Skip the coffee?

Skip the coffee? No, really! In an effort to save money on your daily commute and great way to cut spending is by skipping the fancy coffee drink and making your fresh brew at home. USNews.com says that American’s spend an average of $4 for morning coffee, that’s $28 bucks a week, $112 a month and $1,344 a year!

While a $4 morning coffee can satisfy the soul, it can also hurt the budget. Consider buying the equipment needed to make your beverage of choice at home. It’s a larger out-of-pocket expense, but it will easily pay for itself over time.

The Latte Factor is what this phenomenon is called and there was even a book written by the same name several years ago. The Simple Dollar explored this idea and turned the money we spend on coffee and latte’s into investments.

The Simple Dollar says, “Let’s say that you drink three lattes a week (not unreasonable for a latte drinker). That’s 6,240 lattes, which costs a total of $24,960 (again, with no price increase). If you just buy that same 5% investment, you would have $79,772.01 at retirement.

Can you believe that much good can come from skipping a latte? And if you don’t have a huge pile of cash to throw in a 401K, later this year there will be a new investment fund called MyRA sponsored and funded by the government. This fund can be started with as little as $20 and you can start with as little as $5 from your pay check. MyRA will be wonderful for young people to begin saving for retirement now.