5 ms·

Except they're wrong. Over the life of a car, a $5/day starbucks habit can cost more than the difference between buying a new vs used car. If you keep your ca

by sbov 8y ago

Except they're wrong. Over the life of a car, a $5/day starbucks habit can cost more than the difference between buying a new vs used car. If you keep your car for 10 years, $5/day is $18k. Our current cars are 13 years, and 17 years old.

wernercd 8y ago
Why aren't they BOTH wrong? Save $5/day AND $18/k over ten years? Compound daily the both of em... Or don't... each direction has pro's and con's.
projektir 8y ago
> Over the life of a car, a $5/day starbucks habit can cost more than the difference between buying a new vs used car. Does this statement not express the concept? One decision (buying new vs used) can completely wipe out any benefit you got from buying Starbucks every day, for 10 years. That's a very long time.
Retric 8y ago
Buying a new SUV every 3 years and paying taxes on every transaction quickly get's to vastly more than 18k/decade. Remember, you can change both car type and new vs used. New mid range SUV's can easily end up costing more than 100,000$ over a decade. Even cars can get insane. I just watched a view on a guy who spent 28,000$ owning an Aston Martin for 10 MONTHS. https://www.youtube.com/watch?v=hrrFAjxKtj0 https://www.youtube.com/watch?v=hrrFAjxKtj0
dgacmu 8y ago
+this. High savings is made from a collection of good habits (or avoided pitfalls), not just one. It's easy to spend 36k over 10 years on lunch+coffee ($10/day). It's easy to spend 36k on a car that you will use for 10 years. Same ballpark, same opportunity for optimization.
- peckrob 8y ago
  > High savings is made from a collection of good habits (or avoided pitfalls), not just one. Correct. The whole point of the "stop buying lunch out every day" is not to never do it, but to develop good financial habits and to show you that small changes, taken over a long period, pay off. I bring my lunch almost every day. I actually do it because it is one less thing I have to think about during the day (having to decide where to go and then either walk or drive there). But the numbers pay off too. Assuming $10 a day for lunch, that's $50 a week or $2,600 a year. The cost of bread, lunch meat, condiments, etc is about $10 a week for me or $520 a year. You save more than $2k a year by not eating out every day. For most people, that is not an insignificant amount of money. That's enough for a nice little vacation. Now, you actual amount will be less, because everyone splurges occasionally. But little vampire costs like daily lunches or coffees do add up and if you look around your life there are probably a lot more of them than you realize. Should people not buy stupidly expensive cars they likely cannot afford? Yup. But that doesn't negate the broader point that people should look at the larger financial picture.
ellisv 8y ago
This article [1] was the top google result when I searched "average car ownership length". It reports 79.3 months is the average length that Americans own a vehicle, so a little more than 6 and 1/2 years. Paying more for a vehicle makes sense if you own it longer (or otherwise get more value out of it). I think the problem is that people both buy $5 coffee/day AND buy large, expensive to own and maintain vehicles AND replace those vehicles too often. [1] https://www.cnbc.com/2017/05/28/car-owners-are-holding-their-vehicles-for-longer-which-is-both-good-and-bad.html https://www.cnbc.com/2017/05/28/car-owners-are-holding-their...
watwut 8y ago
That is of course assuming that you will really buy Starbucks coffee every day and will not stop for 10 years. Which is kind of made up situation.
wonthegame 8y ago
But who is spending $5/day everyday at Starbucks? $5 * 365days * 10yrs = $18,250 Full time work is approximately 71% of the year, 260 days. $5 * 260 * 10yrs = $13,000 Still a lot of money. A regular coffee at Starbucks is less than half that - $2.15 A more reasonable number would be $5000-6000 over 10 years if we're going to say "a coffee a day at Starbucks" is the difference between new and used.
- pwinnski 8y ago
  My daughter works at Starbucks. The answer is: many people, many more than you think until you're there every day seeing them. And it's $4-7 coffee-based drinks.
- loco5niner 8y ago
  > A regular coffee at Starbucks is less than half that - $2.15 What percentage of people order a regular coffee at Starbucks? Not many, I'm sure.
  - mh8h 8y ago
    If you order the regular coffee you get it right away, pretty much while you are paying. The fact that most of the people you see waiting are the ones who ordered the fancier drinks is because of selection bias.
  - masonic 8y ago
    Pro tip: their dark/specialty roasts for which they have a sign up (and often have ready to go mornings) can be had as a pourover for no extra charge. (Don't let them upsell you to the Clover). I don't like their basic Pike's roast. There is an elementary school down the street from the local Starbucks. After school, kids by the dozens routinely buy $4-7 drinks, especially iced.
abrahamepton 8y ago
Another way to put that would be to say that if you buy used instead of new, you can treat yourself to a $5 coffee every goddamn day (who does that!? even on weekends?!). There's nothing wrong with having good personal discipline, but the notion that you can scrimp your way to wealth by eschewing $5 daily coffees is absurd. Not to mention, that's $5 daily coffees and...nothing else, as there's usually not a second thing you can cut back on in these preposterous examples, and once you've cut back the coffee once, that's it. One final thought: often the people who say this have zero experience with actually living close to the poverty line. A cheap, unhealthy, delicious indulgence on the daily can make living with less feel much more palatable - or at least, suck less hard. It's not "disciplined" but it'd be a hell of a lot easier for me to be disciplined with my fancy life full of excess.
- throwawayjava 8y ago
  > you can treat yourself to a $5 coffee every goddamn day (who does that!? even on weekends?!). It's not a $5 daily coffee, it's 2 or 3 $2 coffees. 2 reasonably priced coffees isn't so insane if your workplace doesn't have a machine and won't let you donate one. > One final thought: often the people who say this have zero experience with actually living close to the poverty line. A cheap, unhealthy, delicious indulgence on the daily can make living with less feel much more palatable - or at least, suck less hard. THIS. I spent five years in poverty. Sometimes actually, sometimes just above the line. Always worried about making rent. Eschewing a twice-weekly visit to the coffee shop is a LOT easier, psychologically, when it's not "my only reprieve from eating shitty food in a shitty apartment and still worrying about how we'll pay the grocery bills and rent". And I had the benefiting of knowing that the situation was temporary and it could all be over the moment I decided I had had enough. And a great parental safety net that saved me from the credit card debt treadmill more than once. I can't imagine how bleak things are existing like that with no safety and knowing you don't have an out.
  - pwinnski 8y ago
    My daughter works at Starbucks. There is a shocking (to me) contingent of people who do indeed order $4-7 coffee-based drinks daily. She sees the same people every day. It's mind-bending to me, but clearly normal for many.
Gibbon1 8y ago
When my GF was out of work after 2008 I would give her a couple of dollars to go hang out at the coffee shop every morning with her friends. Because she needed that to a) stay sane. b) pick up occasional side jobs. Operationally there is zero difference between a new and used car. One thing about cars, price is about a quarter to a third the cost of running one. A used F150 or baby BMW will cost you more than a new Toyota Yaris over five years.
nunez 8y ago
Yeah, but then you're driving an old car. Some people (myself included) would rather not do that.

by sbov 8y ago

wernercd 8y ago

Why aren't they BOTH wrong? Save $5/day AND $18/k over ten years? Compound daily the both of em... Or don't... each direction has pro's and con's.

projektir 8y ago

> Over the life of a car, a $5/day starbucks habit can cost more than the difference between buying a new vs used car. Does this statement not express the concept? One decision (buying new vs used) can completely wipe out any benefit you got from buying Starbucks every day, for 10 years. That's a very long time.

Retric 8y ago

Buying a new SUV every 3 years and paying taxes on every transaction quickly get's to vastly more than 18k/decade. Remember, you can change both car type and new vs used. New mid range SUV's can easily end up costing more than 100,000$ over a decade. Even cars can get insane. I just watched a view on a guy who spent 28,000$ owning an Aston Martin for 10 MONTHS. https://www.youtube.com/watch?v=hrrFAjxKtj0 https://www.youtube.com/watch?v=hrrFAjxKtj0

dgacmu 8y ago

+this. High savings is made from a collection of good habits (or avoided pitfalls), not just one. It's easy to spend 36k over 10 years on lunch+coffee ($10/day). It's easy to spend 36k on a car that you will use for 10 years. Same ballpark, same opportunity for optimization.

peckrob 8y ago
> High savings is made from a collection of good habits (or avoided pitfalls), not just one. Correct. The whole point of the "stop buying lunch out every day" is not to never do it, but to develop good financial habits and to show you that small changes, taken over a long period, pay off. I bring my lunch almost every day. I actually do it because it is one less thing I have to think about during the day (having to decide where to go and then either walk or drive there). But the numbers pay off too. Assuming $10 a day for lunch, that's $50 a week or $2,600 a year. The cost of bread, lunch meat, condiments, etc is about $10 a week for me or $520 a year. You save more than $2k a year by not eating out every day. For most people, that is not an insignificant amount of money. That's enough for a nice little vacation. Now, you actual amount will be less, because everyone splurges occasionally. But little vampire costs like daily lunches or coffees do add up and if you look around your life there are probably a lot more of them than you realize. Should people not buy stupidly expensive cars they likely cannot afford? Yup. But that doesn't negate the broader point that people should look at the larger financial picture.

ellisv 8y ago

This article [1] was the top google result when I searched "average car ownership length". It reports 79.3 months is the average length that Americans own a vehicle, so a little more than 6 and 1/2 years. Paying more for a vehicle makes sense if you own it longer (or otherwise get more value out of it). I think the problem is that people both buy $5 coffee/day AND buy large, expensive to own and maintain vehicles AND replace those vehicles too often. [1] https://www.cnbc.com/2017/05/28/car-owners-are-holding-their-vehicles-for-longer-which-is-both-good-and-bad.html https://www.cnbc.com/2017/05/28/car-owners-are-holding-their...

watwut 8y ago

That is of course assuming that you will really buy Starbucks coffee every day and will not stop for 10 years. Which is kind of made up situation.

wonthegame 8y ago

But who is spending $5/day everyday at Starbucks? $5 * 365days * 10yrs = $18,250 Full time work is approximately 71% of the year, 260 days. $5 * 260 * 10yrs = $13,000 Still a lot of money. A regular coffee at Starbucks is less than half that - $2.15 A more reasonable number would be $5000-6000 over 10 years if we're going to say "a coffee a day at Starbucks" is the difference between new and used.

pwinnski 8y ago
My daughter works at Starbucks. The answer is: many people, many more than you think until you're there every day seeing them. And it's $4-7 coffee-based drinks.
loco5niner 8y ago
> A regular coffee at Starbucks is less than half that - $2.15 What percentage of people order a regular coffee at Starbucks? Not many, I'm sure.
- mh8h 8y ago
  If you order the regular coffee you get it right away, pretty much while you are paying. The fact that most of the people you see waiting are the ones who ordered the fancier drinks is because of selection bias.
- masonic 8y ago
  Pro tip: their dark/specialty roasts for which they have a sign up (and often have ready to go mornings) can be had as a pourover for no extra charge. (Don't let them upsell you to the Clover). I don't like their basic Pike's roast. There is an elementary school down the street from the local Starbucks. After school, kids by the dozens routinely buy $4-7 drinks, especially iced.

abrahamepton 8y ago

Another way to put that would be to say that if you buy used instead of new, you can treat yourself to a $5 coffee every goddamn day (who does that!? even on weekends?!). There's nothing wrong with having good personal discipline, but the notion that you can scrimp your way to wealth by eschewing $5 daily coffees is absurd. Not to mention, that's $5 daily coffees and...nothing else, as there's usually not a second thing you can cut back on in these preposterous examples, and once you've cut back the coffee once, that's it. One final thought: often the people who say this have zero experience with actually living close to the poverty line. A cheap, unhealthy, delicious indulgence on the daily can make living with less feel much more palatable - or at least, suck less hard. It's not "disciplined" but it'd be a hell of a lot easier for me to be disciplined with my fancy life full of excess.

throwawayjava 8y ago
> you can treat yourself to a $5 coffee every goddamn day (who does that!? even on weekends?!). It's not a $5 daily coffee, it's 2 or 3 $2 coffees. 2 reasonably priced coffees isn't so insane if your workplace doesn't have a machine and won't let you donate one. > One final thought: often the people who say this have zero experience with actually living close to the poverty line. A cheap, unhealthy, delicious indulgence on the daily can make living with less feel much more palatable - or at least, suck less hard. THIS. I spent five years in poverty. Sometimes actually, sometimes just above the line. Always worried about making rent. Eschewing a twice-weekly visit to the coffee shop is a LOT easier, psychologically, when it's not "my only reprieve from eating shitty food in a shitty apartment and still worrying about how we'll pay the grocery bills and rent". And I had the benefiting of knowing that the situation was temporary and it could all be over the moment I decided I had had enough. And a great parental safety net that saved me from the credit card debt treadmill more than once. I can't imagine how bleak things are existing like that with no safety and knowing you don't have an out.
- pwinnski 8y ago
  My daughter works at Starbucks. There is a shocking (to me) contingent of people who do indeed order $4-7 coffee-based drinks daily. She sees the same people every day. It's mind-bending to me, but clearly normal for many.

Gibbon1 8y ago

When my GF was out of work after 2008 I would give her a couple of dollars to go hang out at the coffee shop every morning with her friends. Because she needed that to a) stay sane. b) pick up occasional side jobs. Operationally there is zero difference between a new and used car. One thing about cars, price is about a quarter to a third the cost of running one. A used F150 or baby BMW will cost you more than a new Toyota Yaris over five years.

nunez 8y ago

Yeah, but then you're driving an old car. Some people (myself included) would rather not do that.