In March I went back east to visit my elderly parents. My father, now 94, one of the few remaining WWII veterans, still remembers the Great Depression. He’d never experienced a Starbucks coffee. It was time. Three small Starbucks drinks were ordered: 2 tall vanilla lattes, and 1 black coffee. As my Dad looked on, I handed over $10 and told the Starbucks cashier to keep the 65 cents change. When we left the store my dad remarked, “this generation’s gone crazy for coffee.” I wonder if he’s on to something. Are we really spending that much money on coffee drinks?

Here’s a few sobering facts reported in recent surveys by USA today, Fox News, and Acorns Money Matters:

  • The average American today spends about $3 a day on coffee which amounts to $1,100 a year.
  • In a survey of 2,000 millennials, 41% admitted to spending more on coffee than on contributions to their retirement plans.
  • Depending on the size of a drink ordered, a person can spend anywhere between $3.43 and $7.00 for coffee at Starbucks. By comparison, coffee brewed at home costs just about 27 cents a cup.
  • Even buying a knock-off specialty coffee at McDonald’s can be expensive. Buying a McDonald’s $2 latte four days a week adds up to $6,508 in 10 years (assumes 8%).

So what’s the big deal about treating yourself to an occasional latte? If done in moderation, like most things in life, it’s not a detriment to your finances. However, when we’re frequently in line at the local Starbucks, the opportunity cost can be high!

If the $1,100 a year spent on Starbucks mentioned above was instead invested over a 10-year period averaging 8%, you’d have $17,000. Seventeen. Thousand. Dollars. That’s a European vacation for two, a car, multiple large screen TVs, almost unlimited mani-pedi’s and facials, five tickets to the super bowl, not to mention a big boost to your retirement savings!

USA Today Network has an online Coffee Cost Generator which allows users to figure out how much their cup of Joe is costing them. It calculates how much a person is spending per month and then shows them what could be purchased if they’d forgone so many visits to Starbucks. Some examples include:

  • Giving up a 16 ounce cup of Starbucks coffee for 84 days amounts to a main-level ticket at Yankee Stadium or
  • 247 days without a Starbucks equates to a two-day luxury cruise to Mexico.

I’m not suggesting that we should stop visiting Starbucks or other specialty coffee shops all together, rather that we be aware of HOW much we’re spending at these stores and what other ways that money could have been spent or invested. Spending, saving and investing wisely is all about awareness and self discipline. We want to live purposeful, happy lives and have a Cappuccino or Americano along the way. Just keep an eye on how many visits we’re making to Starbucks. It’s a trade off. I think I’ll stop now and go finish my Latte!