It’s early. You were up all night studying for today’s big exam. No amount of rubbing your eyes can eliminate your yearn to jump back into bed. You haphazardly shower, dress, and grab your bag for another day of school and study. The only thing getting you through your morning is the thought of a nice, warm cup of caffeinated heaven. Skim mocha latte, grande cappuccino, tall dark roast with two sugars or whatever your favorite may be.
You hand over the $5 bill with comfort and delight and before the frothy goodness hits your lips, you already feel more awake and ready to ace your upcoming exam.
Five dollars. It seems like such a small amount of money, a drop in the bucket, if you will. Once you start working, you’ll be making five, 10, 20 times that an hour, so using your student loan money to pay for that java today should be no big deal tomorrow.
If you really punch the numbers, buying that five-dollar coffee every school day will cost you around $1300 per year. Although it seems like that five dollar bill is coming from your wallet, really it is coming from your student loan funds. When you think of it that way, you have to consider that there is interest accruing on that $5 (6.8% on Stafford or 8.5% if GradPlus), capitalization of that interest, not to mention the time it takes to pay the student loan back. Now what used to look like a simple caffeine buzz is adding up to an additional $50 per month in your student loan payment (with a 10-year repayment plan).
I know this is going to spark some resentment, and don’t get me wrong – I need my caffeine, too – but when it comes to using your student loan money, think twice. A coffee machine, coffee filters and a can of Folgers will end up being a much better investment!
I make sure to buy my coffee in bulk at CostCo. Though you may be saving by buying your Starbucks brew from the grocery store, you're still paying an arm and a leg. Buy in bulk at CostCo, and you save yourself time (because you're shopping less) and money.
Also, just taking the time to brew your own coffee in the morning helps you wake up while you dress to the sounds of percolating coffee.
I always try to buy my gas either at Sam's Club or at the grocery store using 'gas points'. Both of those options take ten cents off per gallon. I use a lot of gas, especially now since I am driving to residency interviews, so I think this ought to really add up (though I haven't actually calculated the dollar amount I'm saving!)
and as for the after-exam party...drinking at home instead of at the bar saves a ton!
Heck, you don't even need a coffee maker. I think a French Press makes better coffee anyway - and no filters to buy.
This is so true and can be applied in other aspects of life. A friend of mine figured out they spent over $1000 a year on cigarettes.