One of my first posts was about the Tim Horton’s Savings Plan (which was a blatant rip off of the Latte Savings Plan, however, I don’t remember anyone copyrighting that idea), and I’d like to revisit this post.
It is hard to do a straight comparison given that Timmy’s has changed their sizes to match their major competitors sizes (although I applaud that they do actually have a small size, which is called small and not medium or tall), but I will attempt to see if the concept still holds water. We could call it the latte savings plan again, though, since Tim’s now sells lattes too.
First, let’s make some assumptions:
- A Medium Coffee is $1.60 now (which is the same size as a large was 5 years ago)
- No donuts, breakfast sandwich or even Timbits (talk about free advertising for Tim Horton’s).
- Three (3) coffees a day from Tim’s (a little excessive, but not out of the ordinary either) are drunk.
- You only buy coffee on weekdays (which again is unreasonable, since if you buy coffee at Tim’s you do it pretty much every day of the year).
So the Calculation is simple:
δ = $1.60 * 3 Times/day * 5 days * 50 weeks/year
Which means δ is about $1020 $1200 in a year of paying for coffee and such (adds up doesn’t it?). This is up from the $945 when I first kicked this idea around, but that only is about $1.50 more a week.
Here is the Latte Savings Plan Arithmetic
If we are going to look at this for 10 years with a very slow growth of 2% or so as well you end up with a simple equation for growth every year:
δnew = $1020 $1200 + ( δold * (1.02) )
With this in mind the year by year progression:
| Year | Funds |
| 1 | $ 1,200.00 |
| 2 | $ 2424.00 |
| 3 | $ 3672.48 |
| 4 | $ 4,945.93 |
| 5 | $ 6,244.85 |
| 6 | $ 7,569.75 |
| 7 | $ 8,921.14 |
| 8 | $ 10,299.56 |
| 9 | $ 11,705.55 |
| 10 | $ 13,139.67 |
Thanks to me going with a much more conservative growth of 2% (previously I assumed 5%), but still a worthwhile exercise to see where you are spending your money.
If you smoked (and quit) just think about how much bigger those numbers might be?
And thanks to my reader who pointed out my ARITHMETIC incompetencies, as well!
I love my Starbucks (we like hanging out there in the winter and chatting), and I like the nice treat every week.
What about the donut factor from Tim Hortons?
Do you know what would be a good app – people putting in their vice and showing how much it costs them!
I generally go to Starbucks for their Grande size coffee almost every day. I have noticed that lately costs are lower. Last year I spent $730.00 at Starbucks, but my last 12 month costs are lower at $585.00. I do have gold Starbucks card which gives me a free drink every 15 cups.
I go to Starbucks to get out of the house and away from my computer for a while every morning.
I just want to point out that you cannot assume that costs will ratchet up, but can takes some unexpected turns. (Costs in 2009 and 2010 were $611.00 and $626.00.)
Bye the way, a 2% increase in year two gives you $1224 spending, not $2424.
But if you add $1200 from that year you do, don’t you? I am assuming you continue to add you 1200 every year too.
I too have a Gold Card, and if you use their free Wi-Fi that is good (but don’t do your banking there, god knows who is listening on public wifi networks).
Not a coffee drinker. My poison is Coca-Cola. A case of 24 on sale here is 6.99 so I stock up then. With taxes that is about 32 cents a can. At the school I attend, a can is $1.65 and a bottle is $2.50 in the machine or 2.68 in the campus store. Being an addict, I could drink 3-4 bottles in a day while working on school stuff(I am a klutz so I buy the resealable bottles to avoid accidents. More cans drunk at home as well.
I would hazard I am about equal to a 2 pack a day smoker when it comes to my addiction.
AKA OUCH financially!
Coke and Coffee both have their side-effects that we must all be careful with. As a reformed smoker, I feel I can be all pious about your smoking habit too 😀 (not really, but please quit, I don’t need any of my readers getting ill, I have so few).
On the otherhand if get your coffee at McD’s (same grounds as Timmies, same machines as Starbucks) you’d only pay $1/day (locally they allow at least one refill, sometimes unlimited – but I’ll assume you’re not abusing the system and trying to refill the same cup all week).
And on weekends it’s reasonable you make your own coffee since you’re not running out the door to catch the train and there’s no coffee shop around the corner.
Now that’s $5 a week, times 50 (2 weeks off, at least, probably more). That only comes to $250 a year.
So what you’ve proven is that even Timmies is a rip-off! Not just the Second Cup/Starbucks crowd.
And people hate McDonalds?!
The hate for McDonalds was for their fatty food and such, but now they are going upscale, I wonder how many of their mainstream customers they have alienated? As for McD’s coffee? Why not just make your own coffee at home all the time 😀 ?
I still have no idea how anyone can afford to smoke.
I’m not sure I see where the $1020 is coming from; don’t you mean $1200?
Hard to believe I have a math degree eh? OK, you caught me, and now I have a new reader who comments! That makes 4!!!
Thanks!!!