K-Cup or Starbucks? That is the question!

Presumably, you are making your coffee decision based on taste, but have you fully explored the cost?

In the last thirty years, coffee has transformed its place in America from something served inside the local family home, to something that is an experience in and of itself. It is now commonplace for individuals to include a visit to the coffee shop as part of their morning ritual.

If all of your bills are paid, if you have no debt outside of a mortgage, spending $6-7 on a daily coffee experience is probably not something you need to seriously evaluate. However, if you have some credit card debt, if you are worried layoffs may be coming to your industry, or if you have failed to create an emergency savings account, it might be worthwhile to examine the cost of your caffeine habit.

I am not debating the merits of consuming coffee. I’m proceeding as though giving up coffee is not a consideration. With that said, let’s evaluate the different prices to procure your morning beverage.

Here is a chart that includes a few different varieties of how you could obtain your daily coffee.

Item	Brand/Vendor	Cost/Serving
K-cup Medium Roast	Kroger	$0.42
K-cup Medium Roast	Dunkin Donuts	$0.82
Premium Roast Coffee	McDonald's	$1.29
Caramel Macchiato	McDonald's	$3.49
Pike Place Roast	Starbucks	$2.07
Caffe Mocha	Starbucks	$4.14
Blonde Caramel Cloud Macchiato	Starbucks	$5.94

Now that you have reviewed different pricing possibilities, how can you use that information? First, let’s annualize the cost. Lets assume you consume one cup of coffee per day for each of the 365 days in a year. The individual who consumed store-bought, generic K-cups would spend $153.30 per year for coffee. The individual who consumed a Blonde Caramel Cloud Macchiato each day would spend $2,168.10 per year if they did not provide a tip for Starbucks personnel. If they rounded up each day to $7.00, their total cost would be $2,555.00 per year.

Again, if you are already have solid financial footing, reducing your budget by $2k may not interest you. However, if you know you need to make some improvements, the little things do add up! And it’s not just coffee that you can evaluate in this manner. There are lots of food and beverage options you can consider.

Are there items in your budget you could alter in a way that would produce meaningful financial impact without upending your lifestyle? Is coffee on the list of changes you would make or is it sacrosanct? Share your thoughts on making small budgetary sacrifices to improve your overall financial condition.