It’s cliched to say all you have to do to become a millionaire is throw away your unused latte lounge memberships, invest in the stock market and sit for 30 years. saving for retirementIt, like most things in life, requires hard work and discipline. But there are two important nuggets of truth in those old cliches. It’s usually the small changes in your habits that last the longest, and compound interest It is a great tool.
So in celebration of National Coffee Day, let’s take a look at how making coffee at home can help you get closer to your million-dollar savings goal.
How does buying a coffee bundle in your spending for joy?
The first thing to ask yourself is how much joy coffee brings to your life. Then you can think about the coffee you enjoy. Is it energy from caffeine? A specific flavor or experience? The act of being social with others? This will help you make the decision
- If you crave caffeine but don’t need a fancy cup of coffee to brighten up your day, consider brewing it at home or cutting it out of your life.
- If it’s average, maybe you can find ways to balance how you treat yourself versus how often you pick up a latte. You can kick the habit twice a week – maybe reward yourself on Monday for starting the week and Friday for ending the week!
- If coffee brings you a lot of joy, maybe it’s best to cut back on the other things. After all, the whole point of budgeting is to save money on the things you don’t find important so that you still have money to spend on the things that matter to you.
mint has Worksheets that allow you to compare your spending In different categories to the level of joy you feel from this spending. This can help you determine if your budget is calibrated for the things that generally bring you the most happiness.
How to turn your daily cup of coffee into a small investment
Can you turn your coffee habit into a savings habit? Debit cards and a small investment may automatically help you get the best of both worlds. micro investment It allows you to invest in very small increments by buying fractional shares. This type of investment helps maximize your money’s growth potential, so instead of putting your money in a bank account with no loss of value over time, a small investment can help give your money a chance to increase inflation and retain or grow in value. Recently, small investment applications such as oak tree fruit It has grown in popularity by allowing users to easily invest and save starting with incremental change.
One of the features of Acorns is the ability to round up your purchases to the next full dollar and invest the difference. When you sign up for the Acorns Round-Ups® feature, the backup change is automatically invested in a diversified ETF portfolio. This can be a great way to invest a small amount on a consistent basis and help build good financial habits. Acorns also gives an additional investment when you shop with one of its brand partners, including Bulletproof Coffee, Peet’s and Coffee BeanAnd So you can save and invest more. Subscribe to Acorns here To get a $10 bonus investment when you get started.
How much can you make from investing your coffee money?
So what does the actual math look like for doubling your coffee money in the stock market until you retire? While there are a lot of different variables involved, here are two examples.
Example 1: Ditch your fancy latte
- $4 a day of coffee – replace it with something (drink water instead)
- 20 cups of coffee a month
- 8% average annual return on investment
After 40 years, your coffee money has turned into $248,694.26! It’s not enough to make you a millionaire, but you’re on the right track.
Example 2: Rounding
- 30 debit card transactions per month
- Average of 50 cents from the round invested per transaction.
- 8% average annual return on investment
after, after 40 yearsRounding up all your transactions each month netted you $46630.17. Not bad for a spare you probably didn’t miss.
Although none of these scenarios are likely to solve all of your retirement needs, that’s not their goal. Instead, plans like these allow you to be more focused on where your money is going and where you want it.
Coffee is something many people drink on a daily basis and there are a large variety of different ways (and costs) to drink your coffee. Even if you don’t drink coffee, you may have other similar habits in your life – tea, soda, a daily afternoon snack, or regular lunches outside. None of these things necessarily have to be bad — instead, you just want to make sure that your spending aligns with your overall life priorities. Using an app like Mint can help you review your spending regularly and make sure that it helps you get where you want to go.
Dan Miller (76 posts)
Dan Miller is a freelance writer and founder of PointsWithACrew.com, a site that helps families travel free/cheap. His main base is in Cincinnati, but he tries to travel around the world as much as possible with his wife and six children.