Join me for a cuppa! In today’s post, I’m going to show you how you can get anything – any everyday thing you need or want on a regular basis – for free. For life. Including coffee.
To make it easy, I’m going to use really simple numbers, but I’ll explain how I came up with them at the end.
Imagine you want a coffee. You have a couple of choices. You could spend $4 on getting a ready made coffee. OR you could make a coffee yourself.
Step 1: Reduce the cost
Now, you could buy a jar of coffee for $20, or $10, or $4. Any of these represents a massive saving, as you will be able to make, say, 30 or more coffees from any of them. But let’s go for the cheapest. You buy a $4 jar of coffee, and make yourself a coffee.
So far, you haven’t actually saved any money. You were going to spend $4 on Starbucks or whatever, but now you’ve spent $4 on a jar of coffee. Whatever.
But the next time – later that day, or the next day – instead of buying another $4 coffee, you have a FREE COFFEE. And this happens over and over again.
That jar of coffee that cost you $4 will give you 49 “free” coffees and save you $196.
Okay, if we’re sensible about things, these coffees aren’t truly free – yet. They cost about 8c each. Stick with me.
Step 2: Actually invest the difference
Now imagine that you saved the $196. If you swap one or two purchased coffees a day for homemade ones (50 per month), in a year, you will have saved $2,352.
If you invested that money in a bank account that pays 3% (my current savings account rate, and a historically rather low one), you would earn $32.61 on your balance by the end of the year.
Step 3: Use your earnings to offset your costs
So the following year, you could use that $32 to buy 8 jars of coffee. For NOTHING. So in the second year, rather than purchasing 12 jars of coffee out of your own pocket, you only have to spend $10 on two.
By the end of this second year, if you keep saving that $196 per month, you will have $4,704 in the bank ($2352 from the first year, + $2352 from the second).
Now this is where the magic happens. Instead of getting $32 in interest, you now get $104.15.
This means that in the third year, you will be able to get ALL of your coffees for free ($104.15 – $48 = $56.15). And you will STILL have money left over that is PURE PROFIT. That $45 remaining, you can spend on anything.
Like some biscuits to go with your coffee. One of my favourites, cream filled wafers, costs only 66c a packet. You could buy a pack per week and STILL have $12 of profit left over.
Or perhaps you’d like to go to Starbucks FOR FREE. You could afford to go 14 times – more than once a month – just on the interest earned and not pay a dime out of your own pocket.
The fine print
For the record, the average cost of a coffee in Melbourne is currently between $3.50 and $4.50, averaging around $3.98. A black coffee from Starbucks is slightly cheaper, at $3.20 AUD. The worldwide average for a grande cup of black coffee I calculated using figures for the 18 ‘Starbucked’ countries surveyed by Hopes&Fears, is around $3.80 USD. Using their exchange rate, this comes out to around $4.88 AUD. So to make it simple, I’m going to call it $4.
As for jars of coffee, I used prices from one of Australia’s biggest supermarkets, where the cheapest jar came in at $3.70 for 200g ($1.85 per 100g). But because I imagine few people will want to jump straight from bought coffee to the cheapest jar, I’ve allowed for a more expensive jar – $4 per 100g. There were two choices available at this price point. Seeing as I used the online store, which is often more expensive, it’s quite possible that you could find a better deal in person, especially if you look out for catalogue specials. The recommended number of servings is based on the jar label.
Milk or sugar?
If you drink your coffee with milk and sugar, obviously the prices will be higher. But you may even find that you can get used to cutting these out. I used to drink half milk, half water coffee with one spoon of sugar, but now, am a convert to black. We cut out adding sugar to our drinks when a family member was diagnosed with diabetes.
As for the milk, it wasn’t really a conscious effort. One weekend we were running low on milk, and in the bad weather, didn’t feel like going to the supermarket, so we rationed it. To our great surprise, we found that we didn’t really miss the milk once it was gone, having drunk it in decreasing quantities. Give it a go!
From coffee to freedom
As I promised at the start of this post, you can apply this method to anything. Want free bread for life? Swap out your $7 loaf for a 85c one, or start baking your own. Want free toothpaste? Ditch your $9 tube for a $1 one. Save the difference, invest it, and use the profits to pay your costs. Want to get there faster? Don’t just save the difference – save all the money you possibly can, and invest it wisely.
The reality is, if you have a low income, and a lot of responsibilities (a sick partner. young children. parents who need looking after) complete financial freedom may not be attainable. But most of us can make small changes like this that make a big difference.
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Today’s featured image is of the hot chocolate and churros that my $4 bought me here in Spain – an occasional treat that marks a break from my usual cup of instant black coffee!
How do you save on coffee or other daily expenses? Pour yourself a cuppa and let me know in the comments!