A MORNING cup of coffee has become a ritual for many commuters with a coffee shop on almost every corner.
But with the average cost of a coffee nearing £3.25 many of us might not realise just how much money we are spending on caffeine.
However, one savvy saver has become acutely aware of how much he was wasting after he started a wacky new challenge to set some savings aside.
Mike Ashley, from Buckinghamshire, was looking to kick his caffeine habit, so decided to pay himself a reward every time he managed to skip a coffee.
The 48-year-old business teacher started using an app on his phone to pay money to his savings account every time he chose not to buy a coffee, and very quickly the savings pot had racked up hundreds of pounds.
He has now managed to stash away almost £2,000 by rewarding himself for passing up on the beverage, with extra on top from the interest on his new savings account.
Mike realised that after food prices went up he was spending around £8 a day on trips to coffee shops.
“A cup of coffee started reaching £3 or £4 and I quickly realised just how much the habit was costing me,” he said.
“I drank a lot of coffee socially, but I decided enough was enough and started searching for a way to beat the system.
“I love the idea of finding tech solutions, but when I first started searching for a coffee savings app the market was flooded with coffee rewards apps, most of which encourage you to buy more.
“Of course it feels good to get the free coffee, but you don’t realise you’ve actually paid £40 to get it.”
But then Mike discovered an automation app called If This Then That, which connects different apps on your mobile.
Mike learned that If This Then That could link up to his Monzo banking app, so he set up a widget on his phone that would move £4 from his current account into his savings account every time he tapped it.
The money now stashed away in Mike’s coffee savings pot earns 4.5% interest, so he’s actually earning even more money by skipping drinks.
“It was really easy to cut out the coffee, I would go into a coffee shop and just order water instead and I was telling all my friends about it,” he said.
“That didn’t mean I stopped drinking coffee completely – I still choose to have a coffee now and then – but I mostly just support small independent coffee shops and skip the rest.
“I also still have coffee in the morning I just bring some instant coffee packets with me to work and use the kettle there, which are nowhere near the cost of a high street coffee.”
Mike’s average coffee costs have gone from around £40 a week to just £8 a week.
Since starting the savings challenge, Mike has seen a huge improvement in his physical and mental health.
“I drink more water now instead of drinking coffee, which used to cause my headaches when I didn’t drink it,” he said.
“I also walk more now instead of sitting in a coffee shop. I just feel healthier generally.”
Mike said he plans on moving house so might put the money towards renovation costs or to buy new furniture for his new home.
“I would definitely recommend this coffee money savings hack to anyone – you get the same kind of dopamine hit when you press that red button on your phone,” he said.
“I might try and do another hack for every time I go to a petrol station and get tempted to buy a snack.”
Amy Knight, personal finance expert from Nerd Wallet, said it’s a good idea to get to know your budget and go through your bank statements and identify if you have any regular habits you could kick – and pay yourself in the process.
“Most people are really surprised when they see how much they are spending on things like coffee,” she said.
“As soon as you get paid, ensure your essential outgoings are covered (such as rent, utility bills and your phone contract). Then consider moving a chunk of the remaining money into a savings account before spending anything on “wants”.
“Setting up a standing order to move money into your savings each month means you’ll have one less thing to remember.”
To start paying yourself for kicking an expensive habit, go through your bank account and identify how much you spend on it on average – for example, on a cup of coffee.
Then, download the If This Then That app on your phone using either the Apple Store or Google Play store.
Once you have downloaded the app, sign up with your Apple, Facebook, Google or email details.
You will then need to connect the If This Then That app to a banking app, such as Monzo.
At the moment Monzo is the only major banking app that If This Then That will link to, but your bank may link to a similar app.
You will then need to set up your own money automation system – make sure you have a Monzo savings pot to move your money into.
You can create your own snazzy widget to press to activate the automated payment.
This means every time you tap the button, an amount of your choosing will be automatically transferred into your savings pot and you can watch the figures rise.
HERE are some popular money-saving challenges you can use:
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