Will Avoiding Lattes Make me Rich?

Sunniva Kolostyak is back in the studio to ask what the consequences of saving your coffee money could be if you invest the proceeds

Sunniva Kolostyak 13 September, 2022 | 9:40AM
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Sunniva Kolostyak: Welcome to Morningstar's personal finance minutes. Today we're asking the question 'will avoiding lattes make me rich?'

Over the past few years in particular, younger people have been told they're spending too much money on luxuries like fancy coffees or avocados, impacting their financial futures. So, we've done the math to check just how much you could be saving by cutting down on your daily coffee fix.

If you're spending £3 a day on coffee, that's roughly £90 a month. If invested with an average return of 6% a year for 40 years, that would leave £178,252 for your future self.

That's a sizable amount, but it's probably not enough to get you on the property ladder in the short term. That said, if you cut down to one coffee a week, that will leave £78 to invest each month, which over the same period would grow to over £154,000. And you're not completely depriving yourself of shop-bought caffeine either. At the same time, you could argue that if someone is able to afford a daily or weekly coffee, they're probably already allocating a similar amount to their savings.

For Morningstar, I'm Sunniva Kolostyak.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Sunniva Kolostyak

Sunniva Kolostyak  is data journalist for Morningstar.co.uk

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