A Money Coach in Canada

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I’ve long felt awkward about this whole latte thing.  It’s the quintessential metaphor for foolish spending of money.  You know, as in, a latte a day costs enough over a year that you could go to Europe with the same amount, or better yet, put it into your RRSP.

Well, I’ve always had a weakness for lattes.  And since moving to Yellowknife, I buy a latte every morning.

I spend $3.14 per latte = $722 per year (I reduced it by 6 weeks to account for 4 weeks holiday – perk of working up here – plus 2 weeks of days when I get freebies for giving them all that business)

If instead I invested the money, and it compounded at 8%, in 5 years it would be worth $1060.85

(If anybody cares to calculate how much I’d have in 5 years if I eliminated that cost for each of the 5 years, I’d be interested in the results.)

But as I used to say to my clients, there’s no law in the universe that says you can’t buy lattes all you want, as long as doing so doesn’t kaibosh your other priorities.

For me, lattes aren’t so much about the caffeine and frothy milk.  More, it’s about

  • a little mental and physical break from my work environment
  • taking along a coworker and having that kind of informal chat that leads to good working relationships
  • And to a certain extent, it’s even about the friendly interchange with the baristas.

Over the course of the year, I’m willing to pay that $700+ in order to have this as part of the fabric of my life.

Readers:  I’m curious.  How much do you spend on lattes/coffees each month?  Do you feel OK about it?

photo credit:  Robyn Gallagher

About the Author

Imagine if Canadians were known for being all over their money. Engaged. Proactive. Getting out of debt. Savvy. Saving. Generous. Nancy wants to help. Nancy started her own journey with money over 15 years ago, and formed her company “Your Money by Design” in 2004 to help others along the same path. It’s not the usual financial advising/investment stuff. It’s about taking control of day-to-day finances –managing monthly cashflow effectively, spending appropriately, getting out of debt, saving. If you're ready to take control over your finances, pop by her business site, YourMoneybyDesign.com


  1. I’d have to say about $10.00 per month as I only drink tea at Tim Hortons every once in a while. However, I do spend $ on lunches which has to stop. Once in a while I will have a skinny chai latte from Second Cup. YUMMY! That is about $4.00 a pop!


    Mar 23, 2009
  2. Grrr… I don’t have a lot of experience doing financial calculations, but I had to figure this out when you asked for it to be calculated.

    If you’re buying $722 of lattes per year, this averages to $1.98 per day (722/365.25). Assume 8% interest, compounded daily.

    Let r = (1 + 0.08 / 365.25) // daily interest rate

    Looking at this as a summation, it’s:
    ∑ from i=1 to 5*365.25 (1.98 (r)^i)
    = 1.98 (r^(5*365.25+1) – 1) / (r – 1)

    This is quite a bit less than 5 * $1,060.45 because the $1,060.45 assumes you save the ENTIRE $722 on the first day of the five year period, then let it compound for 5 years (when in reality each of the daily cups of coffee would be compounding for a different length of time, the first cup you didn’t buy WOULD compound for 5 years, whereas the LAST cup you would have bought in the first year would only compound for 4 years).

    I was talking with another relative and my dad one time and we got talking about how much daily coffees add up to. My father, who is VERY frugal and one of his only indulgences is a daily coffee finally got frustrated and said “you’ve got to have SOME fun!”. He’s absolutely right, and by having a daily coffee instead of exotic vacations or sports cars he’s saving a ton of money.

    I spend $5-10 / month on coffee (there’s free coffee and tea in the grad lounge, so I get it there).


    Mar 23, 2009
  3. Kristi

    Don’t know – don’t care.

    I can afford it, I work hard, I save, I contribute to many charities, and I enjoy spending the money I make.

    No angst. No guilt.

    I’m with you, and Mr. Cheap.


    Mar 23, 2009
  4. You can get good quality lattes in Yellowknife?

    I am now ready to pack my bags and move up there…..
    Nancy, Find Me A Job!

    laura’s last blog post..I Need A Hand Up…


    Mar 23, 2009
  5. Oh my I am laughing- at your post title, AND at Mr Cheap correcting the math.
    I love lattes. I just have too much debt to afford them daily 🙂 Maybe one day!
    Oh yeah and I have a bit of an addiction to Timmy Ho’s which saves a bit a money. Roll up the rim!

    Wooly Woman’s last blog post..Shhhhhhhh, the baby is sleeping!


    Mar 23, 2009
  6. brad

    A bit of latte trivia: Many people seem to think “latte” is a French word, but it’s Italian and according to my Italian friends the “a” is pronounced like the a in “ladder,” rather than the “lah-tay” that you usually hear in coffee shops. No matter how you say it, it’s yummy. I like iced lattes in summer.


    Mar 24, 2009
  7. nancy (aka money coach)

    @Mr. Cheap You, sir, …. well, I bow to you. After reading your calculation I realized I forgot to calculate that the $722 over 5 years doesn’t all start on day one (I only took 1 st yr math at university; clearly not enough!) Thanks a kabillion for the calculation!
    @Rhona Chai’s are a very.close.second. And I *love* the whole Roll Up the Rim campaign. Now that I know how tiring March winter is (since I live up here), the sheer cheeriness of the campaign is much more noticeable.
    @Kristi High virtual five!
    @Laura – watch for Tuesday’s post. Loads of work up here. Come on up! (buy a fur coat first. I’m a green party person and I still bought one – but it was made in the 60s so no recent animals died)
    @WoolyWoman – I know! I love the whole Tim Ho’s thing in March. Much needed sense of fun and coffee all rolled into one, at the time Canada needs it most.
    @brad – thanks for the trivia – I had no idea, and will change my pronunciation (and feel smug about it, he he)


    Mar 24, 2009
  8. We each spend money in ways that look wacky to others but make perfect sense to us. We compensate by spending less in areas that look wacky to us.

    There’s an interesting book called Treasure Hunt by Michael Silverstein. Blog post: http://bit.ly/wacky

    Riscario Insider’s last blog post..How Referrals Lead You Astray: The Big Lesson from a Wet Basement


    Mar 24, 2009
  9. liz Reed

    I “have” to have a chai latte most days but now I get the concentrate in a carton and make it myself, my “coffee’ costs are really low. I think $5 a week usuallyall I spend at starbucks. I count the concentrate Chai as essential groceries and it works out to $1 a day if you don’t count the milk. I also save gas costs by making it at home but I miss the ambiance. Glad you have found a place in Yellowknife. Is the chai as good at that place in Gastown? Or is it more like Starbucks?


    Mar 24, 2009
  10. I’ve never had a latte in my life. I spend about $10 every… three or four months on a jar of instant coffee. My personal luxury is Lush cosmetics which I buy about once a year.

    I’m thinking I should open a coffee shop – sounds like easy money. 🙂


    Mar 26, 2009
  11. I think life would be terrifically boring if we didn’t feel free to occasionally indulge in whatever it is that brings us a little bit of joy.

    For the longest time, my mother would razz me because I insisted on buying bicycles that cost thousands of dollars. In her mind, the $99 special at the Wal-Mart looked just like my uber-machine, and I was being frivolous in paying so much for something seemingly so simple.

    Yet considering how much I ride (lots), where I go (far), and how critical this activity is to my general sense of peace (incredibly), it’s worth every last penny. My next bike will cost even more. Because I’m worth it.

    As are you.

    Carmi’s last blog post..Crates Etc.


    Mar 27, 2009
  12. Oops, where are my manners?
    1 – So nice to e-meet you!
    2 – I owe Tanya a thank you for pointing me in your direction.

    Carmi’s last blog post..Crates Etc.


    Mar 27, 2009
  13. Nice post. I agree with Carmi..
    A little indulgence is no fun if we do math every time. Very often, close your eyes and just do what we like. But now and then (like once in a century) stop and make sure we aren’t going too far!!
    Tanya sent me here.

    Jean’s last blog post..Memoirs 10 – The Insignifance of a Smile


    May 30, 2009

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