The Latte Factor

The Latte Factor is a concept that basically states "your many small purchases will add up to a significant purchase if you avoided your fancy latte and saved that money up over time". I'm certainly not advocating giving up your morning cup of coffee by any means, because I love my morning cup of coffee. I'm asking you to evaluate how much you spend to get your morning cup of coffee. The majority of people probably own a coffee pot and use it on a daily basis, which is by far the most economical way to get your coffee every morning. Before I owned a coffee pot, I would visit either my local Starbucks or 7-Eleven for my morning fix.

For most of us, we own a coffee pot and purchase our supplies at the grocery store. Start-up costs to get your morning cup of coffee may seem pricey at first because of all the supplies involved, but it pays for itself in the longrun. Prior to my ownership of a coffee pot, I would visit Starbucks for their Grande White Chocolate Mocha which costs about $4 or purchase a 20oz coffee at 7-Eleven for about $0.95. The price difference between Starbucks and 7-Eleven is staggering, and the coffee does have a more sophisticated flavor at Starbucks, but in my opinion wasn't worth the three dollar price difference.

I finally decided to sit down and figure out just how much I was spending for my beloved coffee. Starbucks was really just an occasional treat because of it's price, and to simplify things we'll just say that Starbucks cost $4 and 7-Eleven is $1. All calculations are based on a 7-day week and 30 day month.

Starbucks for a week: $28
Starbucks for a month: $120
Starbucks for a year: $1460

7-Eleven for a week: $7
7-Eleven for a month: $30
7-Eleven for a year: $365

Most people wouldn't dream of purchasing the $4 latte at Starbucks for the entire year, but might not think twice about spending $1 on coffee at 7-Eleven because of the significant decrease in cost. Once the costs are in black and white, the 7-Eleven coffee drinkers may even rethink their $1 and opt instead for the simple enjoyment of coffee in their own home.