Friday, September 22, 2006

Starbucks Raising Prices, Time to Kick the Habit?

Starbucks announced that they're raising prices for the first time in two years, by 5 cents a drink. Doesn't really sound like too much, but maybe it's a good time to evaluate how much your Starbucks habit is really costing you.

The average price of a Starbucks Tall Latte is now $2.80, going to be $2.85. Plugging those numbers into the "Benefit of Spending Less" calculator at (assuming you buy one every work day each month, you'll spend about $63/month), the real cost of that habit is $11,725.00 over 10 years, assuming you had saved and invested the amount instead. Here's the output cut-and-pasted from

You could save $11,725 in 10 years.

By spending $63 less per month and investing that amount at 8.50% you could save $11,725 before taxes in 10 years. If you pay taxes on your savings, this amount would be reduced to $9,997 with a combined state and federal marginal tax rate of 35.0%.

Results Summary
Monthly savings (from spending less)$63
Total savings before taxes (or tax deferred)$11,725
Total savings after taxes$9,997

Your input values

Input Summary
Monthly savings$63Years to save10
Rate of return8.50%Total contributions over 10 years$7,560
Federal tax rate25.0%State tax rate10.0%

1 comment:

25 Ways I Save Money » Getting To Enough said...

[...] Drink the free office coffee instead of Starbucks. Check here for a post on how much this could save you over 10 years. [...]