ST. LOUIS, MO (KPLR)- First Bank vice president and wealth management advisor Rich Arnold is crunching the coffee numbers to examine the impact caffeine is having on your wallet. As Arnold explains, the average cup of coffee cost roughly $2.50. While this may seem like a small bill upfront, if you are spending $2.50 on a cup of coffee each day, this totals to about $910 a year.
After 30 years, if this money was invested in your 401(k) plan with a 6 percent return, your plan would grow to approximately $120,000. Factoring in a 4 percent annual increase on a $2.50 coffee, a quick look the spreadsheet below costs over 30 years shows.
YEAR COST TOTAL ANNUAL COSTS
1 $2.50 $910.00
10 $3.56 $1,295.21
20 $5.27 $1,917.23
30 $7.80 $2,837.97
Based on these numbers, Arnold states that an individual can expect to spend over ten years more than $50,000 on coffee.
With coffee slowly draining your income, Arnold encourages us to repurpose that money for bigger and bettter things.
First Bank also offers some other strategies to help you stop your coffee spending and start saving for your future.
- Maximize your 401(k) contributions-if you can`t save the maximum for each year, put away at least what your employer is matching.
- Examine your spending habits and see if everything is necessary.
- Stick to a budget. Every little bit helps.
- Outside your 401(k) plan, try to contribute to an investment account each paycheck.
- Pay yourself first by setting up an automatic deduction to your brokerage or investment management account for a fixed amount each month.
First Bank’s final piece of advice for coffee drinkers who are looking to save but not willing to give up their caffeine fix. “Brew your own coffee.”