Personal Finance

Suze Orman says buying coffee every day will cost you $1 million over your lifetime - do you agree?

David Beren

Published: December 15, 2024 12:48 pm

For as long as I can remember, there has been criticism of buying coffee every day and the savings you would have if you made coffee at home. This argument is one of financial advisors’ biggest focal points, and they love to point out why you should make coffee at home and save yourself money every day. 

24/7 Wall St. Key Points

• Suze Orman is a big proponent of skipping the morning coffee expense. 
• Instead, Orman argues the value of making coffee at home. 
• Orman misses out on the idea that Starbucks is a mental benefit.
• Also: Are You On Track to Retire? Take This Quiz and Find Out (Sponsored)

This is the exact argument financial expert Suze Orman makes in this YouTube video in partnership with CNBC. She argues that once a week or three times a month would be okay, but the ritual of buying coffee every day, costing approximately $100 a month, is money that could be better spent in a Roth IRA. 

Ultimately, it feels as if rich people dislike nothing more than criticizing people who spend monthly money on coffee. For some reason, there is such a vast dislike for this purchase that it’s impossible to imagine anyone wanting people to spend money on themselves to have a little bit of joy. 

Spending Too Much on Coffee

According to Suze Orman, the argument is that far too many people are spending $1 to $3 per day on coffee at Starbucks, Dunkin Donuts, or their favorite local coffee shop. Her concern is that you are throwing money away if you spend $100 or something close to this number every month for something you can make at home for only a few dollars. 

Orman doubles down on her argument by saying that if you took $100 per month and invested it in a Roth IRA over 40 years, you’d have one million dollars. This all sounds good, but she’s not done yet, as she’s jumping into the deep end of this argument by saying it’s also about spending money on needs versus wants. 

Needs Versus Wants

Orman starts to go off the rails here because, in her mind, if you stopped spending money on wants and needs, she believes you could pay off your credit card debt, invest more, and live a richer lifestyle. Orman says, “that if you invest in needs versus wants, you would find the money to invest in your retirement account. You would find the money to get out of credit card debt.” 

In her eyes, any want is essentially just “wasting money,” and in my opinion, this seems to be a bridge too far. It’s easy for someone to say who is in a very different financial position than most people watching her video. Orman is missing out on what matters most: these wants are why people work so hard, often jumping into the gig economy to take a vacation, buy holiday presents, etc. 

Why Rituals Matter

What matters most here is that nobody believes making coffee at home is cheaper than getting coffee out. However, where Orman’s argument is easy to disagree with is that the rituals people have matter. If someone works 40-50 hours a week and wants to bring themselves a little happiness with a Starbucks order, by all means, they should be doing exactly that. 

So long as people aren’t deciding to buy coffee instead of baby formula, let people do what makes them happy. Rituals like buying coffee are essential ways to ensure positive mental health for someone who may look forward to Starbucks as a reward for a hard day’s work. 

Alternatively, a coffee shop could be a place to meet up with colleagues every morning to talk about their day, and it could include a social interaction component. There is no question that people have plenty of unnecessary expenses, but if the little things make people happy every month and don’t cost a fortune, by all means, enjoy that overpriced Starbucks coffee.