I don’t mean to complain. I understand the economics of why the price has gone up. The beans, rent for the shop, wages for the employees, specialty milks—all those costs have increased. What used to cost $4.20 on average for a pound of ground coffee in 2019 costs $6.19 today.

Of course, I live in a notoriously expensive city where most everything is costlier. I also don’t need to buy a coffee at my local independent coffee shop (there’s a Dunkin’ right down the street that offers cheaper brews). And I don’t need to buy the slightly more expensive tea variety I prefer, or the new hardcover release from my favorite author. Yes, yes, I know. These are only the small luxuries that make life worth living, but that I increasingly find myself cutting out anyway in recent months.

I don’t mean to feed into the Skip Your Daily Latte to Become Rich industrial complex. There is, perhaps, no greater boogeyman in personal finance media than the daily cup of takeaway coffee, shorthand for a certain type of financial frivolousness, an easy explanation for why some—particularly young adults—struggle to buy homes or get out of debt. 

I’ve long argued the opposite of that. Why blame a small daily luxury—whether coffee or something else—for why people can’t save when wage stagnation, the increased cost of living, and corporate greed are right there? Over the past two decades, the same generation—millennials, of course—that has been scolded to stop buying coffee is the same one that has faced the Great Recession, a surge in student loan debt, the COVID-19 pandemic, the further degradation of the pension system, and decades-high inflation. Even if they could afford a home, there aren’t many to choose from, given the U.S.’s persistent housing shortage.

But as costs spiral ever upward (in tandem with tipping expectations), even staunch latte defenders are rethinking their daily cup. Forgoing it still won’t allow someone to save up for the down payment on a house (especially not in today’s market), but the increased cost of these daily luxuries certainly isn’t helping budgets stretched thin by the rising cost of living writ large. When financial push comes to shove, discretionary spending is easier to trim than housing costs or student loan bills.

It doesn’t have to be a cup of coffee, of course. That’s simply a stand-in for whatever your variety of daily treat is, whether that’s buying lunch at work, occasional splurges on premium-brand clothing, or, yes, a run to Starbucks. And most of those costs have crept higher and higher over the past few years due to persistent inflation. What used to be an affordable indulgence is becoming, well, prohibitively expensive.

It could explain, in part, why Americans are so persistently down on the economy, despite the fact that many are, on paper, doing better than they were previously. A recent survey from financial services company Empower and Harris Poll found that 54% of respondents define financial happiness as being able to enjoy everyday “luxuries” without worry. But as the price spirals ever upward, that happiness becomes more and more costly. And if it’s a daily habit, it’s an even more noticeable increase than something that may cost significantly more but is purchased less often.

As it gets harder to budget for life’s small pleasures, Americans have to make tougher choices about how they spend their dollars.

“I don’t believe that cutting out your daily takeout coffee will fix all your financial problems or make you suddenly able to afford a house, but I do believe that many frequent small purchases may be adding up to a lot more than many people realize,” says Ashley Rittershaus, a certified financial planner (CFP) and founder of Curious Crow Financial Planning. “As small treats become increasingly more expensive with inflation, now is a great time to do the math on how much they are really costing you.”

Spend mindfully

A $6 daily habit seems quaint compared to the $31,500 needed for the down payment on the median home. But as with many things in personal finance, it’s all relative. Small luxuries add up fast, especially now, and especially in combination with the increased cost of, well, everything else.

Luckily, that means making small changes to habits can also “reap huge returns,” says Andrew Latham, CFP and director of content at SuperMoney.com.

“Mindful spending, taking advantage of deals, and prioritizing experiences can make these luxuries more sustainable without compromising on enjoyment,” says Latham.

One way to make enjoying the little things more sustainable is to limit them rather than cutting them out completely, says Brittany Pederson, director of deposit and payment operations at Georgia’s Own Credit Union. In the case of the takeaway coffee, that could be to one day a week, or when you run a certain errand or go into the office. “Saving money does not have to mean depriving yourself,” says Pederson.

Another option, according to Rittershaus, is to find less expensive alternatives. What is it about your luxury you love? If it’s the taste of the coffee, consider upgrading your home brew station. If it’s the break from work or the change of scenery, consider taking a walk instead and see how it affects your mood.

It can also help to understand the fated $6 latte in your larger budget, says Yuval Shuminer, founder of budgeting app Piere. Spending $6 on coffee five days a week for a year adds up to $1,560. Is that price worth the boost to your mental health?

“Sometimes that $6 iced venti caramel cold brew is the only thing standing between you and a bad day,” says Shuminer. “That means that the drink is creating a lot of value for you, and financial management is about understanding what brings you value and dedicating your resources there.”

That said, you’ll also want to consider the opportunity cost. If your budget really is tight, would you feel better if you had that $1,560 in your savings account, or put toward something like a gym membership? These are all things to consider, Shuminer says.

At the end of the day, you want to do what will bring you the most value, literally and metaphorically. Perhaps a deeper perusal of your budget reveals you can afford the inflated treat by cutting out something else; perhaps you realize you’re better off without it.

“We are all wired differently, and must decide how to best allocate our scarce resources,” says Robert Johnson, professor of finance at Creighton University’s Heider College of Business. “The problem that people get into is that they spend money on everything and don’t prioritize. Prioritize what makes you happy and direct your resources there. Minimize spending on items that don’t really matter to you.”