Posted by Mike Smith :: April 18, 2008 @ 7:32 am

One of the first strategies often touted in personal finance advice is to cut your spending by not buying a coffee each day. Showing how a small, repeated expense adds up over time is insightful and may inspire change or at least consideration of tracking your finances. If you've tried cutting back on a small expense like coffee without success, try this trick instead: pay double for it.

Depending on where you buy your coffee, paying double might not get you to a $10/cup, but that is certainly possible at Starbucks or an upscale coffee establishment. When I say pay double for your coffee, I don't mean that you should buy two or place the extra money in the tip jar. Rather, pay for your coffee and then stash an equal amount separate from the rest of your money.

The main benefit of paying double for coffee is that it forces people, who claim that saving coffee money is too small an amount to help them, to start saving. If you can justify spending a small amount each day, certainly you can justify saving the same amount. Often, when people try to save money by not buying coffee, they simply end up spending that money on other things. So not only do they deprive themselves of the daily pleasure of a coffee, they do it without actually saving any money. By paying double, if only temporarily, you may actually see some benefits.

With your routine being twice as expensive as it used to be, it may also be easier to break the habit. By not buying coffee on days when you don't have the cash to cover your added expense or by cutting back on the number of times per week you do buy it, you can actually start saving more money despite the higher costs. In time, you may be able to cut your habit entirely, in which case you'll be able to save twice as much.