What would you say to a 2-percent raise? Sound good? Then stop drinking coffee. While this might seem odd, based on a median income for American households of just over $46,000, 2 percent of their income is what the average American worker spends on coffee over the course of the year.
Over the course of a year, Accounting Principals' latest Workonomix survey found that Americans shell out $20 a week, or $1,092 a year, on buying coffee while at work.
Good news for coffee companies like Starbucks (SBUX), Peet's (PEET), Green Mountain Coffee Roasters (GMCR), and Caribou Coffee (CBOU), but bad news for the average worker.
Small Expenses Add Up
Between commuting, buying coffee, and going out for lunch, the average American's paycheck is getting stretched before it even gets home. Aside from the $1,092 spent on buying coffee, another $1,476 is spent to commute to and from work. In fact, higher prices at the pump may be great for the bottom line for gas companies like Exxon Mobil (XOM) and Chevron (CVX), but it puts a tighter squeeze for the average commuter.
Of course, should one add up the total quantity of liquids purchased, it seems clear that coffee is more valuable than gasoline. This, of course, makes total sense. After all, coffee is a delicious beverage brewed from imported beans and gasoline is no more than just organic matter trapped under ground for several thousand years, drawn to the surface through dangerous and expensive drilling projects, and put through a complicated refining process to untap the astounding levels of potential energy held within.
Lunch also winds up costing Americans. Some 66 percent of American workers opt to go out for lunch, averaging $37 a week for their mid-day meal, good for $1,924 a year. What's this mean? Well, added up, the average American worker (who eats out for lunch) is spending $4,492 a year before they even get home, close to 10 percent of their paychecks. So all you have to do is forgo coffee, pack a lunch instead of stopping by the local McDonald's (MCD) or Chipotle (CMG) every day, and walk to work and it's the equivalent of a 10-percent raise! No sweat. Except for the walk to work, that is.
"Small --but consistent-- expenses add up quickly over time, and it can be difficult for consumers to realize it because they're only spending a few dollars at a time. But, as our survey shows, those few dollars can quickly turn into a few thousand dollars," said Jodi Chavez, senior vice president, Accounting Principals. "Additionally, when you look at it over a worker's lifetime, that number grows exponentially. Consider the average American who works for about 40 years, starting their first job around age 22. By the time they retire at age 62 they would have spent at minimum $120,000 on coffee and lunch, not including inflation."
Older Workers are Thriftier
While eliminating all expenses surrounding commuting and spending the day at work is most likely impossible, it's certainly possible to find ways to cut back. Case in point, your older coworkers. Workers between the ages of 18 and 34 are spending significantly more on coffee and lunch than their older counterparts. The under 34 demographic is spending $24.74 a week on coffee compared to $14.15 for the over 45 group. This extends to lunch as well, with the younger workers spending an average of $44.78 a week when compared to the older generation's $31.80 a week.