# The True Cost of Coffee

Every morning, from as far back as I can remember until I left for college, my parents would have a cup of coffee in the morning. Occasionally they would have a cup in the evening as well, and I can only imagine how many cups they drank at work (My mother is a fourth-grade teacher, my father occasionally deals with insane criminals).

I hate the smell of coffee. I’ve never had a cup in my life. Out of the four sips I’ve ever taken, I’ve wanted to vomit after each one. I don’t support Starbucks. In fact, I boycott Starbucks as much as possible. It’s not hard considering that I don’t drink coffee, but it gave me a great excuse when my mother asked me to go out and get her a cup.

## Dropping the Habit

I tried everything to get my parents to get rid of the awful stench at home. I told them it would ruin their teeth, I told them it was a gateway to opium, and I told them they wouldn’t be able to retire because of it.

Clearly none of my efforts worked, but recently my mother started drinking instant coffee exclusively and it made me think about that third excuse I gave them: how much drinking coffee really cost them.

## Calculating it Out

My conservative estimate was two cups of coffee a day. Every single day. For 20 years. I’m sure they drank more than two cups sometimes, and I know they did it for more than 20 years. But we have to start somewhere, and I don’t want to be the guy who completely blows things out of proportion to try and prove a point. This is not a scientific study. Actually, I haven’t done the calculations yet, but here we go:

A few more assumptions:

• Each week consisted of 11 home-brewed cups and 3 cups at Starbucks (or Dunkin Donuts, or wherever).
• The average cost of a pound of coffee is \$10 and provides 32 cups of coffee.
• The average cost of a cup of coffee is \$2. My parents would laugh at people who got the “tall.”

So the average week was 22 cups of home-brewed coffee andÂ 6 cups of store-bought coffee. That comes out to \$6.87 for home brewed per week and \$12 for store bought, for a total of \$18.87.

My first thoughts are WOW, that’s a lot of money for 6 cups of coffee. The home-brewed stuff was a bargain!

Their coffee habit was costing them about over \$75 a month, or about \$985 per year, or \$19,683 over 20 years. Damn.

But how much would it have been for the instant stuff? It costs about \$7 for a can, which makes 21 cups. So \$0.33 per cup. Slightly more than home brewed. Still, it comes out to \$486 per year, or \$9,733 over 20 years.

After all of this, it looks like \$486 per year for coffee is rather insignificant. If you do anything for 20 years, the costs are going to look high, but I honestly expected the costs to be higher.

## Early Retirement? Not Quite

My conclusion is that my parents’ drinking habit didn’t cost them an early retirement. My focus should have been on them brewing their own coffee instead of buying it 3 times a week, but the trade-off of having that stench in the house more often may have been too much for me.

The main takeaway is that people are getting ripped off every morning when they drink coffee. There is barely any difference between home-brewed and instant coffee (home-brewed is actually cheaper!), but there’s a HUGE difference between home-brewed and store-bought!

Brew it yourself! Why pay \$2 per cup when you could pay \$0.33? Is the convenience worth the 500% markup?

### 9 Responses to The True Cost of Coffee

1. LBergs says:

Or you can just get refills from Starbucks for free :-) ….if my calculations are correct \$0 is less than \$0.33

2. Geremy says:

This is silly. Everything we consume has costs, and usually we pay them because we are getting that much benefit. There are a million things that anyone (including your parents) spend more money or time on than “makes sense” to someone else. The whole point is that each person identifies what they like, and then pay for it in time or money.

This post has nothing to do with finance, it just has to do with your dislike of coffee.

G

3. Ira says:

Actually, I think there is more of a point to this than just not liking coffee. Daniel really did argue for years that if we didn’t drink coffee, we could sock away a lot for retirement. But, the cold hard figures show that it would be just a drop in the bucket, so to speak. I think a lot of people think too small when trying to save – giving up something relatively inexpensive. Rather, it makes sense to do something more significant – like putting away 10% of income for retirement, in order to see some real value.

• Daniel says:

One of the reasons I named the blog what I did..

4. What I hated growing up was cigarette smoke. Both my grandparents and my aunt were chain smokers. Unfortunately, they also babysat me when I was young so I had to be subjected to that all the time.

Smoking is soooo expensive, crazy expensive now.

I use to drink more coffee, but it started making me too jittery. Now I only occasionally drink a medium latte at Starbucks or McDonalds. I got a gift certificate for Christmas to Starbucks (only \$25 though), so I’ll try to go there once a month…

5. debtmaven says:

Your costs are a little out of whack. I can routinely buy good quality, organic, free-trade coffee for \$9/lb, or less if I see it on sale. If I buy 3 lbs of coffee at Costco, it’s much less that that even (despite the flavor being inferior, but let’s not get into that), even for the free-trade stuff. I think I can get it for \$5/lb or so.

What you also forgot is adding cream/sugar. I assume from your post that your parents drink black coffee? Well I do not! Half and half plus sugar…

Either way, if I didn’t drink coffee, then I’d be eating/drinking something else. Orange juice is way more expensive than coffee, \$4/half gallon, which is what 8 servings, at \$.50/8 oz. glass? (I hope I got that calc. right).

I try to limit myself to one home-brewed 16 ouncer per day. Off to work, then if I need it, free coffee provided by work (along with sugar/cream). I used to buy the \$4 latte, but to be honest, I like my home-brew much better, and lately haven’t had the urge to buy an extra premium drip or latte.

6. Bret @ Hope to Prosper says:

I’m very lucky because I work for a startup that has awesome coffee. Every morning I start the day with a cup of Coffee People’s Organic Bold and it costs me nothing. I have never been a big Starbucks fan, because I am too cheap to pay \$4 a cup and their coffee is roasted too fast and it tastes burnt.

Anyway, the point I wanted to make is that we each pay a lot of money for a lot of things and that’s OK. For example, I like to eat healthy food and live in a house at the beach. I could probably retire earlier if I slept in an alley and ate at the Rescue Mission, but I would rather live well and retire later.

Retiring early or obtaining any other financial goal is simply a matter of saving and investing. If you save a good percentage of your income and invest it well, you will likely reach those goals. If you spend all of your income every month, you probably won’t reach those goals. Coffee has very little to do with it.
.-= Bret @ Hope to ProsperÂ´s last blog ..Secrets to Becoming Successful =-.

7. Early Retirement Extreme says:

Infidel, don’t you know that coffee is righteous! :-D

Home brewing/grinding/roasting will stink up the house (especially the roasting—disable all smoke detectors and open the windows), but the coffee of beans that are freshly roasted and freshly ground is generally superior to whatever you can buy at the coffee houses. Thus it may provide an incentive not to spend \$2 for something you can make better at home.
.-= Early Retirement ExtremeÂ´s last blog ..Choose Life =-.

8. I totally relish brewing beer at home! It has been such a fun hobby. My family has been encouraging, but most especially when its time to try my latest recipe. I was surprised to learn that it is actually the traditional english brews that I prefer. Just wanted to say cheers for the advice you’ve provided along the way, its been helpful.

## Get Income and Money Saving Tips To Your Inbox

Want more tips on how to make more money each month? Sign up to receive the great tips and tricks to boost your income and save more!