The Starbucks fix – the daily habit of enjoying our favorite Starbucks drink can cause serious damage to any budget. Financial gurus call it the “Latte Factor”, the way small daily charges add up to cause significant financial harm. Unfortunately, this Latte Factor doesn’t just apply to Starbucks.
Are you one who just can’t refuse a daily stop for your favorite Jamba Juice smoothies? Do Dunkin Donuts hot chocolates beacon daily? Are you an addict for a daily fix of Krispy Kreme donuts?
Just consider a $4.20 Starbucks drink purchased once a day will cost you $126 a month. That’s nearly $1529 a year! Add an overpriced $1.99 muffin to your tab and you’re looking at a total yearly bill of $2253! That daily Jamba Juice smoothie will set you back $118 a month, or $1432 a year!
So how do we keep our daily food cravings from damaging our financial health? The simple answer is to spend less at our favorite Starbucks, Krispy Kreme, or Jamba Juice. But this is easier said than done. Here are a few tricks to help out.
Cut the frequency, increase the enjoyment. A simple fact of life. The more frequently you partake of any experience, the less enjoyable each individual experience becomes. If we purchase our favorite Starbucks drink just once a week, that one drink would taste extremely delicious. But if we had that same drink with every single meal, we’d probably become downright sick of it (not to mention have one heck of a caffeine rush).
Imagine how much more enjoyable your favorite Starbucks latte or Jamba Juice smoothie would be if you had it just one time per week, compared to drinking it every day. While once a week Starbucks trips would probably take more will power than humanly possible, consider this alternative. Visit your favorite coffee shop every other day, instead of daily. The days you go without increase anticipation and make the days you do buy your favorite drink that much better.
Cut out the “accessories”. Do you always buy an overpriced blueberry muffin with your Starbucks latte? How about a donut with your Dunkin Donuts hot chocolate, or apple cinnamon pretzel stick with your daily Jamba Juice smoothie? By eliminating these “accessories” you can instantly cut your costs by a third or more.
Buy yourself a gift card. Most coffee shops, restaurants, and fast food places offer gift cards. Buy a gift card for yourself every month and limit your purchases to that one card. When the card runs out so does your Starbucks fun for the month. This does several things. First it forces you to stick to a Starbucks budget. Knowing you have a spending limit will help you ration your Starbucks spending.
Second, purchasing a gift card highlights the large sums of money you are actually spending on your drinking habit. Smaller amounts of money spent daily barely register. But when you have to lay out a large some of money to purchase your gift card, you’ll realize how much your habit is actually costing you. Paying $120 for a gift card has a much bigger psychological impact than does paying $4 a day for 30 days.
In no time at all you’ll get tired of spending a hundred or more dollars per month to satisfy your habit. By using a gift card you can slowly decrease how much money you spend. Simply reduce the value placed on your gift card each month. Start with $120 gift card. The next month buy a card worth only $100, and so on.
Employ the envelope system. This is very similar to the gift card method in that each and every month you set aside a certain amount of money that you’ll spend only on your Starbucks or Jamba Juice habit. Set this cash aside in an envelope. When the cash in the envelope is used up, your Starbucks habit is done for the month.
The envelope system does the exact same thing as the gift card system – it sets you on a budget and shocks you into realizing how much money you’re actually spending on your food habit.
By taking a few simple steps to gradually reduce your Starbucks habit, you can literally save hundreds of dollars each and every year.
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Another way to save is to buy gift cards in bulk. This past holiday season, Costco had a five pack of $20 gift cards for about $80! I didn’t have the cash on hand to take advantage, but this holiday season I will!