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This is slightly off topic as it does not enitrely work with the Double To A Million Challenge, however I thought that it might an appropriate place to post this. As in a ways it is an idea on how to save money and make extra money available to you.
When it comes to saving money it does not always have to be about giving something up to save that money. It just depends on much you need to save money and how much you are willing to change to save that money. The specific thing that I am going to look at is a daily coffee. Do you really know how much this costs you?
What is the true price of a cup of Coffee?
So I am just going to work with the menu that is at the table right in front of me. Which is for a local coffee shop, when I open the menu the price of a Cafe Latte is $4.30 (I am in Australia so local price and currency). This is the price at a Franchise chain of coffee stores in Australia. Will it surprise you if I say this is not the full price that you pay for coffee (and I don’t mean sales tax, in Australia that is included in the price)
The coffee shop where I can buy this Cafe Latte for $4.30 is 9km from my home. So to go and sit down and have a Cafe Latte is a total of 18km driving. This is where it gets interesting. If I was to go with the allowable claim per kilometer by the Tax Department, I would be looking at 74cents per KM, or $13.32 is the overall cost I could claim if this was a business trip. I thought this maybe going a little far though. For my car it costs about 10cents per KM in fuel, or $1.80 for this trip. Which now makes this Cafe Latte come in at $6.10.
The next thing is time, to make this drive (not to enjoy the Cafe Latte as that is going to be the same whereever you go). It takes me about 15 minutes to drive this 9km, due to traffic lights and finding a parking spot, ect. So this is a total of 30 minutes. If I am at work I get paid around $22 an hour. So this adds another $11 to the cost in lost productive time. Keep in mind though that this figure could be a lot higher, depending on what you earn and especially if you are actually taking away from working time to make this drive. So Now the $4.30 Cafe Latte is costing $17.10 in product, transportation and los productive time.
Now I wonder if I have actually forgotten anything in this. Well I hope not, otherwise this simple Cafe Latte may end up costing us over $20…. The good thing is that I do actually get two each day when I do go and it does not cost me anything more then this.
How to Save on this cost…
Now all is not lost of course there is plenty of ways that it is possible to save on this cost, and I am going to go over the specific’s as well as the general so you might be able to apply it to your daily cup as well.
The cost of the Cafe Latte, is one of the first things that you can work on. The good thing is that I don’t mean you need to barter and trade with the cafe owner to get his price down. But you can look at other options in the area. As luck would have it I found a Coffee Shop of the same chain closer to home and the price for their Cafe Latte is just $4.10, so here is a 20 cent saving straight away. Also another local cafe offers a Cafe Latte for $4.00, I stick with the chain store though because I have a daily Buy one get one free offer.
Having found the chain store that is closer to home also saves me on driving distance, rather then driving 9KM each direction I now drive just 3KM in total. Which saves me $1.50 in fuel per day, plus the other wear and tear on my car. So far I have saved a total of $1.70.
The biggest saving though is in gaining more productive time, through not having to drive so far. I still lose some time to having to find a parking spot, however not quite as bad. Overall I may spend about 10 minutes driving and parking. This equates to a cost in lost productive time of just $4, rather then $11. So here is another saving of $7, which brings the total saving overall to $8.70
So what does the Cafe Latte cost now.
Looking at the three costs now, the price of having a Cafe Latte does come down somewhat. It started out for me at $17.10 each day. Now with the price at $4.10 + 30cents for fuel and $4.00 in lost productive time, gives a total price of $8.40 a total saving of $8.70, which is less then half the original cost.
Now while I do go to the chain coffee shop because I get buy one get one free each day, even if there was not one closer to home. I could save still by visiting the other coffee shop i mentioned before. Just not quite as much. I would be looking at $8.00 for two Cafe Latte + 30cents for fuel + $4 in lost productive time. Which comes in at $12.30, this would still give me a saving of $4.80.
Small amount day to day but when you look at it over the legnth of a year it can really add up, quite considerably. The first saving of 20 cents each day on the Cafe Latte itself over the period of a year adds up to $73.00, which could pay for a nice lunch or dinner out with your partner.
When it comes to saving $1.50 on fuel each day you are looking at almost $550.00 per year. That is seven full tanks of fuel in my car. But more importantly that is 5,500 KM less that you are driving, less wear on your tyres, brake pads, lower KM on your vehicle odometer, and less frequently needing a service.
The most important part for me though is the time saving, where I am not actually in the car driving and/or looking for a car park. This equates to over 120 hours per year. 20 minutes may not seem like a lot each day, but when you put it in a time frame over a year it is the same as three full 40 hours work weeks.
So the choice is yours, it just depends how much you are wanting to save. If you want to save just some of the money you are spending, then follow the above, but the above makes for an even more positive outcome if you were to choose to do away with the coffee all together.
