I love Starbucks. Love the personalization (Venti Soy Chai, Extra Hot, No Foam). Love that you can hang out. Love that the employees always seem to be one step ahead of my order. They get it.
However, there's a price to this luxury. I figure that my habit is going to/has cost me over $1,000 a year.
$1,000 a year. Wow. I can get some pretty cool stuff with that grand. In fact, if I just invested the $85 a month that I probably spend (not counting my wife's occasional Grande Carmel Macchiato or the occasional kid's hot chocolate) in my kids college fund, I'd have an additional $12,500 by the time my oldest went off to college.
What's my opportunity cost of not "enjoying" this treat? This got me thinking...
What are all of the small $2 - $10 weekly purchases that add up? I used to be a micromanaging Money software "machine". I would track every single purchase, including my cash "wallet" purchases.
I think its time to get back to the basics and make sure my kids will have enough for books in college.
I'll do that, right after I finish my Venti Soy Chai, Extra Hot, No Foam.
Is there an outpatient clinic to break this addiction?
It's the little buys that always seem to get us, huh? While I debate over whether to go ahead and pick up that big screen TV or a sweet home theater system, I too, tend to weigh them against more important things like saving for the kid's college. Ah, but that grande latte...who's going to miss a couple of bucks?
Perhaps Starbucks ought to offer an investment service right in their shops. When we buy our latte or other indulgence, we can automatically have them take a buck or two and insert it into our savings account. A good cup of coffee and none of the guilt...
Posted by: Christopher Bailey | Friday, January 14, 2005 at 05:49 AM
It definately comes down to the little things! I like the investment idea, but something tells me Starbucks would rather have that extra dollar or two!
CD? Biscotti? Stick of gum? $1 peppermint stick?
Todd
Posted by: K. Todd Storch | Friday, January 14, 2005 at 07:31 AM
Opportunity cost 'lost'...personal happiness. I think the fear of not providing is sometimes driven by perception vs reality. Keep enjoying those Venti Soy Chai's, Exra Hot, No Foam
Posted by: Ray Phillips | Friday, January 14, 2005 at 03:10 PM
Ray,
I hear you brother! However, with my 3 kids, its amazing how you think this way.
Yeah Chai.
Todd
Posted by: K. Todd Storch | Friday, January 14, 2005 at 03:33 PM
A little off-topic Todd, but that's a great title for your post ... you and Terry really are the Google search kings aren't you ...
David Bach talks about this - he calls it the latte factor - in his Automatic Millionaire book. He got me thinking, and the next time I was at Costco I picked up a can of that Caffe D'Vita Mocha Cappuccino mix for those days that I would be in and out of SB anyway and not take advantage of the experience. But for those other days, it is worth giving them your money.
Maybe you can think of it this way: those SB kids who as you say, "get it" --- you're probably helping put them through college too:-)
Share the aloha!
Posted by: Rosa | Friday, January 14, 2005 at 04:33 PM
Take it from me, book money is chump change. Tuition is what'll break you...go work for a university, get free tuition for the kids and spend their college fund on a trip to visit Rosa! :-)
Posted by: Bren | Friday, January 14, 2005 at 11:54 PM
Rosa,
I know, I know! As Editor, I was fine with my post because of the thoughts angle!
Bren, good point! Why don't you give me a job and I'll work with you via the Internet from my home? Ha!
Ah...Hawaii! My wife and I were there a year and a half ago for our 10 year anniversary and there's a part of us that never left...
Todd
Posted by: K. Todd Storch | Saturday, January 15, 2005 at 05:35 AM
I have an unbreakable caffeine habit and I love the lattes! As you point out, a visit to Starbucks is a cheap luxury, that mounts up over time.
I have gone back to using my Starbucks expresso machine on a daily basis. Since my wife and I both work at home, that saves us about $50 a week and gives us some time together in the middle of our busy work day.
When you work at home, there is always a way to cut costs and turn the exercise into a positive experience. It isn't a case of depriving yourself either. One has to shuck off the corporate/credit card mentality and look at everythiing from the standpoint of, "is spending this money going to bring me more business or save me time so I can bring in new business?"
Once you play at that game for awhile, expenditures tend to sort themselves out nicely.
Posted by: David St Lawrence | Saturday, March 26, 2005 at 05:11 PM
David,
Excellent point on your "ROI" litmus test! I like that you are able to tie this back into spending more time with a loved one as well.
Todd
Posted by: K. Todd Storch | Sunday, March 27, 2005 at 08:31 PM
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