We all have our morning routines. For some of us, this includes drinking a cup of coffee.
This is an area in which I’ve gone back and forth over the years. About 5 years ago, I tried to give up caffeine. My drink of choice at the time was diet soda. I drank several per day, and this had gone on for years. After getting a root canal and a wisdom tooth pulled, I decided that it was not worth drinking diet soda anymore based on my suspicion that it played a role in those issues.
So, I gave it up cold turkey.
I ultimately got into drinking tea, and then coffee. Getting a cup of coffee in the morning on the way into work has become a part of my routine, for better or worse. Just one cup, and I don’t always finish it. But it’s become a habit.
There have been two places that I’ve gone to lately for that morning cup of Joe. One place, which we’ll call “Brand A”, was costing $2.22 including tax. That’s not exactly cheap!
I subsequently decided to try out another place, which we’ll call “Brand B”. At this place, coffee cost $1.22 included tax. For $1 less, was I buying a substandard drink? Would I really notice the difference?
The answer is no. I did not find the Brand B coffee that was $1 less to be any less enjoyable to drink than the more expensive Brand A coffee. So, my decision had been made to switch to the cheaper coffee.
When you project this over the course of a year, with 250 working days this would naturally equate to $250 dollars saved. Simply by switching coffee brands!
Now, what if I took it one step further. Instead of switching brands, why not give up coffee altogether? Or, just have it occasionally when I don’t have to pay for it. This would save me another $250 or so per year. Putting this in perspective, giving up (paying for) coffee would save me upwards of $500 per year.
Who couldn’t use an extra $500 per year? We often think about what to do with a tax refund, so applying that line of thinking here, what would you do with an extra $500?
If we then take this another step further, we could think about what that $500 could become in the future. If you take the $500 and invest in while earning 10% annually (and reinvesting the earnings), this could really add up in the long run.
Over a long-term 30-year time horizon, this $500 could grow into over $8700 when you apply a 10% growth rate. Now think about what you can do with that amount of money!
Keep in mind this is just based on one year’s worth of savings. Do this for multiple years, and the savings could really add up.
What about you? Do you have any examples of small changes have resulted in big savings?