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It’s most commonly referred to as the Latte factor ^[3] – it’s that morning cup of coffee that many of us rely on to jump start our mornings. For many, that cup comes from a machine at home. For others, it calls for a stop by your local Dunkin’ Donuts or Starbucks (or wherever). Whether you brew at home or you buy it in a store can make a big difference financially and is the subject of this week’s Money Leaks.

This image, from Consumer Reports ^[4], says it all:

The prices listed are the average prices for 12 ounces of coffee. The difference between brewing Columbian coffee you buy at the store versus a cup of Starbucks is over a dollar (nothing I’ve ever purchased at Starbucks has been only $1.50, but that’s not the point!). A dollar over five days, fifty-two weeks a year, that’s $260 over the course of a year. If you need two cups to get through the day, that’s $520 a year.

Is it a leak if I really enjoy it? That depends… it’s only a leak if you don’t realize buying coffee from Starbucks each day is costing you a few hundred dollars a year. As long as you are aware of it, it’s not a leak. It’s your money, you are certainly entitled to spend it however you’d like, but the key is understanding how much you’re spending. If you have credit card debt, perhaps you could switch to brewing your own and putting a little more towards that debt.

I’m not going to tell you that you should brew your own coffee, long time readers know that it isn’t my style. I’ll tell you to start your emergency fund, because everyone needs one, but I won’t Suze Orman you and demand you spend your hard earned money a certain way. I will say that you should know where your money goes and be smart about how you spend it – that begins with knowledge like this.

Is the convenience of buying coffee, rather than brewing it, worth $260 a year? That’s up to you.

(Photo: vizzzual-dot-com ^[6])