In recent months, the cost of daily luxuries has increased significantly, leading to a shift in personal finance habits. The rise in coffee prices is not just due to the economics of the coffee itself but also the rising cost of living and corporate greed. The same generation that has been scolded to stop buying coffee is the same one that has faced the Great Recession, student loan debt, the COVID-19 pandemic, the further degradation of the pension system, and decades-high inflation.
The increased cost of these daily luxuries is not helping budgets stretched thin by the rising cost-of-living writ large. When financial push comes to shove, discretionary spending is easier to trim than housing costs or student loan bills. It doesn’t have to be a cup of coffee; it can be a stand-in for whatever your variety of daily treat is, whether that’s buying lunch at work, occasional splurges on premium-brand clothing, or a run to Starbucks. Most of those costs have creeped higher and higher over the past few years due to persistent inflation.
As it gets harder to budget for life’s small pleasures, Americans have to make tougher choices on how they spend their dollars. Making small changes to habits can also “reap huge returns,” says Andrew Latham, CFP and director of content at SuperMoney.com. Mindful spending, taking advantage of deals, and prioritizing experiences can make these luxuries more sustainable without compromising on enjoyment.
One way to make enjoying the little things more sustainable is to limit them rather than cutting them out completely. In the case of the takeaway coffee, that could be to one day a week, or when you run a certain errand or go into the office. Another option is to find less expensive alternatives, such as upgrading your home brew station or taking a walk instead.
Ultimately, the goal is to do what will bring the most value, both literally and metaphorically.
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