My number one guilty pleasure is Starbucks. I am not into gourmet coffee or expensive coffee, but I do love my Starbucks iced coffee. I have been to many coffee shops with a wide range of prices and coffee grades, but no one makes my iced coffee like Starbucks. My perfect Starbucks iced coffee is a tall iced coffee with soy milk and one pump of classic syrup. I have tried different variations of the ingredients and the one mentioned above is by far my favorite.
In the area where I live today, the Starbucks tall iced coffee will set me back $2.25 each, and I usually go about 2 to 3 times a week. Yikes! That’s about $5-$8 a week or $20-$30 a month. Many so called financial advisers or financial planners would call out latte as the first expense to cut out of people’s budget. I think this saving on latte (in my case coffee) one at a time is called the latte effect. There is even a whole book about it. I do believe in the habit of saving, even the small amounts, but I think it should be evaluated based on the individual.
If I was going to Starbucks to keep up with the Joneses or if I have an expensive lifestyle, then yes, I think this expense should be cut out of my budget. For me Starbucks is not just a caffeine fix. It’s a place where I socialize and catch up with my friends. I usually spend hours there connecting and bonding with my girlfriends and vent about all the negative things in my life. If I go by myself, I would spend time reading, and unwind with the music while charging all my gadgets for free. In my case, the social and mental benefits outweigh the financial loss.
On top of the social and mental benefits, I take advantage of the free drink for your birthday and the bonus reward program. For every 12 purchases Starbucks gives you one free beverage or food item. Most of the time my drinks cost me $2.25 or $2.65, since I don’t go for the fancy drinks. When I get a free item, it’s a completely different story. I will maximize my reward and purchase the most expensive fancy drink or food item. When one of my non-Starbucks-coffee- drinker friends go with me, I will use my reward to buy him a $6 smoothie. Seriously, that is overpriced and I would never pay $6 for a smoothie unless it’s free.
It’s funny how it bothers me when my friends use their free item on a cheap beverage. I would often lecture them on how they should take advantage of the bonus program and use the bonus for the maximum return. One of my friends was vacationing in London and he remembered my lectures when he was there, so instead of buying a cheap drink, he used it on a free sandwich. After he came home, he told me the whole story how he stopped himself from buying a cheap beverage with his bonus. I guess all my preaching on budgeting and being frugal is finally sinking in.