medium Americano instead.You still get two shots of espresso, and if you need a little cream add some half n’ half.It’s free.If you go every day, making this simple change could potentially net you $15,966 over a 20 year period using the same calculations from the table above.Not bad for getting the same two shots of espresso every day.
Saving money doesn’t have to be complex.There are a lot of little tweaks you can use every day to move you closer to your long term financial goals, all while still enjoying the gift of life today.
Looking for more creative ways to strike the balance between enjoying today and preparing for tomorrow?Give us a call.We have helped thousands of households find this balance through thorough planning, analysis, and investment strategies and we’d welcome a coffee shop conversation with you as well.The first cup is on me.
Brannon is a financial advisor with LPL Financial and also serves as the team’s wealth manager. He joined Prosperion Financial Advisors in 2004. In addition to being a Certified Financial Planner® (CFP) and an Accredited Portfolio Management Advisor®, Brannon has a Master’s degree in Leadership from Denver Seminary. He is passionate about helping clients make wise, informed, investment and financial planning decisions. He is married to the love of his life, Melanie, and is the proud father of his son, William. When not working with clients or spending time with family, Brannon enjoys being in the outdoors of the Colorado high country, skiing, fly fishing, and exploring wild country.
As investors, we seek to understand and control compound interest. Like the knife, when used correctly, compound interest is a powerful tool. Even better, the three variables behind compound interest can be put to work for anyone, regardless of income or amount saved.