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My Financial Habit: Coffee Shops and Lattes

Purpose of this article: to show how my afternoon latte habit adds up and give you some thoughts on things to consider if you have a similar financial habit in your life

Overview

I have a financial confession to make… I love afternoon lattes and it’s costing me dearly! And like many of you out there, I know every single time I buy my latte, I am overpaying severely. According to USA Today’s coffee calculator, the markup on my latte can be as high as 300% depending on the coffee shop. But I will not deny that there is something quite special about a hot off the press latte!

How Much Is My Latte Habit Costing Me?

Based on an analysis of my spending over the last 535 days here are my financial stats:

• I have visited my local Charlotte coffee shops 71 different times, and have spent a total of $643 on afternoon lattes. The cost per trip is $9.04 (my goodness!)

• My average monthly spend over the last 18 months is $35.67

• The most I spent in one month was $81.23 in November 2017

• Over this time period, I spent roughly $1.20 a day on my latte habit.

At a 300% markup, my afternoon latte habit should have only costed $215 if I was disciplined enough to brew my own coffee. This is a difference of $428 extra that I have spent over the last 18 months.

What Could I have Done with the $428?

So, what could I have down with this additional $428? Here are a few things I could have done with that money…

• During the time period of 3/1/17 to 8/18/18 the S&P 500 returned an approximate +19.6%. Had I invested my $428 during this time period, I could be roughly $84 richer.

• Based on the Bureau of Transportation, I could have taken a round trip ticket to almost any US city. The average round trip price during the first three months of 2018 was $346.49.

• I could have used that money to pad my emergency savings account. Recent studies show that very few of us Americans have enough savings to cover a $1,000 emergency.

There are countless other more positive money management actions I could have pursued instead of spending this extra money on my afternoon latte habit. The point I am trying to make here isn’t to pass judgement on this money spending habits. It’s to make myself more aware of an area of spending that may not truly be worth it in the long run.

If you are like me, you probably have some areas of money management that you wish you were better at. I hope my financial habit confession was helpful for you to hear. Please let us know what financial habits you have and wish to break.

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Open an Ally Online Savings Account NOW

Purpose of this article: to explain why you should open an Online Savings Account with Ally Bank today

UPDATE (12/20/19): the current annual percentage yield (APY) for the online savings account with Ally as of December 2019 is 1.60%.

UPDATE (6/20/19): the current annual percentage yield (APY) for the online savings account with Ally as of June 2019 is 2.20%.

Bullet Point Summary

  • Ally continues to be one of the few financial institutions that consistently gives returns back to its customers.
  • The APY that Ally offers for its online savings account is one of the best out there.
  • The Online Savings Account is easy to use, with no maintenance fees, and very few restrictions.
  • Your deposits are insured by the FDIC up to the maximum allowed by law which is $250,000.
  • The only thing to watch out for is that you will owe taxes on the interest you receive within this account. Ally will send you a 1099-INT.

Overview

Ally Bank recently announced an increase to their annual percentage yield (APY) which is the interest rate they pay you on your savings deposits with them. Over the past 12 months, they have increased this rate from 1.0% to 1.80% and have one of the highest rates of all banks out there:

With no minimum deposit requirements, and a seamless online experience, everyone should maximize their savings by opening an account with Ally Bank today.

It’s Simple… Your Money Grows More with Ally Bank

Because Ally pays a higher interest rate than most banks, your money grows much faster with Ally. The following graph shows what $1,000 is worth in 30 years across a sample of different banks. Please note that inflation has not been considered and thus the 30-year returns have not been adjusted downwards for simplicities sake:

Before consideration of the impact of inflation, a $1,000 deposit with Ally Bank today would net you $1,708 in 30 years!

Compare to the average of the big banks (PNC, Wells Fargo, and Bank of America to name a few), Ally Bank is a NO BRAINER!!!

Features of the Online Savings Account

*Taken directly from the Ally Bank website. See link here:

• No monthly maintenance fees
• Earn a rate 20x higher than the national average
• Deposit checks remotely with Ally eCheck Deposit
• Grow your money faster with interest compounded daily
• Six transactions limit per statement cycle
• Your deposits are insured by the FDIC up to the maximum allowed by law which is $250,000
• Protect your legacy. Open this account for a Trust. Learn more

Closing

Very rarely are money management decisions this easy. When it comes to maximizing your savings, an Online Savings Account with Ally Bank is simplest and most effective way to go. My hope in writing this article is that after reading this, you will visit Ally Bank and open an Online Savings Account. Your future-self thanks you!

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The Inner Game of Tennis

Introduction

The Inner Game of Tennis by W. Timothy Gallwey is a book about more than just tennis. It’s the ultimate guide to gaining peak performance in the mental aspects of life itself, and this is a must-read book for anyone who is interested in gaining complete mental control over their self. For a deeper dive into this material, visit The Inner Game website.
Deep within our mind, we have two inner selves battling for control over our actions and thoughts. Self-1 is an egocentric and control-minded being that lives to tell and judge. Self-2 is a natural reactor and learner from experiences. It’s the ultimate doer by nature and can be seen as our subconscious mind. 
 
The relationship that exists between Self-1 and Self-2 is the primary factor in determining our ability to navigate the complexities of this world. Better tennis and life lie in improving the relationship between the conscious teller in Self-1 and the natural being of Self-2.

What’s the Real “Problem” with Self-1?

Generally speaking, the vast majority of us are constantly thinking or ruminating over the past and future, forgetting to live in the present moment. Self-1 overly influences and overwhelms the natural capabilities of Self-2 by exerting control over situations through self-judgement, over-thinking, and trying too hard. This constant thinking, assessing, and judging are the real problem with Self-1.
 
 

One Major Key to Overcoming Self-1 … Let Go of Self-Judgement

Judgement is the act of assigning a negative or positive value to an event, and are thus very much personal in nature. Our judgements start with our thinking process and can easily spiral out of control as our ego reacts to sights, sounds, feeling and thoughts within our experience. Letting go of judgements doesn’t men ignoring errors. It simply means learning to see events as they are and not adding anything to them (i.e. positive or negative values).

Concluding Thoughts…

The world is rapidly changing every single day and this change can feel at times unsettling. The Inner Game of Tennis offers indispensable tools that when put into practice, will give you the ability to remain calm in the midst of this rapid and unsettling change. The ultimate goal of winning the inner game is to overcome the telling nature of Self-1 to allow the Doer of Self-2 to dictate your actions.  
 

Extras…

 
Brian Nwokedi’s Book Review on Goodreads
Brian Nwokedi’s Twitter
Direct Link to Book: The Inner Game of Tennis
Author’s Website: THE INNER GAME
Author’s Twitter: @the_innergame
Video on Quieting Self-1