Did My $50,000 Starbucks Habit Ruin My Retirement Plan?

WASHINGTON - JULY 2: Starbucks' new iced coffee and tea beverages are displayed during a promotion July 2, 2003 outside a Starbucks coffee shop at Dupont Circle in Washington, DC. Starbucks introduced a new line of iced tea, coffee and tea lemonade drinks to their customers to cool down in the summer. (Photo by Alex Wong/Getty Images) — (Image credit: Getty Images)

It all started 16 years and $50,000 ago. I needed an excuse to get my infant daughter to sleep and couldn’t admit complete failure by driving around aimlessly.

I strapped her into the car seat, hopped in the SUV, and hit the Starbucks drive-through. I'm a new mom — who doesn't need caffeine — and if she falls asleep ...

She was conked out by the time I had my drink in hand, and I spent the rest of her nap in the driveway, working in my car.

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That morning ritual quickly turned into morning plus afternoon nap/Starbucks runs, and before I knew it, I had two kids in high school and was still going to Starbucks twice a day.

It didn’t matter that Starbucks was 10 minutes away from my house, that sometimes the drive-through line would take 20 or more minutes, and that even when I switched to the mobile app, they would get my order wrong more times than I care to admit. Starbucks was part of life, my routine, whether it was a workday or a holiday.

Then it wasn’t.

One day, I'd had enough. The order was wrong, and I waited too long to have it corrected. I was left frustrated and angry, and couldn’t understand why. I had been going to the same Starbucks for 16 years, and no matter how they treated me, how many times they got it wrong, I kept coming back. I was mad, hurt, and so done.

I did what any respectable woman scorned does: I broke up with Starbucks and never looked back.

All this drama got me thinking about the tons of money I’ve spent through the years at Starbucks and if it would have been better to have invested that money in a tax-advantaged retirement account, such as a 401(k), where it could have grown and compounded.

The answer might surprise you, but first, let's look at the numbers.

How much did my Starbucks habit really cost?

Before we break down my Starbucks spending in this judgment-free zone, full disclosure: This is a conservative number.

This only covers my caffeine habit and doesn’t include cookies, cake pops or any other treats for the family that Starbucks sells.

My drink: Trenta Black Iced Tea, no Lemonade (they always got that wrong), two Equals.

Price per drink: $4.83

Total per day: $9.66

Per week: $67.62

Per month: $270.48

Per year: $3,245.76

16 years: $51,932.16

Rounding it to $50,000, and assuming the money was invested in the S&P 500 over those 16 years, at a conservative annual return of 6.5%, Samantha Grupe, a financial adviser at Prudential Financial, said I would today have $88,000, a $38,000 gain.

Wait, what?!?!

I was ready to learn that I would have been a millionaire if I hadn’t bought Starbucks twice a day. I wanted to scream to the heavens that the reason I didn’t have a zillion dollars in my 401(k) was because of Starbucks, but in reality, it was the reason I didn't have an additional $38,000.

That’s not to say $38,000 isn’t a lot; it just wasn’t as much as I was expecting. All of a sudden, the Starbucks drinks, at least one of them per day, were falling into the "I earned this" category, instead of the "wasteful spending" category.

Money and feelings are intertwined

That’s the thing: When it comes to these everyday purchases, how it makes us feel can be as important as how much it costs.

“The point of working is to make money to do things we like," says David Blanchett, head of retirement research at Prudential. "It’s obviously important to manage those expenses, but in my experience, it’s not usually a Starbucks habit that’s going to put someone behind, it’s other larger expenses.”

Is $60 a week a lot to spend on iced tea? Not necessarily. Not if you're cutting back elsewhere and if it's bringing you joy and value. If it isn't fulfilling that purpose, that's where it gets dicey.

My first Trenta of the day fit the bill. But my second Trenta? Not so much. I didn’t need that caffeine jolt. Often it gave me a headache, made me nauseous, and I knew it was the main reason I couldn’t stay asleep at night. There were many days I barely touched it, basically throwing away $4.83, yet there I was every afternoon, buying it again.

There was no value in going a second time per day after my daughter outgrew nap time at 2½. I should have dropped the habit then, but I didn't.

It comes down to figuring out which little purchases are good for you and which ones aren't, and making sure they're all within your budget.

“I do think it’s possible for the little things to be too much for some people, but it’s not typically just going to be one thing; it’s going to be lots of little or medium things that end up putting someone behind,” said Blanchett.

I'm still Starbucks free

It's been more than 15 days since I spent my last dollar at Starbucks, and I’ve saved $144.90. The first few days were rough. I had headaches and broke out in sweats, but after that, I was fine. I haven't really craved my Trenta Black Iced Tea, unsweetened with two Equal ( I had to write it).

I miss it from time to time, but not enough to break my resolve. As for my new riches, I haven't noticed a difference in my budget either, which goes to Blanchett's point, but maybe I will when it comes time to pay the mortgage.

The one thing this has taught me is that you can break any habit, no matter how long you've had it, if you put your mind to it. If you think you're losing the opportunity for hundreds of thousands or even a million dollars (even if you aren’t), it's a whole lot easier.

Donna Fuscaldo is the retirement writer at Kiplinger.com. A writer and editor focused on retirement savings, planning, travel and lifestyle, Donna brings over two decades of experience working with publications including AARP, The Wall Street Journal, Forbes, Investopedia and HerMoney.