Except they're wrong. Over the life of a car, a $5/day starbucks habit can cost more than the difference between buying a new vs used car. If you keep your car for 10 years, $5/day is $18k. Our current cars are 13 years, and 17 years old.
Does this statement not express the concept?
One decision (buying new vs used) can completely wipe out any benefit you got from buying Starbucks every day, for 10 years. That's a very long time.
I think the problem is that people both buy $5 coffee/day AND buy large, expensive to own and maintain vehicles AND replace those vehicles too often.
[1] https://www.cnbc.com/2017/05/28/car-owners-are-holding-their...
There's nothing wrong with having good personal discipline, but the notion that you can scrimp your way to wealth by eschewing $5 daily coffees is absurd.
Not to mention, that's $5 daily coffees and...nothing else, as there's usually not a second thing you can cut back on in these preposterous examples, and once you've cut back the coffee once, that's it.
One final thought: often the people who say this have zero experience with actually living close to the poverty line. A cheap, unhealthy, delicious indulgence on the daily can make living with less feel much more palatable - or at least, suck less hard. It's not "disciplined" but it'd be a hell of a lot easier for me to be disciplined with my fancy life full of excess.
It's not a $5 daily coffee, it's 2 or 3 $2 coffees. 2 reasonably priced coffees isn't so insane if your workplace doesn't have a machine and won't let you donate one.
> One final thought: often the people who say this have zero experience with actually living close to the poverty line. A cheap, unhealthy, delicious indulgence on the daily can make living with less feel much more palatable - or at least, suck less hard.
THIS. I spent five years in poverty. Sometimes actually, sometimes just above the line. Always worried about making rent.
Eschewing a twice-weekly visit to the coffee shop is a LOT easier, psychologically, when it's not "my only reprieve from eating shitty food in a shitty apartment and still worrying about how we'll pay the grocery bills and rent".
And I had the benefiting of knowing that the situation was temporary and it could all be over the moment I decided I had had enough. And a great parental safety net that saved me from the credit card debt treadmill more than once. I can't imagine how bleak things are existing like that with no safety and knowing you don't have an out.
It's also a chance to socialize, with no expectations, with other regulars.
It's a treat.
If you're making $100/ week, $30 on coffee is a lot of money. If you're making $2k/ week, it's not moving the needle in a meaningful way.
But me, I might spend close to that amount on graphic novels, or on graphic novels and paperback books combined. I make larger purchases less often, and many people might consider my expenditures wasteful as well.
I suspect many people spending $6/day on coffee have never counted the cost, and might be surprised to realize that they're spending $120/month on coffee. But you've done the math and find it worthwhile, so good for you!
New mid range SUV's can easily end up costing more than 100,000$ over a decade. Even cars can get insane. I just watched a view on a guy who spent 28,000$ owning an Aston Martin for 10 MONTHS. https://www.youtube.com/watch?v=hrrFAjxKtj0
$5 * 365days * 10yrs = $18,250 Full time work is approximately 71% of the year, 260 days.
$5 * 260 * 10yrs = $13,000
Still a lot of money. A regular coffee at Starbucks is less than half that - $2.15
A more reasonable number would be $5000-6000 over 10 years if we're going to say "a coffee a day at Starbucks" is the difference between new and used.
What percentage of people order a regular coffee at Starbucks? Not many, I'm sure.
There is an elementary school down the street from the local Starbucks. After school, kids by the dozens routinely buy $4-7 drinks, especially iced.
Correct. The whole point of the "stop buying lunch out every day" is not to never do it, but to develop good financial habits and to show you that small changes, taken over a long period, pay off.
I bring my lunch almost every day. I actually do it because it is one less thing I have to think about during the day (having to decide where to go and then either walk or drive there). But the numbers pay off too. Assuming $10 a day for lunch, that's $50 a week or $2,600 a year. The cost of bread, lunch meat, condiments, etc is about $10 a week for me or $520 a year. You save more than $2k a year by not eating out every day.
For most people, that is not an insignificant amount of money. That's enough for a nice little vacation. Now, you actual amount will be less, because everyone splurges occasionally. But little vampire costs like daily lunches or coffees do add up and if you look around your life there are probably a lot more of them than you realize.
Should people not buy stupidly expensive cars they likely cannot afford? Yup. But that doesn't negate the broader point that people should look at the larger financial picture.
Operationally there is zero difference between a new and used car. One thing about cars, price is about a quarter to a third the cost of running one. A used F150 or baby BMW will cost you more than a new Toyota Yaris over five years.
Save $5/day AND $18/k over ten years? Compound daily the both of em...
Or don't... each direction has pro's and con's.