Costa-lota of coffee!

In my posts below I hope you’ll agree it’s clear that in order to get out of the rat race you must slim down on your expenses. Here’s a great example to illustrate how easy it can be to reduce some unneeded expenses!

I know a receptionist who has two Costa coffees a day – one in the morning and one just after lunch. She has a medium latte I believe. I ask her why she doesn’t just have instant coffee because she must spend a fortune on the stuff and she replies “it doesn’t taste as nice”.

Well, let’s look at just this simple example of buying a coffee twice a day. Now I have no idea how much this receptionist gets paid, but let’s assume it’s about £16,000. This sound reasonable? So her monthly paycheck would probably be in the region of £950-£1000; let’s say £1000 for arguments sake.

Ok, now let’s analyse this situation further. Of her £1000 a month she would almost certainly have to pay the normal monthly expenses everyone else does. I have listed them below with an estimate of cost:

Rent: £350
Bills & Council tax: £200
Phone: £20
Petrol: £40
Food shopping: £100
Other (clothes, loans, etc): £150

There may be more, but let’s just use this as an example.

So, out of her £1000 paycheck she has £860 of cost. This leaves £140 as disposable income.

Right, let’s look at this coffee situation. One coffee from Costa may be nice, but then it does costa lot (see what I did there?). Let’s say £2 a cup, which is actually less than I think they are. So 2 cups a day, 5 days a week = 10 cups a week = 40 cups a month = £80!!! So in this example, I estimate the receptionist is spending MORE THAN HALF her disposable income on coffee!! 57% in fact!

And if that coffee costs £2.50 a pop it jumps to 71% - a shocking figure!!

Now if this receptionist came to me and asked “Jon, how can I get out the rat race” you can probably guess my first response. Cut out the coffee! Maybe treat yourself to one every Friday afternoon, but buy a big jar of instant coffee for the rest of the week.... This could save her £70 a month, amounting to £840 a year – not an amount to be sniffed at!

So, this is just one example of how you can slim down on expenses!

Until next time…