To spend 5% of my take-home income on coffee instead of debt...

[zabindya]

...if that amount comes to £250 a month, or £3,000 a year?

I'm not sure which is the more honest way to look at it. Just did my accounts and got a shock at how much I'm spending. I always thought "stop buying lattes so you can afford a house!!" was an out-of-touch boomer thing to say, but now I'm wondering if they were right...!

My income has increased massively over the last couple years, after a lot of investment on my part including significant student debt and private loans. On one hand 5% seems small, on the other hand £3k seems very meaningful! (And I probably spend a similar amount again on delivery/takeaway...) I'm struggling to adjust to how to think about these big numbers compared to what I'm used to. Any suggestions? (Bracing myself for responses )

Do you really need the coffees and ski trips etc etc to network or are you just telling yourself that?

I bet if you look around you there will be plenty of people.who succeed without doing those things. I know because I have worked in the kinds of industry where it is easy to justify to yourself that you "need" expensive clothes, extravagant lifestyles etc to network and succeed. But actually when you look at who has done well, that really wasn't the case.

:11Nikkiten

3k isn’t a house deposit though is it. You’d need to not buy coffee out for over 8 years to save for the average deposit. I don’t disagree that 3k on coffee is a waste but you aren’t buying a house with that saving.

Saving for 8 years for a house deposit isn't bad though is it. And if she cut down her take away spend it would be even less.

Pret subscription is surely your friend here?

I just had a thought. Tell me if this is a bizarre way to look at things.

There is a certain amount of "keeping up with the Joneses" which is actually useful in my corporate world. I have seen first hand in the last year or two how much of an advantage it is to be "in". Not just a networking contact but a friend, one of us, "our sort of people". (This sounds horridly social-climby but I'm just stating what I see.) I don't want to give this up for the sake of saving a few hundred quid in interest. My career opportunity came from this kind of connection.

So I don't want to give it up. But equally coffee is a very stupid expense. I'd be happy to spend £5k on a "keeping up with the Joneses" budget line item, but £5k buys a lot of spa days and ski holidays which are even better for deepening friendships. So my idea is, allocate the £5k for this, rather than more debt payments, but force myself to be thoughtful about whether the investment is actually an investment vs a habit?

Oh my god, just writing this makes me sound awful...

Totally makes sense @zabindya . I doubt other people will notice you not drinking the coffees , or if they do say you're doing it for a health kick rather than the money. It's natural to want to fit into the milieu you're in, so the trick is how best to do that whilst not spending a fortune or compromising your own principles.

Our DS was bemoaning the fact we hadn't gone skiing to Courcheval for Feb half term ( went somewhere cheaper where we have friends). Then his pals were sending him pictures of the 80 euros steak they had for lunch and I realised that even if we could have afforded that holiday, the spending costs to keep up would have used up the holiday budget for the rest of the year.

Your career progression depends on a costa coffee? FFS. Buy yourself a silver train travel mug and tell them you are trying to be more eco / green. I can't believe I'm reading this shit.

A total spend of 6k per year in takeaway coffee and food is fair enough if you can afford it.
If it is getting in the way of something which is more important to you, like saving for a house or a fantastic holiday every year, then look to reprioritise.
' I've switched to peppermint tea ( waving contigo mug) but I'll walk with you as I could do with stretching my legs' is still using the network opportunity without spending the money.

When I first read the OP I was like holy moly what are you thinking!

But then I started thinking of the horse I pay about 30% of my salary on a month and never ride him because I’m a bit scared and quite lazy.
I bet you enjoy your coffee more than I enjoy my horse

Also this thread reminds me of Rachel smoking on friends

"5k a year would help me pay it a couple months faster"

How much debt do you have that £5k would only repay it a couple of months earlier?!

If that's not a mistype you need to reappraise your spending. I know loads of people working in the city who are earning loads of money but spend a fortune servicing that lifestyle ... it's a hamster wheel

Restrict your bought coffees to times you are meeting / networking. Don’t buy them just for you to have at your desk.

And how do takeaways / food deliveries assist your career? If you haven’t time to quickly cook something get a good ready meal. I never understand people sending for (mostly foul, using some horrible cheap cheese etc) pizzas when all the supermarkets do good ones for under £5, 12 mins in the oven.

You are being paid a lot of ££ to manage other people’s affairs, I am sure you can sensibly appraise your own use of money.

@NumberTheory

You're unlikely to be able to buy a house saving 3k a year. But if you're spending 5% of your take home on coffee, you probably have a lot more discretionary spending you could also cut and that could make a difference.

On a take home salary of over 60k, you are the sort of person the "stop buying lattes and avocado toast" advice could actually work for.

Doesn't make you unreasonable to choose lattes instead unless you spend any of your time moaning about not being able to afford a house.

Seriously! £3k a year in 5 yrs thats £15k or in 10yrs thats £30k.

it took me 10yrs to save up for my house and i was renting so just by saving that money alone would give OP a decent amount and no doubt there will be other savings they could make to save up quicker.

That's crazy money. That's 5 pairs of Jimmy Choos a year. Or a cruise. Or a 1 carat diamond ring after 3 years. Talk about pissing your money up the wall!

Depends on what you call pissing money up the wall. I'd say 5 pairs of Jimmy Choos is a waste of money but I've never been fussed about fashion brand shoes.

The issue is less what the OP spends the money on and more can she afford it and is it genuinely a networking investment or just socialising.

@fairylightsandwaxmelts

But working in the City there are so many things you need to do to keep up. Brunches, drinks, coffees... I don't want to turn down the chance to network because of a £3 latte, which would have seemed ridiculously expensive to me before.

Really? Is every single coffee you buy a "networking opportunity"?

Or are you just telling yourself that to try and justify why you don't need to cut back?

I work in the city. Have done for over ten years. I’ve averaged one ‘coffee’ (that I pay for) a month. That’s it.

Internal networking can be done in the office with the coffee supplied by the employer. External should often be expensable (if it’s real networking).

Be honest - you just really like coffee, yes? 🤪

It sounds like you move in very different circles to most people, and opportunities could genuinely present themselves to the people 'in the right place at the right time'.

You could reduce the expense without not going by getting something like a green tea or bottle of water a lot of the times you go. Frame it as a health kick?

Plus try to duck out of some occasions? Because if you're 'in the frame' and you're already seeing these people several times a week, you're unlikely to miss out because you're not there all the time?

But definitely swap to spa days/ski holidays or mix it up if they're more worth it to you from an enjoyment point of view. After all, you can make a nicer coffee at home/in the office for far less than a coffee shop, likewise you can eat cheaper alternatives to takeaway/delivery/coffee shop food.

But you can't recreate a ski holiday at home, nor more than the most basic of spa experiences. Plus it would be weird to invite a business contact to come and sit in the bath with you at home, unless you're also in a relationship, but it would be perfectly normal to sit in a spa hot tub together.

And I agree with the comment about deciding whether you want to trap yourself into this lifestyle for the long term. It's usually very 'live to work', all your time and social life is at work, often leaving little time for downtime or outside work friendships.

Oh my god, just writing this makes me sound awful...

Some industries are like that. Its not great but its how some sectors work. I agree with PP upthread that focusing on your next promo/job makes sense if that will enable you to pay off loans faster.

Set a budget for networking, decide what networking activities to go for, keep a record of the return on that spend and review it quarterly.

Ouch. So £6000 a year on stuff that doesn't hugely impact your life or happiness.
Is it worth it to you? The opportunity to network for a latte- do it, but make cutbacks where you can.
£6k a year isn't likely to be the difference between you owning a house or not, but could well be the difference between a house and a slightly nicer house. After all, it's the equivalent of a car on finance each month. Lower end just taking into account the coffee, higher end taking into account coffee and the takeaways.

I know what I'd prefer!

@zabindya

Haha, obviously I definitely should spend less on coffee. Actually the reason I checked in the first place was that I realised how many daily shots of coffee I was having and had a heart attack about that, so I think my immediate solution will be to just cut back on coffee overall!

If I'm looking for advice, maybe it's something along the lines of how do you know when lifestyle inflation is properly becoming a problem?

I have a 2-year plan to pay off my loans which so far I'm on track to do (using the other 95% of my salary). 5k a year would help me pay it a couple months faster. But working in the City there are so many things you need to do to keep up. Brunches, drinks, coffees... I don't want to turn down the chance to network because of a £3 latte, which would have seemed ridiculously expensive to me before. But equally the same logic applies to spending £3k on a ski trip with the same people, so where does it end?

I mean everyone has to manage this dilemma, it's not just "living in the city". Everyone has social and other stuff that they use their disposable income for, which life would potentially be less rich without.

It honestly doesn't matter to anyone on this thread other than you what the actual numbers are.

Someone can judge you as being wasteful, but they might have a lower income than you, or then might prioritise different things.

At the end of the day you have to work out what's important to you and that's probably a balance of spending money now and investing it for the future/ paying off your loans. (Are you talking about a student loan? If so there is not really much need to worry about paying it off quickly. If you have other loans then obviously prioritise them!)

I saw lots of people kidding themselves that they had to spend lots of money to have the right friends and be "in". It isn't borne out by who was actually successful though.

There is a certain amount of "keeping up with the Joneses" which is actually useful in my corporate world

So fake it. Just like on Instagram. Be judicious in what you actually attend and pay for - only stuff that’s really worth it.

I’ve known a lot of people who spent their time ‘keeping up’. Ten years later they still rent, have massive mortgages or spend their time moaning about how it’s too expensive to have kids and they’re drowning in debt.

I was shocked to discover I spent £700 on socialising last month, but the reason I am able to do that and don't regret a moment ofnitnisnthat I have no debt. I wouldn't have done it if I did.

For my £700 I had really had a lot of fun, to spend more than a third of that on coffee seems ridiculous to me.

@DetailMouse

I was shocked to discover I spent £700 on socialising last month, but the reason I am able to do that and don't regret a moment ofnitnisnthat I have no debt. I wouldn't have done it if I did.

For my £700 I had really had a lot of fun, to spend more than a third of that on coffee seems ridiculous to me.

I'd be funnelling that money into paying off any loans first then putting it into savings.

You may not realise it now but your future self will thank you. Many of us were in high paying jobs in our 20s and 30s but life doesn't always turn out as you expect. Things change. It is wisest to live within your means.

£250 on coffee per month is a lot IF you can’t make your debt repayments, have a car on finance, eat out often, pay for Sky tv, have big housing costs, join an expensive gym, have lots of subscriptions every month.

£250 a month on coffee isn’t a lot if it’s your only splurge.