Monday, July 04, 2011

Saving money: #1 Drinking Lattes

One common piece of personal financial advice is to stop drinking lattes. If every day you're paying $4 for a latte, over the course of a year you've forked out more than $1,400. Does that make you wake up a bit?

Maybe you're still slumbering. Maybe you could think about the cost of your own coffee machine. Here's a nice Gaggia, it's only $400.

Then again, you probably aren't a well-trained, competent barista. If you are, why are you paying for your coffee? If you're not, that Gaggia might be good only for making you disgusting coffee that you can't drink.

Well, you could buy a Nespresso and automate the process. Or we could get into an argument about whether a George Clooney endorsed plastic box makes acceptable coffee or java-flavoured bacterial broth. Or you could get sniffy and complain that Starbucks' staff aren't 'proper' baristas and the coffee isn't any good.1

The thing is, it's unlikely you can carry around an espresso machine in your back pocket without a lot of convenience. And while there must be an awful lot of margin in selling 7 fluid ounces of hot milk and a shot of espresso, if that's the price Starbucks are charging, that's what you'll end up paying.

Or not paying, if you abjure milky espresso-based drinks forever.

One contrarian view is that it's silly to think about saving money on lattes. You should just earn more, so that the cost of those lattes is negligible compared to your enormous income, and carry on drinking them. In fact, earn so much that the cognitive debt that would be incurred by having to think about whether you have a latte or not would be more than the cost of the latte.

Well, since each of us can easily ramp up our income just like that, the problem's solved.

Until you read Peter Singer, and realise that there are a wide variety of different goods you could support, from buying lattes to giving money to orphans to rescuing captive orangutans from misery. So maybe you shouldn't buy that coffee after all, you should buy a goat for somebody you don't know.

And then we can ramp up that feeling of guilt and concern, so that you should dispose of all your disposable income2 to charitable causes, and stop drinking coffee entirely.

Which might be enough to drive you to drink.

Scaling up income to make costs negligible isn't workable because we can always generate new costs.

Since this vexed me for some time, and because I was spending vast amounts of money in Starbucks, further pondering whether that last latte had made me better at pontificating about whether I should have a latte or not, I tried a simple experiment. I stopped drinking lattes for a week.

The week after that, when I woke up and wondered how many people had seen me asleep at my desk, I realised they weren't something I'd derived much enjoyment from. They'd just been a habit. So I didn't start drinking them again.

Now, some people will want to drink lattes. But if you don't test whether you really like them or not, saying "stop drinking lattes" or "don't stop drinking lattes" isn't helpful. You'd be much better off reading Socrates, and then when you realise the life unexamined is the life not worth living, then you can make proper decisions about whether you should be frequenting Starbucks or not.

1 In which case, go and read about the 'No True Scotsman' fallacy and don't come back.
2 Perhaps those coffees don't come from your disposable income? Maybe you should construe them as an operating expense, because you can't function without them. Perhaps you might also consider that you're just a bit too attached to that coffee...


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