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The daily $7 coffee costs $2,520 per year and $100,800 over 40 years.
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Investing $100 a month in a Roth IRA over 40 years could grow to $1 million.
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38% of American adults are willing to go into debt for dining out or entertainment.
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Have you read the new report that is shaking up pension plans? Americans answer three questions and many realize they may retire earlier than expected.
“If you waste money on coffee, it’s like throwing $1 million down the drain,” says Suze Orman.
“You have to think of it like this: You’re throwing $1 million down the drain by drinking this coffee,” Orman said, as quoted by CNBC. “Do you really want to do this? No.”
Consider this.
Right now, an average cup of coffee can cost around $7. If you have coffee once or twice a week, it’s not too bad. But if you do it every day — which many of us do — it costs you $210 a month and $2,520 a year.
“It would be one thing if you had a cup of coffee once a week, maybe three times a month, but that’s not what you do. You go there every day,” she added, as cited by Yahoo Finance.
Although $2,520 doesn’t seem like a lot, over 40 years that’s $100,800 for a coffee shop.
Instead, according to Suze Orman, “$100 a month in a Roth IRA, over 40 years, is $1 million. So you have to think about it because you’re throwing $1 million down the drain after drinking that coffee. If you just used your money to buy needs versus wants, you’d find the money to invest in your retirement account.”
For those in a tough financial situation, one expense you need to cut immediately is eating out, says Suze Orman.
“To have money, you have to learn to live below your means but within your needs. How do you do that? You do that by simply buying needs rather than wants. What is a want? The need is the food you buy at a grocery store. What is a want? A want is going out to eat and doing it over and over again.”
Eating out also contributes to massive credit card debt, which can weigh on you in retirement. Most people don’t realize how much money they spend going to the occasional drive-thru or going out to a fancy restaurant. Some of us, including me, stop at Dunkin every morning and spend about $20 on coffee and a hot bagel, which comes out to about $600 a month.
Additionally, according to Bankrate.com, “Americans say they are willing to go into debt for experiences this year. Nearly 2 in 5 U.S. adults (38 percent) are willing to take on debt to travel, dine out, or attend shows, according to our Discretionary Spending Survey. The highest percentage of people would be willing to go into debt for travel, at 27 percent, followed by restaurants (14 percent) and shows (13 percent). hundred).
