How Many Bucks Are You Spending at Starbucks?

Buyer Beware

A few weeks ago, I noticed that I had started a bad habit. I began treating myself to a cup of coffee a few times a week on my way to pick up the kids from school.

The funny thing is, I don’t even like coffee that much! But when Starbucks decided to build a new drive-thru right on my direct route each afternoon, well, it was just so convenient.

Of course, I happened to pass by the new location whenever I was at my most vulnerable as a consumer – a mom transitioning from her workday to a busy afternoon shuffling around kids and juggling an endless list of to-do’s.

With my stress levels rising, what better to find relief than with a Salted Caramel Mocha Frappachino or perhaps the ever-popular Pumpkin Spice Latte?

[Related: Five Ways for Women to Claim Their Financial Power]

And I was certainly not alone. The car lines in the mornings were long, with consumers eagerly willing to part with their cash for an early “reward” of coffee to help them ease into their 9-5.

Someone definitely knew what they were doing when they decided to build here. Although there’s another Starbucks only a few blocks from this location, not to mention at least a dozen other coffee shops within a few miles as well, I rarely frequented them because they did not have the drive-thru option (parking in my town is notoriously difficult). Adding the drive-thru window was pure marketing genius.

Starbucks — like so many other companies — strategically fostered a new spending habit in me and countless other consumers. (Remember the old “You deserve a break today?” McDonald’s commercial, or the more recent, “Share a Coke with a Friend” campaign?) Millions upon millions are spent in marketing and ad dollars to get consumers to spend at exactly the right moment, with clever slogans, convenient locations, store displays at just the right eye level, and now, with social media tracking your online behavior 24/7.

Thankfully for me, after about three weeks and several cups of flavored concoctions (not to mention a few headaches from the added sugar I was consuming), I realized that this was probably not the best habit to start. But for many people, these habits around consumer spending become ingrained so quickly; before they know it, they become line items in one's budget that are harder and harder to negotiate. Suddenly, what begins as “discretionary” spending starts to look like essential.

If this sounds familiar, here are three things to keep in mind when it comes to consumer spending.

First, be a smart consumer and know that companies are constantly trying to manipulate you to spend. 

We can pass all the judgment we want, but the bottom line is, corporations are concerned primarily with their own bottom line. The more educated you are over how they try to change your behavior and get you to spend more, the easier it will be to resist those tactics. Buyer beware.

Second, be aware of your own tendencies, where you are more likely to fall prey to big business tactics luring you to spend. 

Are you someone who, like me, is often tempted by convenience and who might overspend when it comes to things like food delivery, Uber, Amazon Prime or a well-placed Starbucks drive-through? Or perhaps you are a bargain who cannot resist any sale or a buy-one-get-one free? Or maybe you are a sucker for anything that seems remotely practical, so you tend to rationalize spending as a result (if this is you, please avoid stores like Bed, Bath and Beyond because you would be able to justify buying every single item sold there). The more cognizant you are of your own behavior and tendencies, the easier it will be, again, to resist the temptation to spend unintentionally.

[Related: A Millennial’s Guide to Spending (And Saving)]

Finally, ask yourself if the extra spending even matters to your bottom line – because it may not. 

Financial author David Bach famously coined the “latte factor” in the 1990s to show how small expenses here and there — like a daily cup of coffee — can add up quickly over time. Stopping those spending habits and putting that money toward investments or savings, he argued, could significantly alter your long-term net worth.

Bach had a point; it’s not always the best strategy to emphasize the minor items of one's budget over other possible strategies, such as looking at major spending or areas such as investment allocation or earning power. Cash flow is a great starting point, but cutting one coffee here or there may not make a huge difference in the long run. Each person needs to make that assessment, looking at how much to focus on cash flow and budgeting vs. other areas, based on their specific circumstances and financial situation.

As for me, I am much happier now that the weekly Starbucks habit has been kicked (even though in my case the budget could handle the additional $15 dollars I was dropping each week). In the end, mine was less a budget decision than it was a values decision — I simply didn't want to spend that much on something that wasn't that important to me, and wanted to nip that habit in the bud before it became an issue.

And as much as I admire Starbucks’ ability to market and sell, this consumer has happily chosen to take her "bucks" and spend them elsewhere

--

Jennifer Faherty is a Certified Career and Executive Coach specializing in helping women define success on their own terms, make the best career decisions for themselves, and find work they love. For more information, and for help saving and getting your personal finances in order in 2017, inquire about services at jennifer@financialwealthbeing.com or sign up for our updates at www.financialwealthbeing.com.