'You Are Peeing $1 Million Down The Drain' — Suze Orman Says Buying Coffee Is Why You Can't Pay Your Credit Card Debt Or Save For Retirement: 'I Would Not Insult Myself By Wasting Money That Way — And I Can Afford It.'

In an analysis of personal finance habits, Suze Orman’s 2019 CNBC appearance brings to light the impact of seemingly minor daily expenditures, such as coffee purchases. 

Orman challenges viewers to consider the long-term consequences of their spending habits, particularly focusing on the routine of buying coffee daily. 

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She uses an analogy to emphasize her point, suggesting that the habitual expenditure on coffee, which might appear trivial at $1 to $3 per purchase, could ultimately lead to a significant financial loss over time. Orman illustrates this by saying, “It would be one thing if you had a cup of coffee once a week, maybe three times a month, but that’s not what you do. You go in every single day.” 

Expanding on this, she makes a powerful comparison to drive home the importance of saving and investing. “$100 a month in a Roth IRA, over 40 years is $1 million,” she said. Orman brings this to a poignant conclusion, stating, “So you need to think about it as you are peeing $1 million down the drain after you are drinking that coffee.” 

This metaphor captures the essence of her argument — that daily coffee purchases, while seemingly small, can accumulate to a significant financial loss over time.

Contrasting Orman’s conservative estimate, recent findings from an Empower research report reveal a more lavish spending pattern among millennials on coffee consumption. According to the report, 62% of millennials are willing to spend $7 per day on coffee, amounting to $210 a month, because it brings them joy. 

This habit culminates in an annual expenditure of $2,520, highlighting a significant shift toward higher spending on daily comforts among younger generations. The report indicates a strong attachment to the ritual of purchasing coffee from favored establishments, like Starbucks or local coffee shops, despite the financial implications.

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Reid Litman, the global consulting director for Ogilvy and an expert on Gen Z and millennial behaviors, notes that opting for short-term happiness over financially prudent decisions is a prevalent trend among these demographics. This preference for “little treat” culture, amplified by social platforms like TikTok, reflects a broader societal shift where small, daily indulgences are justified as deserved treats, Litman told Newsweek.

Orman’s advice on financial discipline, where she argues against the wastefulness of buying coffee out and stresses the importance of distinguishing between needs and wants, stands in stark contrast to current trends. 

“Peeps, if you just simply used your money to purchase needs versus wants, you would find the money to invest in your retirement account," Orman said. "You would find the money to get yourself out of credit card debt.”

Despite her financial capability, Orman shared her stance. 

“I wouldn’t buy a cup of coffee anywhere, ever, and I can afford it," she said. "Because I would not insult myself by wasting money that way — and I can afford it.” 

This perspective challenges people to reconsider their daily spending habits, especially in light of the contrasting behaviors observed in younger generations.

Modest daily treats don’t have to be completely given up, but being mindful of their cumulative impact is wise. The key is being intentional with your money rather than mindlessly spending on forgettable conveniences and luxuries. 

Certified financial planner Jill Schlesinger advises, “If getting a $5 latte every day brings you true joy and you’ve balanced that into your overall financial plan, then have at it. But if that $5 is debt-financed, then it’s not a treat, it’s a problem.”

Finding this equilibrium between saving for the future and enjoying life's smaller pleasures in the present is an individual journey. It often requires taking an honest look at spending patterns, separating wants from needs and making conscious tradeoffs. This is where consulting a financial advisor can prove invaluable.

A professional can analyze your full financial picture — income, expenses, debts, goals — and provide an objective opinion on affordable indulgences and areas to cut back. They can craft a personalized plan that emphasizes consistent saving while still accommodating reasonable splurges that enhance your life satisfaction.

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*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.

Jeannine Mancini has written about personal finance and investment for the past 13 years in a variety of publications including Zacks, The Nest and eHow. She is not a licensed financial adviser, and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Mancini believes the information contained herein is reliable and derived from reliable sources, there is no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information.