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 )

I do the same. But I don't have any debt. I bought a really good coffee machine during lockdown and it's saved me a fortune. I now only buy coffee if I'm sitting in a coffee shop. The rest I make my self.

@Whingasaurus

Take care of the pennies and the pounds take care of themselves.

Wisest words.

I truly believe in the take care of the pennies and the pounds will take care of themselves.
I didn't even realise I was spending over £200 on coffee until my dh pointed it out years ago. I stopped bought a coffee machine and started using a reusable cup and taking my morning coffee on the train. Much cheaper but still had coffee. I also worked for a company which had a machine so used their one when at work if I wanted another one.
Paying your debt down will free you up for other things way better than coffee to be spending your money on! I'd go for the paying it off option personally.

I do love a nice latte. But they aren't worth 3 pounds. I invested in a Tassimo machine. It's about 3-3.50 for 6 lattes.

I used to have a massive takeaway issue too. Stick to once a week only and search for easy recipes. The problem with me is I knew how to cook I just felt it took too long in an evening. So we bought a dishwasher and I improved my short cooking time recipes

If you work in the sort of place where it would be allowed, buy a bean to cup machine. With the amount of coffee you drink you would recoup the initial outlay pretty quickly. The coffee is great quality and you don't get tempted to add on a pastry or chocolate bar. I love my machine at home so much that I'm thinking of buying one for the office (but as I'm now permanently wfh for most of the week, it doesn't make financial sense).

You might find you make friends in the corporate world with your amazing coffee machine

I heard recently that most of the coffee you buy in coffee shops has mould and made with poor quality beans. There was a lab that tested and found most coffee shop beans were full of mycotoxins from mould. I think you should buy your own machine.

If you have loans as well, it's not really instead of debt is it?

Anyway the answer to how do you tell if you have lifestyle creep - you need a budget. Honestly changed my life in terms of our finances.

ynab.com/referral/?ref=soiKTevMASnp4xke

(You can just google YNAB if you don't want to follow a referral link).

Our industry has had a big switch of late and I've noticed social climber/keeping up types have moved into less take out food and drinks and more bringing their own in an effort to model environmental sustainability and their specially engineered coffee blends and machines! Is that an option? You may just be ahead of the next curve in your industry!

If your office doesn’t have coffee, quite a few people where I work bring their own cafetière or aeropress for at the office. We actually do have free instant coffee so that’s just the connoisseurs 🤣

You spend your money on what you like but I always thought of it like this..

£3k a year over a working life is £120k. That's 2-4 years (ish) of retiring early if you saved it in a pension instead.

How grateful will 57 year old you be to be able to give up work then, if you want to, rather than hang on for 60?

@BackwardsPrawn

You spend your money on what you like but I always thought of it like this..

£3k a year over a working life is £120k. That's 2-4 years (ish) of retiring early if you saved it in a pension instead.

How grateful will 57 year old you be to be able to give up work then, if you want to, rather than hang on for 60?

This is a great point.

I don't drink coffee but dh does. We have a home coffee machine. Much cheaper. I'm always a bit horrified at how much a cup of tea/ hot choc is in a cafe though.

I think your attitude to socialising/networking to help your career could be right but you need to look with clear eyes at the people who do the jobs you want and be taking them for coffee!
They may have also been part of the "in-crowd" and helped by friendships and networking into their current positions, but equally if your in your 20s-30s and a large percentage of your work social group are from the "right" backgrounds a lot of them will have left by the time your looking for the really big promotions and need support from senior execs.
A way to keep the socialising while improving your financial and physical health might be to join the gym closest to your office, attend classes at lunch (more senior mgrs will be using lunch to work out and no harm if they see you as on the same wavelength) and switch to mainly water/turmeric tea on your coffee shop runs.

I worked in the City years ago. People spend way more than £250 a month in the pub, it's really not that much.

It's a lot of coffee though, you could intersperse with tea or a caffeine free drink.

@KleineDracheKokosnuss

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 think this is very good advice. Look at networking opportunities which are impactful. Dont end up being the woman who attends everything. Work out which is the important event and go to that.

It could be Monday morning coffee or drinks after a particular meeting.

Look at who else is going. Work out who your peer group is and also which is the next stage peer group. Put more effort in on the events which are attended by the next stage peer group.

Beware of trying to keep up with the Joneses. Be sure of who you are trying to keep up with as other people will have different household incomes from yours.

When I moved in with DH I also moved in with his hideously expensive Rancilio Silvia. This caused a bit of friction at first as he owned it to save money on going out. We both massively love coffee, but it's not just the coffee for me - it's being in the "third space" and having somewhere I like to work. It's ended up as a bit of a compromise because even replacing 1/3 to 2/3 of a daily Americano with coffee at home saves a lot of money, and if it's actually about the coffee, if you buy decent beans and grind at home it's often much better than UK coffee shops imo. If it's more about treats and impulsivity then I entirely sympathise, I have that with takeout food, and the only way I've fixed it is to move to a country where I can eat basically none of the restaurant food (vegan.)

Not on board with the people who say don't spend it on coffee when you could spend it on fun, though. Coffee is fun!

(An Aeropress is a good solution for making decent coffee at work, especially if you grind the beans at home and bring them with you, then it's very fresh and feels like a treat even without any extra calories.)

Two of DH good mates from University work in the city. One offered DH a job. The guy was earning 150k pa not inc bonus and this was 20 years ago. I’m pleased to say DH remained in the job that was right for him though not as well paid as that, we both worked in academia. DH mate remains flashy I do get where you are coming from regarding the keeping up with the rest comments. Before we had children we used to go out with these friends sometimes. The money spent back then was insane but we only went occasionally His mate had a socialising budget of 2k per month.

@BackwardsPrawn

You spend your money on what you like but I always thought of it like this..

£3k a year over a working life is £120k. That's 2-4 years (ish) of retiring early if you saved it in a pension instead.

How grateful will 57 year old you be to be able to give up work then, if you want to, rather than hang on for 60?

Or by networking and meeting the right people OP vastly inflates her salary in the next 10 years and can retire at 45.

@fruitbrewhaha

I worked in the City years ago. People spend way more than £250 a month in the pub, it's really not that much.

It's a lot of coffee though, you could intersperse with tea or a caffeine free drink.

This is not a good thing.

It comes at an expense.

Be mindful that once you settle down its no longer sustainable or you are sacrificimg more than your own future and money.

As others have said, in the end it's about what's important to you, but my jaw dropped a bit when I read your numbers and the reason you feel you need to spend the way you do.
Cutting back (not giving up) on coffee and take-aways should be the easy bit, it worries me more that you feel your career might suffer if you don't go on hugely expensive spa trips and skiing holidays with the "in crowd". How many years does this keeping up with the Joneses last for? At the end of it you may find yourself struggling financially and there is no guarantee of career success.
I'm not suggesting you go all hair shirt - like crash diets, that is likely to fail, but you really should prioritise paying down your debt and deciding if you want to save for a house or other investments for the future. It's really good that you are starting to question the value of your spending, but I think coffee is the symptom and not the main issue.

This really resonates with me - wise advice on this thread. Plus I’m glad I’m not the only one who has had that moment of realising just how much money I’ve frittered away in bloody Costa!

That is a lot of coffee. I used to bring a cafetiere into the office, but I think you're drinking coffee to socialise, not because you want one, so that might not work for you.

I think go along for the social bit, but maybe get a glass of water and say you're cutting back on your caffeine intake.

In general though I don't think your idea about networking is stupid. I'm not a great networker, but it isn't important in my line of work. If you need to in yours a budget towards it is a good idea. Put it towards the ski holidays that you say will solidify your relationships. I'm not saying take it up, but smoking helped me build a good relationship with one of the partners where I trained! And my manager. I've quit now though and it certainly is not a good way to go to save money (along with a host of other things!)

@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?

It ends when the cost benefit analysis shows a greater cost than benefit. I wouldn't spend that much on coffee because I don't like take away coffee enough to feel its worth it, but always buy lunch, which other people think is wasteful, but is worth it to me. I don't think its a question of some types of non essential spending being more valid than others, its more about making sure your spending is mindful. Thinking it through and deciding you love coffee and need to buy it to network, is a different matter from buying it thoughtlessly, out of habit, when you don't really appreciate it or care that much one way or another.