Can skipping a cup of coffee make you rich?

I was standing in line at the local Circle K this week feeding my Diet Coke addiction. In front of me stood a woman buying a carton of cigarettes. Not being a smoker, I didn’t know the cost of a carton. I looked at the register and was shocked. The price for one carton, with tax was $104.96. A carton of cigarettes is typically 10 packs or 200 individual smokes. That’s $0.50 cents a cigarette. A heavy smoker could go through at least a carton a week. That ends up being $407.84 a month or $4,804.08 per year.

I personally know a couple who were both heavy smokers. Both smoked at least 15 to 20 cigarettes a day. They challenged each other to quit. It was hard, but they persisted. After they quit, they were amazed how much extra income they had as a result of giving up cigarettes. The savings amounted to more than $8,000 dollars a year. They're now able to pay for a cruise with the money they saved.

Let’s take an example of coffee. Suze Orman claims that skipping a cup of coffee over your lifetime can make you a millionaire. My take on it is, that depends. There are a number of factors to consider. Are you buying the cheapest cup of coffee? How many times a day? Is it a straight black cup of coffee or is it a “Venti Salted Caramel Mocha Frappuccino”? Are you buying once a day, twice a day, three times a day?

The average price of Starbucks coffee from their menu is $3.94 plus tax. Here in Orange County, California the sales tax is high, approximately 9%. Add that to the charge and your cup of coffee is $4.29. If you hit up Starbucks three times a day, you would be spending $12.90 a day. If you went in every day for a month it would be $387.00 or $4,644 a year.

Cutting out one trip to Starbucks each day would save you $1,544.40 a year. Reducing your Starbucks to one trip a day would save an additional $1,544.40. $3,088.88 is significant savings. Over 30 or 40 years, it does start to add up.

It costs between $0.16 to $0.18 cents to brew a cup of coffee at home according to Gabrielle Moss in an article written for Bustle Online Magazine, titled “Exactly How Much Money Skipping Your Daily Coffee Habit Would Save You, October 15, 2015,” or for two cups of coffee every day for a year, brewed at home, it’s about $130.

I won’t get into alcohol, or eating out, but they’re expensive as well.

But is it worth it? Is it worth cutting out vices or wants verses needs? Maybe the cup of coffee is a need not a want. But can you do it cheaper.

We all have things that we do that are wants and not needs. My suggestion is the review your personal budget, review your business budget, look for the things that we may think are needs, but are actually wants. Most of the extraneous spending doesn’t have to be cut out completely, just reduced. Instead of going to Starbucks for 3 cups of coffee, cut it down to one or two. Instead of eating out every day, eat out twice a week. Jack Dorsey, Twitter’s CEO only eats twice a day, skipping lunch. Instead of a pack of cigarettes a day, half a pack.

My personal vices, at least the ones I’m willing to share, are eating out and Diet Cokes. I’ve been trying to stick to eating out only a couple of times a week, going for the cheaper places, and for lighter meals. What I’ve found is that I’m not only saving $100 to $200 dollars a month, but I have more energy and am more clearheaded at the end of the day by skipping a few meals. My Diet Coke addiction, well I’m slowly working on that. As I've always said, "Diet Coke is the disease of all accountants."

There are many apps and programs out there to help you with your personal budget. Here are a few of them:

• YNAB (You Need a Budget)

• Mint

• Mvelopes

Will you get rich making some small expenditure reductions? Again, the answer is maybe. But tracking where your money is going is the first step to financial freedom.

Speaking of Freedom, Happy Fourth of July!