82% of working Americans paid an average of $21.32 per week on coffee in 2013. While spending $4 on coffee every weekday may seem inconsequential, calculating opportunity costs reveals significant consequences. Coffee expenditures at the rate of $20 per week amounts to $1,040 per year. The same $4 per day invested in a Roth IRA would allow you to start retirement earlier by 3.26 years. While coffee may not be your guilty pleasure, it is worthwhile to calculate your
“inconsequential” daily expenditures so that you can spend money with intention.

Sources: Accounting Principles Workonomix Survery, 2013

* Assuming normal inflation rates and portfolio returns of 9% per year, a 25 year old earning $80,000 a year, and adding 10% of their income to a 401(k), would be able to accumulate $3.8 million in their retirement portfolio over 40 years of work history. $40,000 a year would be needed for 25 years of retirement. The same person who also added the money from their coffee budget to fund a Roth IRA would accumulate $4.3 million in their retirement portfolio over 40 years.