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You might not think that you could pay off a house with the money you’d save by not going to Starbucks or eating out, but you might be surprised. While abstaining from Starbucks alone may not pay for a house, practicing self denial versus instant gratification definitely will.
Ben Franklin said it well: “Beware of little expenses. A small leak will sink a great ship.”
(P.S. – this is one of the filler quotes in my cookbook…)
Why Starbucks is a spiritual matter
Money and possessions are the second most referenced topic in the Bible – money is mentioned more than 800 times. – Sheryl Nance-Nash (Source – this is a really good article.)
God obviously does care about money and what we do with it. The Bible covers matters such as saving, debt and lending, tithing, and giving; and it also references related matters such as self control and the reward of patience. God calls us to use our money wisely. Why? So we have lots to hoard? Nope.
Let him that stole steal no more: but rather let him labour, working with his hands the thing which is good, that he may have to give to him that needeth. Ephesians 4:28
When we use our money on self-centered things, aren’t we robbing God? Aren’t we withholding blessings from the people in need around us?
This looks different for everyone. Not everyone goes to Starbucks. But we all have things that we buy to please our fleshly desires, and the reason I’m writing this post today is to remind myself to reevaluate what I spend my money on. What I spend my money on is a great indicator of where my heart is. Saying no to myself in matters of finance is a great practical exercise in self control which will translate to my spiritual life. They go hand-in-hand. In fact, I don’t think they’re separated at all.
Am I saying that all Starbucks and useless discretionary income is wrong? No, I don’t think it’s wrong to have a treat every once in awhile. However, I do see a problem with making a habit of it.
This post is just meant to make you think. And to let me play with some numbers, because I like to play with numbers. (And this, children, is why you need to pay attention in algebra class. Or just use this nifty compound interest calculator.)
The power of interest
“It takes money to make money.” We’ve all heard that phrase, and it’s quite true. Just think about it in reverse. If you don’t have money, you have to borrow for basic necessities. Debt comes with interest – the kind that’s not in your favor – and that interest will suck so much money out of you that getting back on your feet financially may seem downright hopeless. Did you know that if you take out a 30 year loan for $100K at 3.92% interest and pay in monthly installments, you will pay $70,213 in interest?! That’s right – you just paid an extra SEVENTY PERCENT for that house. Youch.
Thankfully interest works the other way as well. If you invest over an extended period of time, you can earn money without having to lift a finger. You might not think that you have any excess money to set aside for saving, but I challenge you to take a look at your discretionary income. If you cut some of those trips to Starbucks out of your week, how much money can you save/make? Let’s run some numbers.
- A Grande (medium) Skinny Peppermint Mocha from Starbucks will set you back a cool $4.65.
- If you go 4 times a week (to those people who are raising a skeptical eyebrow – yes, this happens), that’s $18.60…
- Which translates to $967.20 per year.
I currently have some money invested in an investment program that pays 3% interest compounded quarterly. Interest rates vary, but if you look around and think outside the box a little, there are always investment opportunities available. If you have money to invest, you can jump on those opportunities when they come. Wheeling and dealing can be a form of investment with a pretty high reward if you find a niche and do some research. But anyway, to keep things easy, here’s what I could make with my current investment program if I invested the above Starbucks numbers quarterly:
- Over 5 years = $5,235.55
- Over 10 years = $11,314.99
- Over 20 years = $26,571.54
Is that worth some self denial? You tell me. By denying yourself the pleasure of Starbucks for one year, you could have an extra $985.47 to give away (this is principle + interest).
A personal example
I’ll be honest – Starbucks isn’t my thing. I just picked it because it was an easy, universal example. (Because how many people in this world would have to consider scaling back on their sheet music purchases as frivolous discretionary expenditures?)
One discretionary choice I recently made was to upgrade to a smartphone from a
dumb basic phone. I’ve had a basic phone for 3 years and it’s served me well, but I do enough traveling now that I felt I needed to be able to keep up with bloggy stuff better on the road. The real catalyst to my getting a smartphone was the fact that I want to be able to sell cookbooks in person and accept payment by credit card. I thought it would be interesting to run some numbers and see how much I’ve saved in the past 3 years by having a basic phone ($15/month on my parents’ plan) versus a smartphone ($27/month for 2 years, then down to $20/month once the phone is paid off, assuming that I don’t upgrade at that point).
The number I came up with: $607.27 (this is principle + interest made at 3%)
So now I have to ask myself – what did I do with that money? Did I use it for God’s glory, or did I fritter it away in another way?
What if you take the same principle of self denial and find other ways to cut back? How many times do you eat out per week? Say you eat out 4 times a week and spend an average of $5 at each meal (which is probably a low estimate, but that will help make up for the fact that the food you make at home costs money too). If you invested that money quarterly at a rate of 3% (interest compounded quarterly)…
- after 5 years you’d have $5,629.62,
- after 10 years you’d have $12,166.66,
- and after 20 years you’d have $28,571.55.
Adding the amount saved and earned in interest by eliminating Starbucks and eating out and investing the money instead, you could have
- $10,865.17 after 5 years,
- $23,481.65 after 10 years,
- and $55,143.09 after 20 years.
Y’all, that is over fifty thousand dollars that you wouldn’t have had before! You could sponsor almost 20 orphans for 5 years with that amount of money.
Cold hard numbers
Just suppose that you could set aside $100 a week for savings. How much money do you think you’d have in 20 years? Let’s see. At 3% compounded quarterly,
- after 5 years you’d have $28,148.12,
- after 10 years you’d have $60,833.28,
- and after 20 years you’d have $142,857.75!
There’s your house.
Or…it could be a house for someone else.
Writing this post has challenged me deeply to evaluate what I’m spending my money on – or rather, on whom I am spending my money. All the savings and investments in the world are really quite useless to me if I ignore God’s commands to give.
I challenge you to add up all your discretionary income expenditures. (That means non-necessities, so this category includes things you do not need plus the extra you are spending on items that are necessary but more extravagant than you need. For instance, the amount you are spending in Bath & Body Works products above and beyond the cost of Dial soap.) How much are you spending on discretionary items each week? Each month? Each year? Plug the number into this interest calculator and figure out how much money you could save/make if you invested that discretionary income money instead of spending it. What good could you do with the results? It starts with things like Starbucks.
Do you find this topic interesting? Convicting? What are the most common leaks in your ship? Have you run any numbers? Please comment below and share!
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