7 ms·

I have a knee jerk reaction against posts like this, mostly because of the reference to $4 cups of coffee. While the point is true, I think your time is best s

I have a knee jerk reaction against posts like this, mostly because of the reference to $4 cups of coffee. While the point is true, I think your time is best spent worrying about other things. 90% of money problems seem to come from a few things: * Expensive cars - bought with debt. * Expensive housing - again bought with debt. * Expensive schooling - even more debt. I've never bought (pun intended) the argument that dining out in any form (including coffee) even comes close to these other items. Even if you're eating out 3-5 nights per week, it's just not expensive enough. I guess if you're always feeding a family of 5 and buying expensive bottles of wine while you eat, then maybe. I also think that time spent worrying about trivial stuff like coffee would be better spent trying to make more money.

thinkingemote 6y ago
Edits I'm with you totally. It doesn't feel right or valid. why worry about a coffee? ( I don't!). But that feeling could be worth challenging... If there's 2 of you and you eat out 5 times a week for the length of time you would own a car... then it might be equivalent? There's that old paradoxical saying about how the rich are rich because they don't buy anything.
- BrianOnHN 6y ago
  52×5×40=10,400
omgwtfbyobbq 6y ago
That's a good point. The only thing I can think of adding is that in some markets, housing is just plain expensive, and people don't have as much wiggle room there unless they can make more relative to lower housing costs in some other area and are willing/able to move there.
gen220 6y ago
Unless you’re really special, your grocery bills at the end of the year will dominate your takeout and restaurants bills combined. This was an eye opener to me, after meticulously tracking my finances for a year. There’s two takeaways. (1) on the days where you don’t feel like cooking, do not feel bad about ordering take out or dining out. (2) consider how you can minmax your staple grocery items, by buying in bulk, joining a food co-op. Etc You win a lot more by shaving dimes off every pound of oatmeal, integrated over a lifetime. And it’s recurring returns on a one-time investment of finding the best source in your neighborhood. Buy the coffee every once in a while if it brings you joy. Everything in moderation, of course.
- asdfasgasdgasdg 6y ago
  > Unless you’re really special, your grocery bills at the end of the year will dominate your takeout and restaurants bills combined. You'd be surprised at how much a lot of people eat out. As of 2016, total spending among all Americans was higher on restaurants than on groceries. The average American (although not necessarily the median one) spends more on restaurants than groceries.
  - warlog 6y ago
    Probably inverted in 2020.
- OJFord 6y ago
  > your grocery bills at the end of the year will dominate your takeout and restaurants bills combined. Only if days you cook for yourself (heavily) dominate days you order a takeaway. Also, 'groceries' probably accounts for a lot more alcohol (assuming you drink of course!) really tilting the balance. Not least because if you order a takeaway you're probably still drinking something from your grocery order.
  - gen220 6y ago
    It doesn’t need to heavily dominate! Especially in WFH days, where you eat breakfast and lunch at home. If you eat three meals a day and have staple breakfasts and lunches (for us it’s oatmeal/muesli in the morning with fruits, sandwiches for lunch) and only ever order in for dinner, at least ⅔ of your meals each day automatically come from “groceries”. And home cooked dinners are usually the most expensive meal of the day (if they feature the typical dinner meats). Trading off for takeout, many restaurants are overjoyed to give you two servings in the name of one, and that makes at least one meal for the next day! At least this is how it works for us. Alcohol is a good point though! It can definitely make groceries look more expensive than they are.
    - ryandrake 6y ago
      This thread made me go check, since I obsessively track my expenses in Quicken. My grocery bill has been consistently 4-5X my restaurant spending for basically as far back as I have data (over 20 years). So at least this anecdote supports OP's anecdote!
mastazi 6y ago
> I've never bought (pun intended) the argument that dining out in any form (including coffee) even comes close to these other items. Well it's easy to know if that argument holds true or not... just track your expenses. It holds true for me.[1] Once I started WFH during COVID my weekly expenses got in much better shape. [1] Edit: combined lunch + coffee + snacks during the work week were equivalent to about 15% of my rent (and rent is high where I live). I did not include weekend dining out with friends/family in that figure, or it would have been even higher. (The reason is that during the work week I always get food or coffee from the same merchants so it was easier to track, but during weekend it varies more). Edit 2: solution was to pack lunch/snacks, and use the office coffee maker. Packed lunch is less than half of the previous amount, and office coffee is free. Now the figure is about 5% of my rent. Edit 3: a positive side effect is that my snacks started consisting more of things like an apple or an orange, rather than the crappy processed-food sugary snacks I was buying at the cafe.
Bilal_io 6y ago
It depends on whether you see a $500 ($4 * 21 business days * 12 months - exaggerated $500 for drinking coffee at home) a year in saving as big of not. For some people it can be an emergency fund, for others it's 2-3 expensive dinners for 2. The issue is that you also mentioned dining in general, which takes that $1k of coffee to a completely level. Bottom line is drinking coffee at home and cooking save you a lot of money.
- nicbou 6y ago
  Cooking definitely do. My groceries bill is around 150€/month. You'd need about 750€/month to eat out twice a day. The difference is 7200€/year, a pretty hefty chunk of your post-tax income.
  - curation 6y ago
    Yes! I did not eat in a restaurant for 15 years. It helped my family never did so I did not miss it. Perhaps a tip for people trying to future-proof their kids for economic depression.
Terretta 6y ago
Don’t forget the cable (or cord-cutting channel), mobile, game, music, news, and magazine subscription bills, to which now we have to add apps. Large ones can often be cut to 1/10th by rethinking, switching, etc.
- notapenny 6y ago
  I treat Netflix/Primevideo/Hulu & friends like this. It takes a bit of thinking but I usually have only one subscription at a time and cancel as soon as I close in on the end of whatever show I'm watching, then re-subscribe to whatever I need to. Some services (not necessarily the streaming ones) allow you to re-trial after a few months (love that), others will cut your subscription fee if you try to leave after a few months. So try to leave after a month or so anyway, even if you don't want to, then take the better offer.
aadillpickle 6y ago
Haha in the original draft of this post I had "make more money/work on yourself" as one of the points but took it out - most people seem to know the big stuff like don't make big purchases you can't afford. What seems to be less common knowledge amongst my friends at least is how much little things like eating out often has a financial impact on them since it's harder to see. We aren't programmed to understand compounding very well so I wanted to highlight that in the post somehow. This could just be my very young self talking since I haven't seen very many different financial profiles out there.
nicbou 6y ago
I wrote a long guide about saving money in Germany. It made me look more seriously at my budget. - Eating out is a big expense. I eat quite well on 5€ a day. Eating out would cost me about 25€ a day. That's a 7k€ per year difference. - Housing is a huge, but mostly unavoidable expense. Yet my rent went from 950€/month to 550€/month when I moved out of the centre. - Health insurance is another big expense. At one point I paid more for insurance than rent, because I'm self-employed. - The things I tend to skimp on (subscriptions, quality food) make nearly no difference.
- seppel 6y ago
  > - Health insurance is another big expense. At one point I paid more for insurance than rent, because I'm self-employed. Health insurance is also really expensive as an employee, but people dont notice because half of the cost is completely hidden for them ("paid" by the employer) and the other half also never reaches their bank account but is on listed in the monthly payroll notification.
  - nicbou 6y ago
    Depends on where you live. Note the currency used.
    - seppel 6y ago
      I was talking about Germany.
  - BrandoElFollito 6y ago
    Yes but all the other deductions are expensive as well (retirement, death insurance etc.). Why specifically pointing out the health insurance part? It is as compulsory as the others.
    - seppel 6y ago
      Death insurance is not compulsory and I'm not sure why the OP pointed out health insurance. I was just pointing out that it is expensive, independent whether you are self-employed or not.
globular-toast 6y ago
Like any problem you should always start by tackling the big low-hanging fruit. Then work your way up as far as you can be bothered. For most people the biggest thing is a car. If you can not own a car at all then you're laughing. But if you have to then I recommend buying old, undesirable cars from good brands like Honda, Toyota or Ford, but always research the model first as every brand has made stinkers over the years. You can drive these cars until they are scrap and pay a fraction in depreciation that you would have on a newer or more desirable car. Of course, if you want to own a car then by all means do it. But just be honest with yourself that it's not an essential thing and you'll be making sacrifices elsewhere for it. It's totally possible that the lowest hanging fruit on some people's trees is things like coffee. But the important thing is to record your expenses and budget so you can identify what the lowest hanging fruit it. Also, just because something is a bigger expense, doesn't mean it's a lower hanging fruit. Most people spend most of their money on housing. But you need a roof over your head. You don't need coffee from your local hipster outlet.
curation 6y ago
I agree. I retired at 35 by saving 90% of what I made and lucked into living in Toronto at the beginning of the property ladder in the 90s. Like a diet, it's more about the determination to live with what seems like privation but really it is just being free of all kinds of crap - furniture, creams, soaps, appliances, clothes, decor - that provide social acceptance but ends in indentured servitude.
kiba 6y ago
For me, my biggest controllable expense and vice is indeed eating out.
throw0101a 6y ago
> 90% of money problems seem to come from a few things: * Expensive cars - bought with debt. * Expensive housing - again bought with debt. * Expensive schooling - even more debt. Nick Maggiulli made a good observation in a 2020 weblog post: > All the expense tracking and goal setting in the world cannot make up for an insufficient balance. * https://ofdollarsanddata.com/the-biggest-lie-in-personal-finance/ https://ofdollarsanddata.com/the-biggest-lie-in-personal-fin... The bottom 40-50% of US households can either barely or not-at-all cover the basic necessities: housing, food, transportation, healthcare. Note that this doesn’t include any money for education, clothing, or any form of entertainment. > That’s why the biggest lie in personal finance is that you can be rich if you just cut your spending. And the financial media feeds this lie by telling you to stop spending $5 a day on coffee so that you can become a millionaire. […] > Instead of trying to convince everyone that they can be rich, we should be trying to convince everyone that they can be not poor. Now that would be a start to undoing the biggest lie in personal finance.
NoOneNew 6y ago
Yea, I live in the US and I came from a poor immigrant family. The arguement about the true price of your 4 dollar coffee is lost on people. That's why poor immigrants typically rise in economic classes in the US and the folks who defend their poor purchasing habits stay locked in. You buying the occasional overpriced, poorly made coffee doesn't hurt in the grand scheme of things. The compounding habit does. For whatever reason, a majority of Anglo saxons and anglo culture just dont understand compound interest in general. Maybe it's because western culture adopted Protestant ideals more than they think. My half jewish, half catholic background doesn't jive well I guess. Anyways, let's get into examples, shall we? And no, I won't get into the Lamborghini/Ferrari endgame. Italian cars are crappy anyways. They catch on fire too often. 3 dollar coffees a month, that's 90 bucks. I go through about a bag of coffee a month, at $15 a bag of BRCC, I only save 75 a month. That's only 900 a year extra I have by being slightly snobbish about my coffee routine (french press or cowboy coffee it). Let's also do your eating out example, because habits are not in a vacuum, they're holistic and systemic. Most things I would want to eat at a restaurant are 15 to 20 bucks. I won't get into a decent steak or seafood because that's too easy to prove my point. Let's do, I dont know, chicken alfredo, I made that a week ago while babysitting my buddies kids. I spent like 25 bucks, but that included popcorn and icecream. So 20? This fed a toddler, 6 yr old, preteen and my own fat ass, with enough left overs for lunch the next day for everyone. If we went out, that's 15 for me and then 15 for the preteen and then another 15 to split between the younger ones. So 45 bucks. 25 dollar savings. However, there would have been no left overs. So let's say an extra 20 in savings, 45. Alright, to get just me on the savings, I'm thinking about 6 adult portions. 7.50 in savings per meal for myself when I want a fully proper dinner on average. You say 3-5 times you eat out a week. 4 for an easy average. That's 30 a week, 120 a month, 1440 a year. My average savings for not eating out and drinking crappy coffee is $2,340 a year as a single guy. $195 a month. Thats the advertised payment of a new Jetta. Choosing to be at the whim of someone who brews coffee like shit and people who over charge for super simple meals or doing things myself. Let's nix the car. Let's think opportunity cost. Are you really maximizing your extra 10 minutes saved ordering dinner? Are you reading earnings reports or geopolitical negotiations? Maybe the latest white paper for next 5 minute programming fad? No. You're watching netflix. Stfu. I watch netflix and cook. Well, that and audible and curiosity stream. I also buy lots of books. And I do the occasional masterclass and random course online. That extra 2k a year isnt enough to be a market mover. It is however enough to invest in yourself pretty well. Which goes all the way back to my immigrant comment. Your philosophy is investing in the market. That's dumb as hell especially when you're young. My philosophy, and most immigrant families that pinch pennies, is about investing in yourself. I think most people agree that a person's greatest investment is themselves, not outside endeavours. So yea, is that overpriced cup of coffee worth not investing in yourself?

thinkingemote 6y ago

Edits I'm with you totally. It doesn't feel right or valid. why worry about a coffee? ( I don't!). But that feeling could be worth challenging... If there's 2 of you and you eat out 5 times a week for the length of time you would own a car... then it might be equivalent? There's that old paradoxical saying about how the rich are rich because they don't buy anything.

BrianOnHN 6y ago
52×5×40=10,400

omgwtfbyobbq 6y ago

That's a good point. The only thing I can think of adding is that in some markets, housing is just plain expensive, and people don't have as much wiggle room there unless they can make more relative to lower housing costs in some other area and are willing/able to move there.

gen220 6y ago

Unless you’re really special, your grocery bills at the end of the year will dominate your takeout and restaurants bills combined. This was an eye opener to me, after meticulously tracking my finances for a year. There’s two takeaways. (1) on the days where you don’t feel like cooking, do not feel bad about ordering take out or dining out. (2) consider how you can minmax your staple grocery items, by buying in bulk, joining a food co-op. Etc You win a lot more by shaving dimes off every pound of oatmeal, integrated over a lifetime. And it’s recurring returns on a one-time investment of finding the best source in your neighborhood. Buy the coffee every once in a while if it brings you joy. Everything in moderation, of course.

asdfasgasdgasdg 6y ago
> Unless you’re really special, your grocery bills at the end of the year will dominate your takeout and restaurants bills combined. You'd be surprised at how much a lot of people eat out. As of 2016, total spending among all Americans was higher on restaurants than on groceries. The average American (although not necessarily the median one) spends more on restaurants than groceries.
- warlog 6y ago
  Probably inverted in 2020.
OJFord 6y ago
> your grocery bills at the end of the year will dominate your takeout and restaurants bills combined. Only if days you cook for yourself (heavily) dominate days you order a takeaway. Also, 'groceries' probably accounts for a lot more alcohol (assuming you drink of course!) really tilting the balance. Not least because if you order a takeaway you're probably still drinking something from your grocery order.
- gen220 6y ago
  It doesn’t need to heavily dominate! Especially in WFH days, where you eat breakfast and lunch at home. If you eat three meals a day and have staple breakfasts and lunches (for us it’s oatmeal/muesli in the morning with fruits, sandwiches for lunch) and only ever order in for dinner, at least ⅔ of your meals each day automatically come from “groceries”. And home cooked dinners are usually the most expensive meal of the day (if they feature the typical dinner meats). Trading off for takeout, many restaurants are overjoyed to give you two servings in the name of one, and that makes at least one meal for the next day! At least this is how it works for us. Alcohol is a good point though! It can definitely make groceries look more expensive than they are.
  - ryandrake 6y ago
    This thread made me go check, since I obsessively track my expenses in Quicken. My grocery bill has been consistently 4-5X my restaurant spending for basically as far back as I have data (over 20 years). So at least this anecdote supports OP's anecdote!

mastazi 6y ago

> I've never bought (pun intended) the argument that dining out in any form (including coffee) even comes close to these other items. Well it's easy to know if that argument holds true or not... just track your expenses. It holds true for me.[1] Once I started WFH during COVID my weekly expenses got in much better shape. [1] Edit: combined lunch + coffee + snacks during the work week were equivalent to about 15% of my rent (and rent is high where I live). I did not include weekend dining out with friends/family in that figure, or it would have been even higher. (The reason is that during the work week I always get food or coffee from the same merchants so it was easier to track, but during weekend it varies more). Edit 2: solution was to pack lunch/snacks, and use the office coffee maker. Packed lunch is less than half of the previous amount, and office coffee is free. Now the figure is about 5% of my rent. Edit 3: a positive side effect is that my snacks started consisting more of things like an apple or an orange, rather than the crappy processed-food sugary snacks I was buying at the cafe.

Bilal_io 6y ago

It depends on whether you see a $500 ($4 * 21 business days * 12 months - exaggerated $500 for drinking coffee at home) a year in saving as big of not. For some people it can be an emergency fund, for others it's 2-3 expensive dinners for 2. The issue is that you also mentioned dining in general, which takes that $1k of coffee to a completely level. Bottom line is drinking coffee at home and cooking save you a lot of money.

nicbou 6y ago
Cooking definitely do. My groceries bill is around 150€/month. You'd need about 750€/month to eat out twice a day. The difference is 7200€/year, a pretty hefty chunk of your post-tax income.
- curation 6y ago
  Yes! I did not eat in a restaurant for 15 years. It helped my family never did so I did not miss it. Perhaps a tip for people trying to future-proof their kids for economic depression.

Terretta 6y ago

Don’t forget the cable (or cord-cutting channel), mobile, game, music, news, and magazine subscription bills, to which now we have to add apps. Large ones can often be cut to 1/10th by rethinking, switching, etc.

notapenny 6y ago
I treat Netflix/Primevideo/Hulu & friends like this. It takes a bit of thinking but I usually have only one subscription at a time and cancel as soon as I close in on the end of whatever show I'm watching, then re-subscribe to whatever I need to. Some services (not necessarily the streaming ones) allow you to re-trial after a few months (love that), others will cut your subscription fee if you try to leave after a few months. So try to leave after a month or so anyway, even if you don't want to, then take the better offer.

aadillpickle 6y ago

Haha in the original draft of this post I had "make more money/work on yourself" as one of the points but took it out - most people seem to know the big stuff like don't make big purchases you can't afford. What seems to be less common knowledge amongst my friends at least is how much little things like eating out often has a financial impact on them since it's harder to see. We aren't programmed to understand compounding very well so I wanted to highlight that in the post somehow. This could just be my very young self talking since I haven't seen very many different financial profiles out there.

nicbou 6y ago

I wrote a long guide about saving money in Germany. It made me look more seriously at my budget. - Eating out is a big expense. I eat quite well on 5€ a day. Eating out would cost me about 25€ a day. That's a 7k€ per year difference. - Housing is a huge, but mostly unavoidable expense. Yet my rent went from 950€/month to 550€/month when I moved out of the centre. - Health insurance is another big expense. At one point I paid more for insurance than rent, because I'm self-employed. - The things I tend to skimp on (subscriptions, quality food) make nearly no difference.

seppel 6y ago
> - Health insurance is another big expense. At one point I paid more for insurance than rent, because I'm self-employed. Health insurance is also really expensive as an employee, but people dont notice because half of the cost is completely hidden for them ("paid" by the employer) and the other half also never reaches their bank account but is on listed in the monthly payroll notification.
- nicbou 6y ago
  Depends on where you live. Note the currency used.
  - seppel 6y ago
    I was talking about Germany.
- BrandoElFollito 6y ago
  Yes but all the other deductions are expensive as well (retirement, death insurance etc.). Why specifically pointing out the health insurance part? It is as compulsory as the others.
  - seppel 6y ago
    Death insurance is not compulsory and I'm not sure why the OP pointed out health insurance. I was just pointing out that it is expensive, independent whether you are self-employed or not.

globular-toast 6y ago

Like any problem you should always start by tackling the big low-hanging fruit. Then work your way up as far as you can be bothered. For most people the biggest thing is a car. If you can not own a car at all then you're laughing. But if you have to then I recommend buying old, undesirable cars from good brands like Honda, Toyota or Ford, but always research the model first as every brand has made stinkers over the years. You can drive these cars until they are scrap and pay a fraction in depreciation that you would have on a newer or more desirable car. Of course, if you want to own a car then by all means do it. But just be honest with yourself that it's not an essential thing and you'll be making sacrifices elsewhere for it. It's totally possible that the lowest hanging fruit on some people's trees is things like coffee. But the important thing is to record your expenses and budget so you can identify what the lowest hanging fruit it. Also, just because something is a bigger expense, doesn't mean it's a lower hanging fruit. Most people spend most of their money on housing. But you need a roof over your head. You don't need coffee from your local hipster outlet.

curation 6y ago

I agree. I retired at 35 by saving 90% of what I made and lucked into living in Toronto at the beginning of the property ladder in the 90s. Like a diet, it's more about the determination to live with what seems like privation but really it is just being free of all kinds of crap - furniture, creams, soaps, appliances, clothes, decor - that provide social acceptance but ends in indentured servitude.

kiba 6y ago

For me, my biggest controllable expense and vice is indeed eating out.

throw0101a 6y ago

> 90% of money problems seem to come from a few things: * Expensive cars - bought with debt. * Expensive housing - again bought with debt. * Expensive schooling - even more debt. Nick Maggiulli made a good observation in a 2020 weblog post: > All the expense tracking and goal setting in the world cannot make up for an insufficient balance. * https://ofdollarsanddata.com/the-biggest-lie-in-personal-finance/ https://ofdollarsanddata.com/the-biggest-lie-in-personal-fin... The bottom 40-50% of US households can either barely or not-at-all cover the basic necessities: housing, food, transportation, healthcare. Note that this doesn’t include any money for education, clothing, or any form of entertainment. > That’s why the biggest lie in personal finance is that you can be rich if you just cut your spending. And the financial media feeds this lie by telling you to stop spending $5 a day on coffee so that you can become a millionaire. […] > Instead of trying to convince everyone that they can be rich, we should be trying to convince everyone that they can be not poor. Now that would be a start to undoing the biggest lie in personal finance.

NoOneNew 6y ago

Yea, I live in the US and I came from a poor immigrant family. The arguement about the true price of your 4 dollar coffee is lost on people. That's why poor immigrants typically rise in economic classes in the US and the folks who defend their poor purchasing habits stay locked in. You buying the occasional overpriced, poorly made coffee doesn't hurt in the grand scheme of things. The compounding habit does. For whatever reason, a majority of Anglo saxons and anglo culture just dont understand compound interest in general. Maybe it's because western culture adopted Protestant ideals more than they think. My half jewish, half catholic background doesn't jive well I guess. Anyways, let's get into examples, shall we? And no, I won't get into the Lamborghini/Ferrari endgame. Italian cars are crappy anyways. They catch on fire too often. 3 dollar coffees a month, that's 90 bucks. I go through about a bag of coffee a month, at $15 a bag of BRCC, I only save 75 a month. That's only 900 a year extra I have by being slightly snobbish about my coffee routine (french press or cowboy coffee it). Let's also do your eating out example, because habits are not in a vacuum, they're holistic and systemic. Most things I would want to eat at a restaurant are 15 to 20 bucks. I won't get into a decent steak or seafood because that's too easy to prove my point. Let's do, I dont know, chicken alfredo, I made that a week ago while babysitting my buddies kids. I spent like 25 bucks, but that included popcorn and icecream. So 20? This fed a toddler, 6 yr old, preteen and my own fat ass, with enough left overs for lunch the next day for everyone. If we went out, that's 15 for me and then 15 for the preteen and then another 15 to split between the younger ones. So 45 bucks. 25 dollar savings. However, there would have been no left overs. So let's say an extra 20 in savings, 45. Alright, to get just me on the savings, I'm thinking about 6 adult portions. 7.50 in savings per meal for myself when I want a fully proper dinner on average. You say 3-5 times you eat out a week. 4 for an easy average. That's 30 a week, 120 a month, 1440 a year. My average savings for not eating out and drinking crappy coffee is $2,340 a year as a single guy. $195 a month. Thats the advertised payment of a new Jetta. Choosing to be at the whim of someone who brews coffee like shit and people who over charge for super simple meals or doing things myself. Let's nix the car. Let's think opportunity cost. Are you really maximizing your extra 10 minutes saved ordering dinner? Are you reading earnings reports or geopolitical negotiations? Maybe the latest white paper for next 5 minute programming fad? No. You're watching netflix. Stfu. I watch netflix and cook. Well, that and audible and curiosity stream. I also buy lots of books. And I do the occasional masterclass and random course online. That extra 2k a year isnt enough to be a market mover. It is however enough to invest in yourself pretty well. Which goes all the way back to my immigrant comment. Your philosophy is investing in the market. That's dumb as hell especially when you're young. My philosophy, and most immigrant families that pinch pennies, is about investing in yourself. I think most people agree that a person's greatest investment is themselves, not outside endeavours. So yea, is that overpriced cup of coffee worth not investing in yourself?