Beating the latte factor: One money nerd’s quest for the best cheap coffee

Beating the latte factor: One money nerd’s quest for the best cheap coffee

Like J.D., I'm a recent convert to coffee. For most of my life, I preferred to consume my caffeine cold in the form of Diet Coke. And then…fate intervened.

Four years ago, when my family moved to Oklahoma, my sister-in-law gave us our first Keurig coffee maker. I thought, “That's an interesting gift for a family that doesn't drink coffee.”

But a set of sample k-cups came with the machine, so we started trying them.

The kids liked the sugary cups which were more like hot chocolate than coffee. And I found that I liked the taste of coffee now and then. I played with combinations of coffee, sugar, and milk until I found out I liked it a lot. I later dropped the sugar and went straight for the coffee/milk combo.

Within a month or two, I was hooked. But I started wondering: “We're drinking a lot of coffee. Is this the best deal? What are my options for finding the best cheap coffee?” Because I'm a money nerd, I decided to find out.

My Quest for the Best Cheap Coffee>

The Latte Factor

As some of you know, the often-derided phrase “the latte factor” was coined by David Bach in his book The Automatic Millionaire.

It was meant to illustrate the impact small purchases can have on a person's finances. Small expenses don't seem like much, but they add up over days and months and years. By minimizing small expenses and saving the difference, a person can build wealth over time.

Bach used coffee as his example, but he could have used any number of small purchases to illustrate his point, anything where money trickles out here and there — a daily muffin at Panera, a soda or two in the machine at work, lunch out every day, and so on. (Rumor has it that J.D.'s “small leaks” include movies from the iTunes store.)

When we got our Keurig, my brother-in-law had given me a rule-of-thumb for buying k-cups: 50 cents or less per cup was a “good deal”. So I had a guideline to work against as I decided what I should spend on coffee.

As my coffee obsession grew, I discovered Starbucks (of course) and learned that a latte can really rack up the spending. I don't know about where you live, but in my corner of the world a venti latte with only one shot costs $4.60.

Put that into any financial calculator at a couple lattes a day for 20 years and it adds up to some serious moo-lah. (Get it, “moo”-lah and “latte”? Never mind.)

Anyway, that sort of spending could derail retirement if it got out of control.

“Beware of little expenses. A small leak will sink a great ship.” — Benjamin Franklin

Nerds Gone Wild!

Soon after I retired, I started walking quite a bit (my goal is 15,000 steps per day). It was ever-so-natural to stop by our local Starbucks and grab a latte while I was out. One was particularly nice on those cold Colorado winter mornings.

By the time I had racked up three free lattes with Starbucks points, I started thinking this habit was way too expensive to have in retirement. Yes, I could afford it if I had wanted, but that's just not how I roll. I thought I could probably make my own latte that tasted just as good for a lot cheaper.

And so the challenge was on!

At my last employer retirement, many of my co-workers were hard-core coffee aficionados. I'd go to the kitchen and be surrounded by all types of coffee, various machines for making it, and different techniques that were “guaranteed” to make the “best” coffee. At least that's what each person claimed — that their method/beans/process resulted in the best tasting coffee possible.

I asked questions and discovered the world of pour overs, French presses, and all sorts of things that were previously foreign to me — each claiming to be better than the rest.

In the end, I knew I needed to try several alternatives to see what tasted best to me. I began to experiment with the following:

  • A variety of k-cups at various prices and coffee-to-milk ratios
  • Different types of coffee (light, medium, and dark) in a couple forms (already ground versus beans)
  • Differing methods of preparation including pour overs, French press, and drip

While doing this, I tracked the cost per cup to see how low I could get the price. After all, I was retired and had plenty of time on my hands!

Through the process I began to narrow down what I liked best. For me, this included:

  • About a 50/50 split of coffee to milk — 6 or so ounces of each in a cup
  • Dark roast blends over regular or light
  • Beans seemed fresher/more flavorful than pre-ground
  • There wasn't much difference between the processes except the mess, so since the Keurig was the easiest to clean, I stuck with it

It was actually a pretty interesting process. A whole new world came to life for me as I experimented. I also supplemented my efforts by reading about coffee online, as well as chatting to anyone who claimed to know anything about making great coffee.

Note: Former money blogger Matt Giovanisci now runs a site dedicated to making a better cup of coffee: Roasty Coffee. If you're into this stuff, you should check it out.

My Quest for the Best Cheap Coffee

As noted above, I established a couple of baselines before going into my trials:

  • $4.60 was the “high”, Starbucks price
  • 50 cents was the cut-off point for k-cups

Those were my benchmarks. But how low could I get the cost and still enjoy what I was drinking?

I experimented with k-cups as high as 70 cents each (usually pretty good) to as low as 30 cents each (Walmart generic cups on sale, weren't as good). But I thought I could do much better, both in cost and taste.

By this time I had purchased a small grinder. I went to the store and bought a whole host of beans. I used the Keurig one-cup filter to brew them immediately after grinding.

Here's a list of where I bought my beans, the brand and blend, and the ultimate cost per cup of each from August 2106 to May 2017:

  • Walmart — Starbucks Breakfast Blend — $0.272 per cup
  • Walmart — Starbucks Espresso Roast — $0.220 per cup
  • Walmart — Boyer's Medium Roast — $0.249 per cup
  • Walmart — Dunkin' Donuts Original Blend — $0.289 per cup
  • King Soopers — Starbucks Cafe Verona — $0.237 per cup
  • King Soopers — Starbucks Italian Roast — $0.214 per cup
  • King Soopers — Starbucks French Roast — $0.227 per cup
  • King Soopers — Starbucks Veranda Blend Blonde — $0.230 per cup
  • King Soopers — Starbucks Pike Place Roast — $0.200 per cup
  • Starbucks.com — Starbucks Christmas Blend Vintage — $0.239 per cup
  • Starbucks.com — Starbucks Christmas Blend Espresso — $0.217 per cup
  • Starbucks.com — Starbucks Holiday Blend — $0.239 per cup
  • Starbucks.com — Starbucks Christmas Blend Decaf — $0.262 per cup
  • Costco — Kirkland Espresso Blend — $0.134 per cup
  • Costco — Kirkland Decaf — $0.142 per cup
  • Costco — Kirkland Espresso Blend (again) — $0.133 per cup

I warned you that I had a lot of time on my hands!

Most of my coffee was purchased on some sort of deal/sale/coupon. I hardly ever paid full retail price except at the beginning when I simply wanted to try a bunch of options.

Three Stages of Coffee

Good to the Last Drop

Through this process I discovered:

  • Buying on sale/at a discount can make a big price impact. I don't know why anyone would pay full retail when coffee deals seem like a dime a dozen. And getting even a decent deal can shave several cents off the price of a cup.
  • Making your own coffee can be much cheaper than a k-cup. A lot cheaper. Like at least half the price.
  • Fresh-ground coffee seemed to taste better. You might not be able to notice a difference, but when I compared k-cups to pre-ground to freshly ground, the latter tasted best to me.
  • The Kirkland Espresso Blend ended up winning on both taste and cost. Yet another reason to be thankful for Costco.

As a result, Kirkland has been my go-to coffee ever since I stopped tracking my results. Coffee for 13.3 cents per cup versus $4.60 for the same or better taste was a no-brainer. Yes, I realize the Starbucks venti is larger. That said, I could have 34 cups of the Costco for the same price as one venti latte!

A nice perk is that I can make my favorite coffee at home. It tastes great, I've saved a ton of money, and I don't have to go out at 5:30 am for the cup of coffee I prefer.

After completing my quest for the best cheap coffee, I feel like my latte factor is well under control. David Bach would be so proud.

Maxwell House -- good to the last drop!

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Andrew
Andrew
1 year ago

You ought to try the Nespresso too while you’re at it. Actually applies high enough pressure to the grounds for espresso instead of brewed (filtered) coffee. More expensive? Yes, but completely different product.

If you want foamy milk like from a steam wand, you can use a French press to foam it (see tutorial on YouTube).

Voila, you have a proper espresso latte, very cheap.

Frogdancer Jones
Frogdancer Jones
1 year ago

Now you’re talking! Melbourne prides itself on its coffee culture and we live on the stuff! Last year I bought an Aeropress – changed my life. It only cost $60, it uses paper filters, (it comes with a year’s supply, but we wash them so they’re going to last us FOREVER), and best of all – you simply push the coffee grounds out into the bin. Or in my case, into a bowl. I add them to the garden to add nitrogen to the soil. Then you rinse the parts of the Aeropress and you’re done. Cleanest, easiest way to… Read more »

ESI Money
ESI Money
1 year ago

Haha! Nice!

Since I wrote this, I’ve also experimented with cold brewing a bit and I think I can make the beans stretch even more. I experimented with all sorts of beans-to-water ratios to see how I liked them and I’m even lower than above. 🙂

the74
the74
1 year ago

I’m also Aeropress user. I had a pump type espresso machine once but Aeropress is the winner. I think a fine grounded coffee is cheaper and thicker taste than k-cup. I’ll count how many cups available from 1lb coffee.

Steve
Steve
1 year ago

I assume the 13.3 cents doesn’t count the milk? Milk probably costs about the same again (3 bucks for a gallon * 6 ounces / 128 ounces). A more apt comparison at $tarbucks would be a cafe misto, which I believe is half coffee half milk. That doesn’t cost $4.60. (So maybe insead of 34x the price, it’s more like 10x the price? assuming my hypothetical cafe misto is $2.49 or so.)

Dave @ Accidental FIRE
Dave @ Accidental FIRE
1 year ago

First off WELCOME to the club, better late than never!

My $19 Mr. Coffee drip model that I bought at Target is well over 12 years old and still kicking fine. It also has a timer.

You should also try the AeroPress. They’re super cheap and super simple. And they travel well, no power needed.

Lastly, I also buy the Kirkland stuff when Amazon puts it on sale, it’s actually very good!

Lizzy
Lizzy
1 year ago

I used to have a Phillips Senseo, which made great coffee by the cup. You used a round pod which was rather like a tea bag. When finished, I added it to the compost. The machine had enough pressure to produce a crema, and the coffee tasted really good. Unfortunately, they stopped making them.

Joe
Joe
1 year ago

I find that buying whole bean makes the biggest difference. We use a French press and it works out pretty well. I also tried cold brew. It’s good, but not better or worse than hot brew. It’s just different.

Have you tried pour over and Aeropress? Those processes sound like they make good coffee. I want to try the Aeropress at some point.

ESI Money
ESI Money
1 year ago
Reply to  Joe

I have done pour over and I really can’t taste the difference. I’m sure most of it’s because 1) my tastebuds aren’t that refined and 2) I have NO IDEA what I’m doing process-wise. 🙂

Marc Burke
Marc Burke
1 year ago

Well I’m something of a coffee snob. I have a $600 Breville machine… and I have to have fresh beans for it even to work properly (i.e. less than a month old) but I still reckcon I’m saving money on Starbucks… it works out maybe a dollar a cup. The machine was an outlay (but it was a Christmas gift) and at a cup a day, that will be offset in less than a year, assuming the damn thing doesn’t break down. Then it comes down to just the coffee. I get it shipped to me within 3 days of… Read more »

ESI Money
ESI Money
1 year ago
Reply to  Marc Burke

What? You don’t roast your own beans????? 😉

Brian
Brian
1 year ago
Reply to  ESI Money

I roast my own beans. You can order green beans in bulk over the internet sourced from some of the best farms around the world and on a per pound basis it is about $5.50 if you buy several pounds at a time. And this is seriously good coffee. The shelf life of unroasted beans is actually quite long if you keep in a cool, dry, dark place. Then just roast what you need in a cheapo air popper and it’s crazy fresh.

Danielle Ogilve
Danielle Ogilve
1 year ago

It is insane how much I spent on coffee in my lifetime. This is incredible!

J.D. Roth
Admin
1 year ago

I meant to add my own coffee comments yesterday when this went live but…I forgot. Like ESI, I am a recent convert to coffee. For a long time, I hated both coffee and beer. The seed of this hatred was planted during my Mormon youth, when both beverages were forbidden. In college, I tried both and hated them. (My college girlfriend once tricked me into drinking a cup of coffee. She thought it was hilarious. I thought it sucked.) About six-and-a-half years ago, when Kim and I started dating, she convinced me to start tasting beer whenever she had one.… Read more »

Jen
Jen
1 year ago
Reply to  J.D. Roth

So interesting….I also grew up Mormon and I’ve never fully embraced coffee or beer. Like you, I take sips of my friends’ beers and I’ve never found one I liked well enough to pay for. I will drink coffee with milk, but it isn’t my go-to drink. I’ve actually been trying to drink coffee since it has less sugar than my daily chai latte or other caffeine sources. My reluctance towards both drinks definitely makes me feel like a horrible Portlander at times.

olga
olga
1 year ago

Coffee, black, strong. Not sure about roast timing, but I buy beans, grind, brew. Love visiting coffee shops when traveling, and buying fancy coffee to try. At home stick to Ruta Maya or Lavazza coffee beans, and never go out for the “latte factor”. Why spend money? I love my coffee in 6 oz hand-made (by a friend) clay cup, freshly brewed. Espresso at the coffee shops is too strong/too little, Americano is too dilute/too much. Besides, Starbucks beans are really burnt and don’t taste good at all!!! p.s. I think at some point I roughly calculated my 2-a-day (sometimes… Read more »

Luke
Luke
1 year ago

This was a fun read. Thanks!

Jon
Jon
1 year ago

Side benefit of other methods vs k-cup is there’s a lot less waste (part of reason it costs less I suppose). I thought I was going well at 0.229 per k-cup! You’ve inspired me to go back to pour-over with some store-ground beans.

dh
dh
1 year ago

Only green tea.

Military Family Finance
Military Family Finance
1 year ago

We are in the middle of an international move, and have been using the Aero Press. Works great. I’m a fan of great coffee (and flat whites…) but Starbucks is even more expensive here than in the States, so I’m trying to kick that habit. The local “kopi” is $1, so I’m trying to start liking that!

Adam
Adam
1 year ago

I miss coffee. Caffeine and I were best buds for twenty years, from when I was eight to maybe ten years ago… and then I realized I function much better without it in my system. Every couple of months I’ll have a drink from the fancy gourmet single-origin hipster coffee roastery down the street, and I’ll savor every drop, and then I’ll desperately hope the resultant 48-hour migraine doesn’t flatten me (spoiler: it does).

Can highly recommend a pourover using beans roasted & ground on the same day. Fancy gourmet single-origin hipster coffee roastery knows what they’re doing.

KLE
KLE
1 year ago

I came late to coffee via a decadent latte breve (made with half and half rather than milk!) and eventually got to lattes made with skim milk. Still, I didn’t like the extra calories, sugar, and cost of office runs to “The Buck”. I finally concluded coffee was giving me stomach aches and caffeine crashes anyway. I am much happier with black tea with milk, the British way. Ordering bulk tea (PG Tips) online, I’m at about a nickel a cup, plus a splash of milk… Easy to make while traveling if you can get good boiled water, unfortunately many… Read more »

Laura
Laura
1 year ago

I am split on coffee. It is an affordable luxury and I fit it into my budget by rarely eating out. I dink a cup or two of coffee each day. The first cup I bring from home using a drip coffee machine which ends up costing very little. If I need an afternoon pick me up I buy a coffee and savour it!

Great point about coffee being on sale – we always buy it on sale, the sales happen frequenlty enough for us to never pay full price.

John
John
1 year ago

The aeropress is great but it does ‘consume’ more beans than other methods. If cost is a consideration, it is not as economical as a pour over. I love coffee… I use all of the following (in order of how often they are used): 1) pour over 2) espresso (manual Saeco machine purchased second hand… going strong after 10 years) 3) cold brew (summer only, also consumes more beans than other methods) 4) chemex (similar to pour over but different taste… a bit ‘cleaner’ french press 5) aeropress (great for camping) 6) french press Each of these has a ‘process’… Read more »

Danielle Ogilve
Danielle Ogilve
1 year ago

I wish I did this for myself as well! Seems like it’s a fun experiment. Actually, come to think of it. I probably should do it for myself!

zzzzzz
zzzzzz
1 year ago

You only looked at the coffee half of your drinks!!

What about the milk? How much does that cost? Have you tried different options for milk to minimize that cost, or maximize the tasted, or optimize the cost/taste balance? For example, how about canned milk or powdered milk? Those will probably cost you less per cup than fresh milk, is there a taste tradeoff? If so, is the cost savings worth the taste tradeoff?

Or if you decide fresh milk tastes better, how about regular vs organic? Or perhaps acidophilus, which some people say tastes sweeter than regular milk?

Mid America Mom
Mid America Mom
1 year ago

Fun exercise! Let’s see. Years back we realized it was much cheaper for my husband, coffee everyday!, to make plain black coffee at home. Started using the existing drip machine with a cheap grinder (30) for whole bean in 2006. He was not sold on french press (25). Bought a barely used grind and brew with a thermal pot (45) and moved on after 5 years. Now a chemex pour over (40). A few years back we bought a lower end comical burr grinder (85) and he loves it. Our teenager has started to make her own before school so… Read more »

george@dontpayfull.com
1 year ago

For the best coffee, we always use freshly ground beans. They are full of flavors and aroma and thus make a great cup that will have you alert in the morning and help you push through the day.

S.G.
S.G.
1 year ago

You are all crazy. I have not ever understood coffee, such a ritual and it’s just horrible. Especially you that came to it late, you DEVELOPED a taste for it? I’m dumbfounded. As I have gotten older my disgust of coffee has just gotten more acute. Of course I’m mostly speaking tongue in cheek. But in truth I have never understood the appeal on any level. Some things are “I don’t like it, but I can appreciate how someone would.” Coffee isnt that for me. It’s like water through burnt dirt. In fact worse. If you offered me coffee or… Read more »

dh
dh
1 year ago
Reply to  S.G.

Plus it seems to make a lot of people jittery, unhinged, and even a little nauseous. And just wait and see what happens when you try to quit it!! Your headaches will be legendary, and you will see a pink elephant….

Now, *green tea* is one the healthiest beverages on the planet — and so much milder than coffee, yet still provides a little good-morning “kick.”

KLE
KLE
1 year ago
Reply to  dh

S.G. and dh – you both crack me up! Am I correct to remember from previous comments you are both in NM? I’m in Albuquerque myself.

dh
dh
1 year ago
Reply to  KLE

Yes, we’re both from NM. I think S.G. lives somewhere other than Abq (and I hear she’s very tall), but I’m squarely here in the NE Heights. However, I’d like to move to Nob Hill (Abq, not San Francisco) for the walkability factor, just can’t find someplace cheap enough. Seriously, what an insanely over-priced neighborhood! I was recently talking to the builder of both One Ten Richmond and The Carlisle, explaining to him how Nob Hill is *not* South Beach in Miami lol. Anyway, I do like it that someone could theoretically live car-free down there, just ask Don Schrader.… Read more »

S.G.
S.G.
1 year ago
Reply to  dh

Lies! I disavow all knowledge of this country “New Mexico”. I challenge you to find such a country on the map.

And whomever this person is you have pictures of and describe as “tall” bears no resemblance to me whatsoever.

It sounds to me like you guys are just high on coffee. Not only is it gross it apparently makes you hallucinate.

KLE
KLE
1 year ago
Reply to  dh

Ah, the Heights -aka The Frights/the Whites… Nice access to the foothills, eh? I’m in the Nob Hill of which you speak and the walkability is one of my favorite parts. The sirens down Central can be kinda loud at times… and the price/square foot is rather high…

S.G. – neither dh nor I drink coffee, so it can’t be that… and we all know NM is a state as of 1912! You know what the old timers liked to say – “I didn’t move across the boarder, the boarder moved across me.”

dh
dh
1 year ago
Reply to  KLE

Hey KLE — lmao!!! I never heard “the frights/the whites.” I always thought that kind of sentiment was more reserved for the West Side fraidy-cats who live in places like Ventana Ranch, scared of any kind of neighborhood that is even remotely “urban.” I do have nice access to the foothills, but I’d rather have nice access to Scalo, Two Fools, Frontier, and Guild Cinema. I used to live in Nob Hill back in the late 90s — but as a renter. Now that I want to buy a place, I’m shocked at what real estate costs down there. Of… Read more »

S.G.
S.G.
1 year ago
Reply to  dh

Don’t have a view, be the view: try the EM.

dh
dh
1 year ago
Reply to  dh

The East Mountains are beautiful for sure, S.G. However, they aren’t very walkable — unless we’re talking about hiking trails and such. What’s nice about a place like Nob Hill (or EDo) is a person could really minimize car use — or even avoid it all together, as all the “big-city” amenities would be right at one’s fingertips. I think I would feel isolated in the East Mountains. I mean, you have your family and everything there with you, but I’m on my own.

dh
dh
1 year ago
Reply to  S.G.

No coffee, just snorting matcha, S.G.

L.M.G.
L.M.G.
1 year ago

K-cups are coffee with no soul. They are the worst invention ever, for so many reasons – financial, environmental, and for spreading bad coffee throughout the world. Just make coffee in a machine!! It’s okay if you make more than one cup – someone will drink it.

S.G.
S.G.
1 year ago
Reply to  L.M.G.

Drinking something with soul sounds evil. You might want to reconsider your life choices.

El Nerdo
El Nerdo
1 year ago

if you’re going to drink with milk, instant coffee works fine for a nickel a cup.

if you want to drink black it’s another story.

but with milk? save your money and buy taster’s choice or nescafé, which come in a number of varieties.

Bernz JP @Moneylogue.com
Bernz JP @Moneylogue.com
1 year ago

JD – did not know that you’re one coffee lover yourself although I think my wife beats you in almost all angles. She has a coffee maker, a Keurig and she also goes to nearly all the stores you mentioned here. Not sure if you’ve tried buying your K-cups from TJ Maxx, but yes she goes there too. She also buys her coffee at Dunkin for $0.99 (They do have a coffee special every day from 3-6 pm). I’m now seriously considering giving her an $800 Nespresso machine so she can make her coffee at home. Will this Nespresso machine… Read more »

Millionaire Dojo
Millionaire Dojo
1 year ago

We don’t use a Keurig. Seems like it’s way cheaper to buy a big tin of ground coffee than it is to buy k cups.

Janette
Janette
1 year ago

Coffee, my daughter in law’s only vice. We think she is amazing. We keep her Starbucks gift card filled for her weekly coffe with their three littles. They brew their own at home,but this is our long distance treat.

Max
Max
1 year ago

I love a good coffee post. Especially one that emphasizes frugality + taste. My favorite right now is using an aeropress with dark roast beans (ideally freshly ground using a hand burr grinder). I’ve been traveling a bunch recently and manage to fit this in my bag. Cost about $75 for initial purchase, but saves a bit with each cup. Plus, it appeals to my inner coffee snob and that’s all I really need 🙂

Clint
Clint
1 year ago

This is good to hear as I just purchased a large bag of costco beans for $9.99 the other day.

I have yet to dig into them but now you have me excited:)

sendaiben
sendaiben
1 year ago

Aeropress and Kirkland Espresso Beans for me. Been doing it for almost ten years now, at home and at work. Nothing beats it 🙂

Hernan
Hernan
1 year ago

Coffee is the bomb! I have been drinking it for ages. I had to choose between coffee and Coca Cola because of my health. It was easy! I chose coffee. Now, I need to start buying the beans and roasting them. Is it hard to roast them? For how long do you roast them? Thanks for a great article. I forgot something. I am not crazy about the Keurig. The coffee seems cheap.

J.C.D.
J.C.D.
1 year ago

Did not realize this would happen, but have not had a decent cup of coffee (esp my own!) since returning to the U.S. from vacationing in Portugal last month.

Any ideas as to the make & type of coffee makers (espresso?) predominantly used there? Brazilian beans may have been used in some cases, but probably not exclusively.

In all the cities/towns visited (in the western part of the country, the coffee was universally excellent & not bitter.

Thx!

Van
Van
1 year ago

I won’t say I’ve *never* bought an overpriced latte, but in general I’ve always found the idea of a $4 coffee somewhat abhorrent and choose to not indulge. For homemade coffee, I always swear by using a stovetop coffee maker gives the best result, but generally I’m not *that* fussy (fussy is an expensive habit) and would happily drink instant.

Jay
Jay
1 year ago

Please update this post with the cost of milk included. While it will obviously still be much cheaper than the venti starbucks latte, it’s appreciably more expensive than ~13 cents per cup given how much milk you’re using. Thanks!

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