I don’t know about you, but I hear this so much it is becoming a cliche. You turn on the TV and someone is asking you to support a charity or village in Africa, talking about how it is ‘less the the cost of a cup of coffee a day’. Heck, according to Craigslist you can even get legal services for less than the cost of a cup of coffee a day.
Even I have used this term: back when I was in University one of the jobs I held was as a computer salesman. I liked my job because I got to work with people and computers, and the store stocked systems I was comfortable selling. When someone thought a computer was too expensive, one of the techniques we were trained on was to point out that the monthly payment was only X dollars per day… ‘SURELY you can afford only X per day, that’s only the price of a cup of coffee!’
People who want your money like to express it in daily amounts. Why? because the daily amount is smaller and the nice small number serves to distract you from the large monthly number and even larger yearly number. It is natural to look at a small number like one or two dollars and think ‘no problem, I can afford that!’
When you hear a price given in a small amount for a short period you should take care: what does that equal for a month? For a year? What is the total cost of all the small payments? That does not mean that you shouldn’t be giving money to charity, you certainly should. It does not mean you should not buy the item you want, just that you need to look past the small payments and keep the big picture in mind.
Of course, there is nothing keeping you from turning the tables. If you find it hard to put away $100 a month toward an emergency fund, remember that you are only trying to save around $3 a day. C’mon, I know you can squeeze $3 a day out of your budget! It’s less then the cost of a cup of (Starbucks) coffee a day. That’s called Financial Planning.