According to a recent survey, half the American workforce spends $1000 on coffee each year.
Every morning before work, Angela Warner bought a tall latte with skim milk. $3.05 off the debit card.
“The problem was it was never just a cup of coffee,” she said. “I would always end up buying a granola bar, fruit or muffin as well.”
So, said Warner, a legal assistant for Chin & Curtis, LLP in Boston, $3.05 ended up being five bucks and change.
After seeing her expenses add up, she cut down buying coffee to twice a week. Now, after a couple months of tapering, she has eliminated the routine altogether, taking an extra four minutes in the morning to make coffee in her own kitchen, with her own French press.
People just like Warner were interviewed in a recent survey of the financial attitudes of employed Americans.
Half the American workforce spends over $1000 on coffee each year, and another two-thirds spend up to $2000 on lunch-break meals, the survey, conducted by Accounting Principles in New York City, found.
“People are not typically aware of what they spend,” said Dr. Marty Martin, a financial psychologist for Aequus Wealth Management in Chicago. “People don’t track what they spend, nor do they necessarily allocate how much they spend per week.”
Workers may not be aware of what their weekly coffee and lunch tab is costing them, but what drives them to buy this stuff in the first place?
Is this a personal-finance question, or a deeper issue?
“You’ll see people almost caress a cup of coffee,” said Martin. “It is a kinaesthetic feeling. There is a whole experience and sensation that is pleasurable. It is a way to have short-term pleasures day-to-day, especially if work is stressful.”
Going to a coffee shop or grabbing lunch is a way to take a break from the work environment, and is also a way to socialize.
“In the morning or afternoon, getting coffee is a social thing to do with coworkers,” said Warner, 23.
In fact, young professionals such as Warner spent almost twice as much on coffee than those 45 or older, the survey found.
While older people may have more money, Martin said they also have more financial responsibility and are more inclined than younger people to save for the future.
Boredom is another explanation. “If you’ve been going to coffee shops for 20 years, they may no longer be novel and interesting,” Martin said.
Workers' spending habits also seem to differ by gender. The survey found men spent about twice as much on lunch and coffee as females.
“In general, men tend to be more prone to having stimulants of all types. Some men may also be self-medicating with both food and coffee,” Martin said.
Women tend to be comfortable expressing their feelings and engaging other women to talk, said Martin. “Men don’t have that. If they are feeling down, they can ingest something in order to get rid of that feeling.”
Whether workers are spending to feel better or to socialize, survey results suggest spending awareness. Thirty five percent of employees made a financial goal to bring lunch instead of buying it in 2012, the survey found.
A noble goal, perhaps, but financial experts question practicality or quitting cold turkey.
“It is unrealistic to believe that people will deny themselves the things that they value for an extended period of time without a balancing factor,’” said Michael Kay, a financial-life planner and president of Financial Focus, LLC of Livingston, NJ.
Martin suggested taking baby steps. “You really have to micro plan,” he said.
If you are going to bring a sandwich instead of buy lunch you have to know when you’re going to buy the food, when you’re going to make the food and every detail in between, he explained.
“It’s about gratification. So, if you need to indulge sparingly to achieve your goals – go for it, but avoid the big mistake,” Kay said. “Don’t go without your latte and then go out and buy a 50 inch flat screen as a reward for foregoing the coffee.”