Many years ago I remember a work colleague going on an “economy drive” saying that she was horrified when she realized how much she was spending on her daily coffees and lunches at work. Our workplace at that time had a coffee shop, cafe or restaurant in each of the 3 connected buildings we occupied where we could get nice barista made coffees and snacks and many people (like my colleague) were down there several times a day.
As a cost saving exercise the company had to change the vending machines over to charge a small price rather than free so some people began to become more aware of how much they were spending and started looking at ways to save. (Most resorted to making their own in the kitchen)
Having spent most of my working life in finance, budgeting and corporate planning; cost analysis is well ingrained in me and one of the first rules of budgeting and saving money is to understand what your current costs are.
When I was made redundant and had to sit down and re-assess our expenditure and greatly reduced income, I was stunned to realize (although I subconsciously knew) how much I had been spending on my lunches, coffees etc and the costs of going to work and how much I could save.
I enjoy a TV program called “Superscrimpers” where they share lots of useful tips on how to save money, recycle and avoid waste. They also show a family that is struggling with their expenditure and help them get back in control. One of the techniques they use to help people understand their expenditure is Annualization.
Annualization in this context is simply taking your daily or weekly expenditure on an item and multiplying it up to calculate your annual expenditure. In the TV program they show all the takeaways piled up or dustbins filled with wasted food with the estimated costs to which there is usually a horrified reaction.
I used the “daily coffee” as an example of this when doing my tutorial practice while on a college course and it was interesting to see the “penny drop” on my fellow students faces when they too realized how this simple method could help them manage their finances and prioritize where they wanted to spend their hard earned cash.
The example I used was to say “How many of you buy a coffee on the way to work or nip out for one at lunchtime” (we all did at break time) Most did this and with the average costs being around £2.50 per coffee, I asked them to work out what the annual cost of that daily coffee was (£2.50 x 5 = £12.50 a week x (say) 50 weeks = £600 a year for one coffee a day). “I could have a holiday for that!” was the reaction and imagine how much it adds up to if you regularly have more than one.
If you are wanting to try and save money, the same method can be applied to all your daily expenditure by starting to write down for a week or two (perhaps a whole month) everything you spend. This will then give you an idea of where your money is going and help you identify if there is anything that you would rather divert your money to (like a holiday)
The “Superscrimpers” advice on this would be to make up a flask and take it with you and take your lunch in to work with you rather than pay the inflated prices for ready made sandwiches, but this is one of the rare occasions where I will suggest you might consider spending some money to save.
If you are someone who really cannot function in the morning without your espresso, cappuccino, latte or however you like your coffee, then it may pay you to invest in one of those coffee maker machines. Look at the different machines available and how much the pods or whatever coffee insert they use costs and work out how much the annual costs would be to take your morning coffee out with you along with a good travel mug. The machine should last more than a year so you could spread the cost of that over 2 to 3 years. You are likely to find that this is a cheaper long term option as long as you are “good” and get into this habit. My only caution on this is that personally I am wary of these different machines as sometimes you get “locked in” into buying one particular product which they then take off the market and you then end up having to buy another machine as you can no longer get the refills for it. If you decide to go for it then you could always ask friends or family to give you gift vouchers towards one if you have a birthday or other event coming up (Christmas is not too far away)
There are now some very nice instant coffees which have that more expensive taste where I just simply make up a flask or use my travel mug.
If you prefer to continue “going out” for a coffee then some of the coffee chains give you a discount for using your own mug and also have loyalty schemes where you can accumulate points for rewards, discounts and free coffees.