Is that Extra Cup of Coffee Worth $64,000?

I just read an interesting article on Reuters’ site about how Starbucks is testing $1 coffee and free refills in its Seattle locations. I love it when prices go down and/or you can get more for your money!

It’s sure an interesting sign of the times. I wonder, is Starbucks testing cheaper coffee because people are spending less on pricey brews? I hope so – not that I have anything in particular against Starbucks. I feel the same way about all designer waters and the other beverages we buy at fast food joints, vending machines, and convenience stores.

Why spend a fortune if you can just as easily save one?
If Starbucks will cut the cost of your caffeine habit in half, that's great. Go for it! But you can easily do it yourself, without totally depriving yourself of your favorite drink. For example, making that second cup of coffee at the office or bringing coffee from home could easily save you a few hundred dollars a year on beverages that come in disposable take-out containers, cans, and bottles. A cup of coffee or a can of soda here or there may seem like a small thing, but over time, the money really adds up.

However you do it, let’s say that in the course of the work-week, you spend a dollar or two a day less on drinks, and save yourself $300 a year. If you work from when you’re 22 to 62, that’s a 40-year career. Put that $300 a year under your mattress, and at the end of those four decades, you’d have $12,000.

Invested at 6% a year, that $300 would amount to $46,429 when you’re ready to retire. But remember ...  you would have paid for those beverages with after-tax dollars. To have $46,429 after taxes, someone in the 28% bracket would have to earn nearly $64,500.

I'd much rather have the $64,500. How about you? Interested in other painless ways to save? Click here.

Nancy Castleman – Co-author of "Invest in Yourself: Six Secrets to a Rich Life" and founder of Good Advice Press. Nancy has spent the last 23 years teaching people how to get out of debt, save money, and live better on less. She writes on all these subjects for CreditBloggers.com.