Is That Coffee Killing Your Savings? Yes It Is.

A cup of milk is being poured into a cup of milk, with the caption asking whether is coffee killing your savings?

Written by Kartik Goyal, edited by Jackie Tan. This article is a part of a special series by fundMyLife content marketing interns from

Coffee killing your savings? No way.

Have you ever woken up to an empty wallet and a depreciating bank balance, in the middle of the month, wondering where all that money went? The culprit might be that seemingly harmless cup of coffee. While research suggests that too much coffee can kill your heart, too much of coffee will kill your wallet as well.

According to a recent study published by Euromonitor, café hopping culture has been fueled by the rapid increase in the number of indie cafés in Singapore and by the change in perception of students and working adults, who see an SGD 6 coffee as reasonable. Elison Lim, Assistant Professor at the Nanyang Business School, attributes this trend to the onset of social media phenomenon such as “Instagrammable” food, hashtags, and the conversion of coffee from a stimulant to an obsession.

The Cost of Coffee

However, it is highly unlikely for someone to imagine the impact of this little item on the wallet. Data gathered from multiple sources indicates that coffee and milk form the most expensive ingredients of a coffee and yet it costs a fraction of what you pay for it in a store. On average, a cup of cappuccino costs SGD 5 to SGD 8 in a café. Whereas, it costs around SGD 1.76 to make one at home.

The graphs and calculations below might shed light on how much you might be spending.

A table showing the breakdown of how much one spends when making a cup of cappuccino at home
Here’s how much you spend when you make a cup of cappuccino at home.

What happens if we express the components in a pie chart?

A pie chart that breaks down the percentage of things in a cup of coffee
That’s right. We made this into a pie chart of components in a cup of cappuccino to go with the coffee.

Why is coffee priced so exorbitantly in a cafe?

Interestingly, the real value added by cafes is not in the coffee itself, but in the ambience, presentation and experience they provide. Employees, electricity, water, plush furniture and luxurious interiors cost money, not to mention the profit margins of the business owner, which add significantly to the price. It is no surprise that businesses claim they aren’t in the coffee business but rather in the experience business.

How much do you save from DIY coffee?

If you’re up for just the coffee alone, it makes more sense to DIY. Replacing a single cup of coffee, every week, with a cheaper alternative can reduce your expenditure by up to SGD 220 in the course of a year. Anyone willing to substitute their lunch coffee can save close to SGD 1500 in a year.

Once again we did some maths to see how much you can save based on your drinking frequency.

A table showing the amount of money saved if one switches to DIY coffee.
Your addiction could cost you more than you think. Conversely, managing that addiction properly can leave you not just happy and productive, but not broke as well.

To put into perspective, even if you drink coffee once a day, you’d be saving more than SGD1,500 per year if you DIY it.

Sweet ass graph showing some sweet savings when you switch DIY
A graph illustrating the difference in amount saved over 5 years when an alternative is chosen

Astonishingly, the figures become even more pronounced once we take into account the impact these expenses have in the long term. Replacing just one coffee a day, with a cheaper alternative can, potentially, save you around SGD 7,700 over the course of five years. While, it’s certainly difficult to avoid every coffee date, being mindful of the impact of small expenses on your budget can have a huge impact on your spending and saving habits. After all, the devil is in the details.

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