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You know how much your cappuccino costs, but have you ever stopped to work out how much you spend on coffee in a month – or even in a year? And what about how much interest you could earn if you saved that money? We crunch the numbers for you to work out the true cost of your caffeine kick! Spoiler alert: the savings were bigger than we expected!
Let’s start with the Latte Factor
The Latte Factor refers to the small and often unnecessary purchases you make that cost you much more than you think – for example a latte or 2-piece chicken meal. These purchases might seem small at the time but can add up to substantial amounts.
Using 1Life Insurance’s Latte Factor calculator we worked out how much you could spend on five common purchases over five years, and how much you could earn if you save that money at an interest rate of 8% per annum.
Note:
1. We used 2024 prices in our calculations and did not adjust prices for inflation.
2. 10-year savings assume initial 5-year savings are invested for a further five years, also at 8%
And now the true costs – and savings
Fried chicken once a week or R15 494 in five years
It’s crispy, convenient and so tasty, but a weekly 2-piece takeaway chicken meal is costing you! Buy your takeaway every week for a year and you will have spent over R2 000. Keep it up for five years and your chicken has cost you a grand total of R10 400!
Amount saved over five years: R15 494
Amount saved over 10 years: R22 766
Popcorn and a movie once a month or R19 666 in five years
Who doesn’t love a really big screen and a big bag of popcorn? We priced a Friday night movie ticket at R125 and a small popcorn and soda at R95, giving you a total of R220 for your night out! Go to the movies once a month and you will spend R2 640 in a year and R13 200 in five years.
Amount saved over five years: R19 666
Amount saved over 10 years: R28 896
2 litres of soda once a week or R 5 036 in five years
Your weekly 2 litre fizzy fix will cost at least R13, which means you will spend R676 in one year, and R3 380 in five years.
Amount saved over five years: R5 036
Amount saved over 10 years: R7 400
Pizza once a week or R21 692 in five years
The weekend arrives and you can put your feet up and enjoy a yummy pizza without having to worry about doing the dishes. Bonus! Your pizza isn’t that expensive but if you buy a medium margherita for R56 once a week you are spending R2 912 a year or R14 560 in five years. On pizza!
Amount saved over five years: R21 692
Amount saved over 10 years: R31 873
Cappuccino and a muffin three times a week or R97 615 in five years
Your cappuccino and muffin, packed with caffeine, carbs and sugar, makes your morning. But take a look at what it really costs and you might not feel so perky. Buy a cappuccino with a muffin for R84 three times a week and you are spending R252 per week, R13 104 per year and massive R65 520 over five years.
Amount saved over five years: R97 615
Amount saved over 10 years: R143 428
Some tips for cutting back and saving
Even though you love the idea of all that cash in your account, giving up those weekly treats doesn’t seem easy. However, there is more than one way to spend less so you can save more.
1. Give up gradually
Going cold turkey is tough. Why not try two cappuccinos a week and then maybe just one? Or plan your pizza night every second week and then third and then fourth! Gradually you will become accustomed to doing without and you will be saving cash! You may even be able to cut out the expense in total!
2. Do it yourself
You can make coffee at home and take it to work, which will save you money even if you splurge on a coffee machine! Or you can make your own pizza and fried chicken. You can even set up a movie night at home, with much cheaper homemade popcorn!
3. Use rewards programmes to “buy” your lattes
Use the rewards offered on loyalty programmes, such as special discounts and points or cashbacks. You may qualify for free movies, free coffees or even a discount on takeaway pizza or fried chicken.
Go for it
Want the extra cash? Motivate yourself to spend less on ‘Latte Factor’ purchases by working out how much cash you could have in your account if you saved instead of spending! The final numbers could be just the incentive you need to cut back on coffee and fried chicken. Give it a try – we know you can do it!