Are you really wasting money when you go out and buy coffee? Are some of the benefits overlooked when we critique discretionary spending, I think so?
By: Allan R Kirby
I will agree that when comes to your financial priorities, why spend money on coffee when you can make it significantly cheaper at home? It makes sense and many financial professionals have also highlighted this spending wastage such as the one found on CNBC. In fact these articles not only highlighting the benefits of making your own coffee, they show you the accumulative savings you could obtain by making this change, although, some of the numbers floating around are a stretch in my opinion. So is this true? I decided to ask around and see what people think of this advice and I was a little surprised with the responses.
“When it comes to financial priorities, we do need to spend a little on ourselves, Sometimes its not just about the coffee, its the experience”
I Really Missed the Obvious
I recently decided to ask a few people their views on buying coffee, tea, muffins etc... the question was simple, would it not be better to just bring your own food and skip going to the coffee shop. Yes it is more convenient, but I explained that you would save money and help achieve your financial goals. It's a no-brainer right; well, wrong!
First, experts missed one of the obvious elements from my discussion with others. Sometimes, it's less about the coffee and more about getting together with friends and coworkers to connect and socialize. This is something important to many and agreeably much needed in the age of technology; encountering actual human contact instead of texting. As one person explained, it's a way to engage and discuss current events in a relaxing environment and allows them to de-stress, I would chalk this up as improved mental health.
Secondly, as one pointed out, it was a way to go out without having to spend a fortune at a restaurant. Yes, they would spend a few dollars buying coffee, but going out to a coffee shop pales in comparison to eating out, which in some cases ends up costing significantly more. Therefore, for them, there is more value going out for a coffee a couple of times a week than going to a restaurant once a week.
Finally, to some, it is one of the few luxuries where the benefits outweigh the costs, regardless of the possible accumulated savings. Plus, to realize the actual returns, you would have to be very disciplined in saving the money and have very good investment returns to achieve the million dollars that some experts think you can achieve. I do not think it's realistic.
Value of Discretionary spending differs from person to person
Look, even though I missed some of the benefits when critiquing discretionary spending. I still believe there is truth in changing your habits to help save money. It just should not come at a cost that affects other aspects of your life such as mental health. So, if you feel the benefits outweigh the costs, by all means do what you feel is in your best interests. When it comes to discretionary spending it can be a dilemma, even when looking at simply buying coffee. Everyone places a different value on the items they buy, to some eating out is important, regardless of cost while others see more value in buying coffee.
Good luck and happy drinking if you so choose.
This is a MySmallBank.com blog written by Allan Kirby, who writes and produces Personal Finance articles and videos.