I'd say if you are at the point where spending $12/day on coffee and lunch does not make a difference, you've already won. The median household income in the US as of a couple of years ago was between $30-40K, after 401(k) and such but before taxes. The average figure for single or head of household filers is around $35K.*
$12/day is the equivalent of $3120/yr -- for the average American, almost 10% of gross income. If you choose to invest that, you end up with almost $700K by retirement age (assuming 7% average returns). That alone will provide over $27K of income every year for the rest of your life -- a figure that is probably close to 100% of pre-retirement take-home pay, even before you count SS. And even that guy can RE if he can find another $10-12/day to save.
Honestly, it's attitudes like this that put people off and give people excuses to argue that they can't do it so why try? Making an income that allows you to save 80% is a massive fucking privilege that is shared by only a very small percentage of the US population. So telling everyone else sorry, sucks to be you, you've lost, isn't exactly going to convert 95% of people to the magic of frugality. And the reality is, it's those people who need this advice the most. And we as a society would also benefit far more from "average" folks achieving financial security than from privileged folks like us bugging out of the working world a few more years early. So if your goal is to spread the gospel of MMM, do it in a way that appeals to the average guy, rather than making it sound like some exclusive club to which the 99% need not apply.
Finally, it's a mistake to assume that low incomes are forever. My mom managed to save money even when she was a single mom on food stamps -- even if it was $5/week, she put it aside for our future. As a result of her hard work for close to 10 years, she got a steady, decently-paying job, and we were able to move into a neighborhood with good public schools that then set me up for my own success. But there were dozens of times over the years when we could have fallen off the cliff, because if you don't have a cushion, maybe you can't finish your degree, or maybe you need to take a crappy job just to make ends meet. It was saving that little bit when she didn't have much of anything that helped her get to the point where a better job was even an option, which in turn ultimately allowed her to make the kind of salary that she could save 90% of. Just because you can't hit 70-80% savings at 20 or 30 doesn't mean you shouldn't do what you can.
*Note that the first figure is median and the second calls itself "average," which I assume is the mean and so is skewed by higher-earners. I am focusing on the single filer, because the scenario involves a single coffee and lunch per day. If you are going to look at the median household income figures that are closer to $60K, you also need to multiply those figures by two for the two adults involved, so the end result is basically the same.
Good post.
Where did 30-40k come from? A quick googling shows that median income in the US is 57-59k, (
http://www.businessinsider.com/us-census-median-income-2017-9)
I was never saying that $12 on coffee/lunch was smart or responsible, simply that if you are regularly spending that and saving nothing, then you're likely a spendy pants who has way bigger issues, and they should be tackled first as they can make the biggest impact. I think waste follows the 80-20 rule, and while housing/transport probably fall into the 20% of items which result in 80% of your waste. Get those under control, and then you can start nit-picking at the 80% smaller items that result in the 20% waste like coffees, paying for parking when free is available 1 mile away, cable, newspaper subscription etc.
So you save your 3k or ~5%, how many years until you can retire and supplant your 58k income? Basically never. Hell even if you only make 30k like you alluded to, a 10% savings rate still chains you to a job for 50 years. Or you can go full mustache mode saving half, in which case the difference between 45% and 50% is minor, 14 years vs 16.
https://www.mrmoneymustache.com/wp-content/uploads/2012/01/years_to_retirement.pngSo if your savings rate is around 0%, an addition 3k/yr makes the difference between never retiring and almost never retiring. If you're already around 50% than it's 2 less years. That's what I meant when I say that 3k/yr is a rounding error. On it's own, it doesn't have the power to dramatically alter your situation. The true game changers are going from ~0-10% savings rate to 40-50% savings. That *could* happen by eliminating coffees, but only along side other meals out, fancy new clothes, expensive shows, and a host of other small expenses which add up.
I believe it's possible to be both an accomplished saver, and make room for little luxuries, and that's where I would put coffee/lunch. If you live in a modest home, bike to work, save half your income, then you likely know what you're doing. As long as buying these fancy coffees and lunches is a
conscious choice because you're a coffee aficionado or foodie or whatever, while being fully cognizant of their wastefullness, then I think it's fine.
I think more than blanket statements like "don't buy coffee" what's needed is to teach people honest cost-value analysis. People just do it because it's the default thing to do, and proceed without even thinking. You can make equally good coffee and lunches for like 1/5th the price. To me spending $12 on something I can put together for $2 borders on obscene.
