According to the Merriam-Webster Dictionary, the word “frugal” means “characterized by or reflecting economy in the use of resources”. In an attempt to be frugal with my energy resources, I have historically been willing to spend a bit of my financial resources. So, I compiled a quick computation to analyze how much money I drink every time I make a cup of one of my four favorite hot beverages. In the computation, I included daily depreciation of the machines (depreciation is a method of cost allocation used in accounting so that the cost of the machine is allocated systematically over the asset’s useful life). Please note, the analysis excludes electricity of $0.0008 per prep and water of $0.001 per prep as well as cost of mug, spoon, trash removal, and labor.
The chart compares the following beverages:
- Starbucks Brewed Coffee with 1.5 tablespoon of creamer ($0.51 per mug)
- 12 ounce bag of Pike Place purchased from Walmart (price as of 5/14/2020)
- Original Nespresso Lungo with 2 tablespoons of creamer ($1.05 per mug)
- $7 for a pack of 10 pods on Nespresso’s USA website (price as of 5/14/2020)
- Twinings English Breakfast Tea with 1.5 tablespoons of creamer + sugar ($0.31 per mug)
- 50 count bag from Walmart (price as of 5/14/2020)
- Twinings Pomegranate, Raspberry & Strawberry Green Tea ($0.22 per mug)
- 20 count bag (price as of 5/14/2020)
| Starbucks Brewed | Nespresso Lungo | Twinings English Breakfast | Twinings Green Tea | |
| Raw Materials: | ||||
| Coffee Beans | 0.32 | – | – | – |
| Coffee Filter | 0.01 | |||
| Lungo Pod | – | 0.70 | – | – |
| Tea Bag | – | – | 0.13 | 0.16 |
| Half & Half | 0.10 | 0.13 | 0.10 | – |
| Sugar Cube | – | – | 0.02 | – |
| Material Cost | $ 0.43 | $ 0.83 | $ 0.25 | $ 0.16 |
| Fixed Asset | ||||
| Cost of Machine | 30.00 | 100.00 | 20.00 | 20.00 |
| Useful Life (in yrs) | 6.00 | 7.00 | 5.00 | 5.00 |
| Annual Depreciation | 5.00 | 14.29 | 4.00 | 4.00 |
| Daily Depreciation | $ 0.08 | $ 0.22 | $ 0.06 | $ 0.06 |
| Cost for a Mug | $ 0.51 | $ 1.05 | $ 0.31 | $ 0.22 |
Overall, my caffeine habit is not economically frugal, but it preserves my energy resources. I may, however, consider buying in larger bulk, re-evaluate the cost-benefit of my brand choices, or change my consumption patterns. Food (or perhaps drink) for thought.
Cheers,
Kristin
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Categories: Thoughts
