Starbucks is beginning to test $1 “short” cups of drip coffee with free refills in Seattle. Other chains are offering good alternatives at lower prices, so Starbucks might be feeling out the market to avoid getting beaned by the competition.
Pricey drinks are of course a favorite example of David Bach, author of The Automatic Millionaire : A Powerful One-Step Plan to Live and Finish Rich and coiner of The Latte Factor®. Its significance is that little expenses over time have a large negative effect on one's net worth. Little as to the little habits that can cost us dearly over decades. Even a $1 per day habit is expensive. Five dollars saved per week for 25 years will become over $11,000 if invested at 4% (let's be realistic here!). And this is after the cheaper Starbucks started its testing.
The bottom line is that an inexpensive habit is still a habit and it still costs money. If a habit seems insignificant, try tracking your expenses to see how much it costs on a monthly basis, and plug the number into a compounding calculator with some modest interest rate to see what it will really cost you over the rest of your life.
If this number is more of a bite out of your retirement than you'd like, you can look for a less expensive replacement. For example, a coffee maker with a thermal carafe does a really good job at brewing coffee and you can brew a whole pot of coffee for less than the cost of an average cup of coffee at Starbucks.
I'm all for cheaper prices, but Starbucks is still making money on this deal, and if you end up getting sick of the cheap drinks, the more expensive ones will be right there for you. That's what they're counting on if this cheap coffee thing takes off.
Good ole starbucks. The masters of marketing. I still think their coffee is awful and amazingly over priced. Give me Dunkin Donuts any day!!
Yes, the $1 still seems steep considering you can make coffee at home yourself for about 5 cents a cup.
Yeah, I still don't need coffee that much. Especially since, as Chuck points out, you can make it a lot cheaper.
I expect it'll bring them more business from people who just want a plain coffee. Clever idea.
"So they won't get beaned by the competition" . . . that was a GOOD one! You made me laugh! Thanks a latte.
The company I love to hate (or hate to love). 🙂
I don't do Starbucks in-store drip because it's over-roasted and over-brewed. I don't do Dunkin because it's crap (and it used to be better). I don't do McDonalds.
I love my coffee maker, and my bag of Allegro beans.
You have just inspired a post.
Hi:
Taking a different approach, looking at the savings required, to pay for your Starbucks habit. You would need $15,000 in savings to support your habit.
Yuban!
Ramsay
Hmm…I wonder how many people end up forgetting to use their free refills
cool stuff a $ 1 short cups of drip coffee would help…
but one of the things I love about starbucks is they allow you to customize your beverage anyway you want it.
A habit. As for me, that’s one of the most used nature of a human. Well, there are some habits that don’t need money though. So you can never say that they cost too much.