Remembering all the students who came to my classes or office hours clutching large cups of coffee (a term I use loosely as any smell of coffee was overshadowed by the scents of chocolate and carmel and the drinks were frequently topped with inches of whipped cream and liberally drizzled chocolate syrup), I found this post very interesting!
A friend of mine recently told me that she and her family were spending $60 per week at a coffee house. (It is a popular company, and I see no reason to actually comment on the company. But let’s just say it rhymes with, ummm, car trucks.) That $60 per week equates to $8.57 per day (7 days per week) or $12 per day (if we assume they spent the money over five days per week). When someone tells me how much they are spending per day, I always extend the numbers out to a year. In this case if we assume a 52 week year, the expense grows to $3,120 per year. I was further told that my friend had been buying coffee in this manner for approximately 10 years.
This scenario provides a great financial planning exercise.
First, I would ask what are the “opportunity costs”
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