Personal finance

How Much Does a Latte Grande Cost?

It is early on a Monday morning and you are dragging your body to work again to start off another work week. It is worth it, though. Just another 40 years of this and you will be able to live out your dream in your summer cottage on the lake.

But at this point you are still too tired to enjoy it. At this point, you can’t even imagine making it until 10:00 without your morning latte Grande at Starbucks.

You walk into the Starbucks that you always stop at on the way to work you start to wake up to the smell of the fresh brew. Change in hand, you are already set for your daily fix. A shot of excitement shoots through you as you read the sign above the counter, “Latte Grande, $3.55.”

You drop the change on the counter, pick up your drink and take a quick sip. With the instant burst of energy, you start to believe you can make it through another day. But with the extra synapses firing, you also start to wonder how much that latte actually cost you.

Sure the sign says $3.55, but how many times have you done it? Every day last week. Every weekday for the past year actually.

“Oh well,” you say to yourself taking another sip, “it’s only $3.55.”

But, there is a nagging in your mind to figure out how much it will actually cost to keep up this innocent little indulgence.

The caffeine wakes up your left brain just enough to start to do some math and you begin to add up how much you spent last week on lattes.

“$3.55 times 5 is $17.75. That’s okay, really. It is hardly the cost of a night out at the movies.”

But, you buy a latte every week. “How much did I spend this year?” you continue to wonder. As you walk to your car, you keep crunching the numbers and quickly realize that you have spent $923 on lattes over the past year. “Still, it isn’t THAT much. Hardly the cost of the one week vacation that I took to the coast last summer.”

Despite your rationalizing, the little indulgence is starting to seem a little more expensive all of a sudden.

As you start your car and pull out onto the street again, you wonder what else you could do with that money each year. What have you given up to enjoy your morning latte?

Your caffeine infused brain is eager for the next step so you decide to take the math up a notch.

“If I invested that along with my normal investment plan, how much would it be worth in 40 years?”

Historical charts show that your investments should earn about 8% per year. Using that number you calculate out how much a one-time $1000 investment would be in 40 years.

You need to use the calculator on your phone at a red light to do the calculation, but you quickly realize that the lattes that you have purchased over the past year, if invested, would be worth $20,052.

Suddenly, you realize that the little cup of coffee in your hand was worth almost as much as the car you were driving to work!

But this wasn’t the only year that you planned to buy lattes. “What if I kept buying lattes every day on the way to work for the next 40 years?”

“First of all, the latte was $3.55 today, but last year, it was worth $3.45. That is 3% inflation on the price of coffee. If that rate continued and I continued to buy one each morning, how much would it cost over the next 40 years? And, what would be the opportunity cost of not investing that money?”

When you get to work, sit down at your desk and quickly break out a spreadsheet to quickly do the calculations.

After a few minutes of tinkering, you calculate that over the next 40 years, you would spend $72,606 on lattes!

But more than that, if you had invested that money each year rather than drink it, you would have an extra $371,094. Suddenly this little empty cup in your hand didn’t represent a night at the theater, a short vacation or even a car. This little piece of empty paper was now a summer home on the lake!

You stand up and walk out of your office down the hall and into the bathroom. The empty stained cup falls from your fingers into the trash and in a minute you hear the sound of your summer home literally being flushed down the drain.

Maybe, I will continue to buy my morning latte, maybe I won’t. But, at least now I know how much it is costing me.

1 day = a latte grande

1 week = a night at the movies $17

1 year of lattes in 40 years = a new car $20,052

40 years of lattes = Summer cottage on the lake $371,094

Featured image credit: PEXELS


Vlad graduated from National Technical University “Dnipro Polytechnic” in Ukraine. He joined PocketGuard in April 2021 as a customer support manager with strong communicative skills. Vlad is respons...

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