Drive Research reports 51% of Americans get their caffeine fix at least once a week from a coffee shop. And when you find yourself spending $7 for a coffee shop latte, the old adage “Stop buying expensive coffee and you can afford a house” makes sense.
This cliche piece of financial advice leans heavily on the latte factor. That’s the idea that if you stop buying expensive coffee every day, you can eventually afford to buy a house. For many people, that’s never felt quite right; it felt more like an insult.
A $6 or $7 drink isn’t what’s standing between most of us and homeownership, especially in today’s market. The math doesn’t add up to a monthly mortgage payment, but the logic behind the advice still holds power, because it’s not really about the coffee.
Breaking it down
Skipping a daily coffee run forces a pause. Time to ask why you spend $150-$200 a month on something you could make at home. And once you ask that, it’s easier to question other auto-pilot expenses: takeout lunches, ride shares, streaming bundles, impulse online orders. You don’t have to give up every small joy, but you start to notice when they stop sparkling joy and begin to feel like a habit.
This shift, when it becomes aware of the money that trickles out, is when the real impact happens. Once you begin to note where the money goes and how much of it is going, you may well be ready for changes.
They don’t have to be major, you can still enjoy an expensive coffee. Oftentimes, the shift from “I have to do this,” as in I have to buy a coffee every day, to “I get to enjoy an expensive coffee today” makes a huge difference in perception. You know the saying about spring wouldn’t be so sweet if we didn’t have to live through winter? Yes, that same feeling applies here. When it’s a special treat, it tastes or feels even better.
You don’t have to live without
It isn’t about living without the things you enjoy. Is that even living? You can still get coffee once or twice a week, but you should also start making it at home. Learn the art of creating the perfect iced coffee, which is a great place to start for spring and summer enjoyment.
But then maybe you begin to pack lunch more often, and make bigger dinners so you have things you want to eat available for those lunches. Or make yourself adult lunchables if that is what you like. You won’t eat what you don’t like, so make sure to pack or make things you like.
Those changes? They can add up to a few hundred dollars a month. That kind of extra margin in your budget can go toward credit card payments, emergency savings or even just some breathing room. It’s not flashy, but it’s practical. And over time, practical is what works.
Once you cut coffee, keep cutting
Skipping a daily coffee or takeout lunch will not magically give you the keys to your own home, but it can fire up a chain reaction. Once you’ve rethought those small habits, it’s easier to question the rest. Here are a few simple ways to keep that momentum and make room in your budget without feeling like you’re cutting corners.
Cut back on gas station goodies, drinks and snacks seem small, but they add up fast, especially in the convenience store or gas station where prices are significantly higher. Buy your snacks in bulk at a warehouse and keep your bag, desk or car stocked up. Or make a batch of your favorite muffins for snack attacks in the car.
Audit your monthly subscription payments. And no, you don’t need to pay for an app to help cut back on apps that you pay for. Simply review credit card and bank statements to see what is on auto-debit. Forgotten fitness apps, streaming services and delivery perks can quietly drain your budget. Cancel what you don’t use and keep only what earns its keep.
Make a grocery list and stick to it. Plan meals, shop your pantry first and make a shopping list every single time. Meal planning and eating at home are two of the most underrated money moves. Use the slow cooker and you’re hitting trifecta goals right there. Going out to eat should be something you only do on special occasions, not a weekly or daily option. If impulse buys cost you a lot of money, consider using free online grocery ordering.
Give yourself a treat budget and use it every month. Take it out in cash if you can and only spend it on treats. It is so much harder to hand over cash than a card. Remember, you’re not saying “never,” you’re just saying “not every time.”
Let the latte factor work for you
In the end, it’s not about the latte. It’s about waking up to the small, easy-to-overlook choices that quietly drain your money without adding much to your life. While you’re stuck being angry over the implication that giving up your daily coffee is costing you your dream house, you’re missing the bigger, wider vision.
Breaking the daily coffee habit might be the first time that you pause and ask, “Do I really need this?” That one question has a ripple effect. You start to notice the other things you’re spending money on, not because you can’t have them, but because maybe you don’t even want them anymore. That’s the shift, the real power behind this much-maligned advice.
Laura Sampson is the writer behind Little Frugal Homestead. She and her husband, Jack, are two Gen-Xers living in a 90-year-old farmhouse in Alaska. They keep chickens and honey bees and grow a garden and small orchard; their dream is to live well within their means on their little piece of land.