Cutting Down on Coffee

One of my friends emailed me a few months ago about one of her financial downfalls. She wrote:

"My weakness is treats. I love to go out for coffee or grab a treat after a long day at work or hanging out with my son (also a lot of work). One idea I have taken hold of is ordering cafe au lait at coffee shops instead of lattes. The average cafe au lait (steamed milk and coffee) is $2 or lower, depending on the shop I go to. Plus, I always go local (when I can help it) and then I know that I'm spending money in my community and supporting local business owners (like me)."

She didn't mention how much a latte costs, but based on what she is saying, it sounds like it is more than a cafe au lait. Not being much of a coffee-drinker myself (and having no idea what the difference is between these two beverages), I had to turn to Google for some help. Apparently, the latte is espresso with milk, and the cafe au lait is strong black coffee with steamed milk. I'm not sure if she's making a big sacrifice in flavor, but it sounds about the same to me. So, if there's not much difference, I'd go for the less expensive one too.

Another idea that I had for her is to look at the average number of times she goes out for coffee or other treats during a week or month and then cut that number down by 25% or 50%. She could give herself 1-2 months to be on the reduced plan as a trial. If it's shear torture, then she could go back to what she was doing. However, more than likely, after a month or two she'll be used to going out for coffee less. She should also track the savings from this plan. Watching the amount in savings account increase should be an added incentive.

If you think you'd like to try the idea of reducing the number of trips to the coffee shop but that it would be too hard to track, try using a gift certificate. Figure out how much you spend on coffee on average each month. Then, reduce that amount by 25% or 50%. Buy a gift certificate for the amount you want to spend for the month. Only use the gift certificate (not cash or credit) when you go to the coffee shop. Once you've used the entire balance, your treats are done for that month.

For example:
You usually go to the coffee shop 4 times a week.
You usually buy the $2 cafe au lait.
That's $8 per week.
There are roughly 4 weeks in a month, which means you spend $32 per month.

To cut back by 25% would mean that you would only spend $24 (an $8 savings).
To cut back by 50% would mean that you would only spend $16 (a $16 savings).

Buy a gift certificate for that amount and see how you do. If you can get gift certificates in small amounts (for just one drink), then you could do it like this:

You usually go to the coffee shop 4 times a week.
There are roughly 4 weeks in a month, which means you go 16 times per month.

To cut back on your visits by 25% would mean you should buy twelve $2 gift certificates.
To cut back on your visits by 50% would mean you should buy eight $2 gift certificates.

With the second idea, you would know exactly how many drinks you have left for the month based on the number of gift certificates you still have on hand.

Need some help or convincing on this kind of savings? Check out the website of David Bach (author of the Finish Rich book series). He has coined the term "Latte Factor."

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