• 1 hour 3 Restaurant Stocks In Full Recovery Mode
  • 9 hours Bitcoin Is Driven By Testosterone
  • 5 days Quantum Computing Is The Newest Megatrend In Silicon Valley
  • 6 days How To Invest In The Cybersecurity Boom
  • 8 days Investors Are Patient With Unprofitable Giants
  • 10 days Wells Fargo Back In The Scandal Spotlight Once Again
  • 12 days 5 Stocks To Keep A Close Eye On This Year
  • 13 days As Auto Giants Flail, Look To Chip Stocks For Gains
  • 14 days Central America Is Ready For The Bitcoin Hustle
  • 16 days China’s Video Game Restrictions Unlikely To Slow Down Booming Industry
  • 17 days Top Performing Stocks As Inflation Fears Grow
  • 18 days US Airline Stocks Take A Beating On New EU Restrictions
  • 19 days This IPO Could Open Sustainable Fashion Floodgates
  • 20 days Crypto Crime Nets Another $2B Fraudster
  • 22 days This Week’s Hottest Meme Stocks
  • 23 days Why World Markets Should Be Watching Germany Closely
  • 25 days Could ‘Cultured’ Meat Rival The Plant-Based Megatrend?
  • 28 days ‘Easy Money’: Crypto Is Still Attracting Newbie Investors
  • 29 days Foreign Syndicates May Have Stolen Up To $400B In COVID Benefits
  • 30 days Gold Jumps Above $1800 Ahead Of Jackson Hole Summit
Airlines Could Recover, But Crew Remain Elusive

Airlines Could Recover, But Crew Remain Elusive

American Airlines is canceling hundreds…

Why World Markets Should Be Watching Germany Closely

Why World Markets Should Be Watching Germany Closely

On September 26th, Germans will…

Military Coups Are Big Business

Military Coups Are Big Business

Military coups are rarely altruistic…

Josh Owens

Josh Owens

Writer, Safehaven.com

Josh majored in International Relations at the University of Edinburgh and is currently the Content Director at Oilprice.com. Josh has over 6 years of writing…

Contact Author

  1. Home
  2. News
  3. Breaking News

An American Habit That’s Killing Retirement Funds

Coffee

Americans really love coffee. We mean, really. They love it so much that they spend more on coffee than they do on securing their financial future.  Think: $5 per day on this luxury of temporary happiness that no one is willing to sacrifice even for a debt-free life. 

And there is an eternal debate over whether kicking this habit would represent significant savings. 

Simple math shows that it would. 

According to Suze Orman, personal finance expert and television host, brewing java at home instead of buying it every day could possibly make the difference between retiring comfortably and not retiring at all. 

“You spend $1 to $3 on a cup of coffee, which is approximately $100 a month … $100 a month in a Roth IRA over 40 years is $1 million. So you need to think about it as you are peeing $1 million down the drain after you are drinking that coffee,” Orman said in a CNBC clip earlier this year.  

Kevin O’Leary, one of the investors on the entrepreneurial reality show Shark Tank, holds a similar view about the American coffee habit. 

“I never buy a frape-latte-blah-blah-blah-woof-woof-woof,” O'Leary told CNBC’s ‘Make It’. Instead, he brews at home. “It costs about 18 cents to make it, and I invest the rest.”

The United States is the leading consumer of coffee in the world, with approximately 150 million Americans drinking 400 million cups of coffee per day. That’s more than 140 billion cups every year. 

According to an Amerisleep survey, the average 25- to 34-year-old reported spending $2,008 per year at coffee shops. 

Likewise, people working in the finance and insurance industries are reportedly spending an average of $709 a year at coffee shops, while workers in transportation and warehousing are the most frugal, spending some $150 annually. 

(Click to enlarge)

Source: Amerisleep

While it’s bad news for the average American pocketbook and retirement fund, it’s great news for the coffee shop business.

The U.S. coffee shop market grew to a $45.4 billion valuation last year, according to  Allegra World Coffee Portal’s 2019 Project Café USA report. When the survey was conducted, there were 35,616 stores nationwide, with that number expected to hit 40,800 outlets by 2023. 

Related: Battery Metals Face Looming Supply Crunch

In this coffee environment where the social trend has shaped our way of life, it can be difficult to constantly say no. And we’re having to say ‘no’ a lot these days, whether it’s too processed food, sugar, gluten, dairy or GMO … 

But those are all health-related, and this time it’s about savings. 

According to the National Institute for Retirement Security, only about one-third of Millennials (34.3%) are saving anything at all for retirement, although two-thirds (66%) work for an employer that offers a retirement plan. And those Millennials who do save for retirement take an average of 7.5 percent of their salary, found Fidelity survey

It’s hard, though, to blame it all on coffee when Americans are spending large amounts on non-essential items. 

According to research commissioned by Ladder and conducted by OnePoll, the average adult in the U.S. spends $1,497 a month on nonessential items, which adds up to around $18,000 a year. 

The results showed that the average American spent around $20 on coffee drinks a month, along with $209 on dinners at restaurants and $189 out drinking with friends. 

Coffee may be one of the most consistent things, but if you can’t do without, find another non-essential to get rid of. 

By Josh Owens for Oilprice.com

More Top Reads From Safehaven.com

Back to homepage

Leave a comment

Leave a comment