This is in response to another post that seemed to largely miss the point of a common quip seen here: https://www.reddit.com/r/personalfinance/comments/ark0rz/about_that_5_cup_of_coffee/
In a nutshell, that post - and the bulk of its upvoted comments - seemed to advance the idea that forsaking a $5 Starbucks coffee every is more about being frugal, and that folks should indulge if it truly makes them happy. However, there's a huge disclaimer I think is missing from that narrative. While some do push frugality to the limit, that's not at all what the "$5 Starbucks" advice is about.
When people come here for budgeting advice, rarely are they looking for ways to simply sock even more money into savings. They're looking for advice because their budget is in the red, they're not saving anything, or they simply don't know what to do. That's when the common quips come up - quit buying $5 Starbucks every day, don't eat out/drink out as often, only buy used cars, etc.. The reason these (and others) come up so often is because they are, very commonly, the usual pitfalls that are sinking peoples' budgets. With the limited information we usually have to work with, telling someone to over-correct is often the easier/safer bet than suggesting they do something that will under-correct the problem.
When anyone sets up a budget, the proper way to do so is by starting with mandatory expenses (rent/mortgage, utilities, food, etc.), then moving on to necessary expenses (clothing, grooming, transportation, savings, etc.), and then finally addressing discretionary expenses (fun money, etc.). At each level you look at ways to minimize your expenses, usually because increasing income isn't an option.
And here's the kicker. When people are giving the advice to avoid spending $5 on coffee, what they're really saying is to avoid spending $5 out of your mandatory budget. $5 Starbucks is a discretionary expense - not a mandatory expense. This is the huge, unspoken disclaimer hidden behind that quip.
When it comes to discretionary spending, do whatever you want. Buy that $5 Starbucks. Buy a brand new car. Go traveling. Invest in a MLM pyramid scheme. While everyone is going to have their opinions on how you spend that money, those are the opinions that are worthless. It's your life, and it's your lifestyle. Have fun - but only with your discretionary budget.
Personally, my wife and I spend a big chunk of our discretionary budget going out to eat. We established a baseline budget that we know we can fall back to - no cable, cooking cheap meals at home all the time, etc. - and then everything that goes on top of those sums ends up coming out of our discretionary category.
If you don't have a discretionary budget, or you don't have enough in your discretionary budget to do $5 Starbucks every day, then you simply cannot afford it. Frugality has nothing to do with it. At that point you have three options: (1) look at ways to reduce your mandatory/necessary spending even more to give you enough discretionary budget, (2) don't get Starbucks as often, or (3) find some way to reconcile with yourself that spending $5 on Starbucks means you won't be able to afford rent this month.
TL;DR
It's not at all a question of frugality - it's a question of whether or not you have enough discretionary budget to afford it. If you do, then go ham.
Submitted February 17, 2019 at 12:32PM by Einbrecher http://bit.ly/2S64sw5
