This is Wrong: “Cut Back On Coffee To Save Money”

Justin drinking coffee.

Yesterday, I was talking with a coworker, Justin, who was musing about how he goes to the corner coffee shop each afternoon to get a fix. And it hit me – I’ve heard “if you just avoid buying coffee each day, you’ll save millions of dollars” countless times.  That’s wrong (and annoying).

Beyond being a bit too preachy for me, it’s wrong because buying coffee, like most other things we buy, isn’t usually a conscious choice.  We aren’t making a cost/benefit decision, and so “millions of dollars saved” is irrelevant.   

Here’s the logic (see the footnotes for all the behavioral science behind it):

1)   Buying coffee probably isn’t the most cost-effective use of our time anyway. 
And neither is anything else we do.

When you’re ready to take a little break at work, do you stop and think about the all of the possible things you could possibly do, the effort you’ll have to expend, the probability-weighted distribution of rewards, etc.? No, usually you don’t.[1]   You don’t take out the calculator to decide if you want coffee.

2)   Instead, we’re on autopilot for most of our small daily decisions,[2] including the stuff we buy.

That autopilot is driven by our gut reactions.  We might think a little, but we quickly find something good enough, and move on.[3]    Our intuitive minds just think: “Hmm coffee sounds good. Done.”

3)   Our “autopilot for buying stuff” likes things that are vivid, pleasant, and related to the other things we’re thinking about.

We’re likely to act on the first thing that comes to mind – things that are easy to remember and subtly “feel right” to us.[4]  Things that we’ve associated with “good things” in the past also feel right intuitively, even without our consciously thinking about whether we liked them or not.[5]    

So, telling someone that not buying coffee will save them oodles of money is likely not going to be effective.  Buying coffee is vivid, pleasant, and intuitive.  It can also be a “habit” in the strict trigger-routine-reward sense, though in this case Justin didn’t have a real “habit” of buying coffee on the corner (habits are a huge and fascinating topic; I’ll discuss them in a later post).[6]  

Our conscious minds can override our autopilot with sustained attention. But, that takes work, it can’t be easily maintained over-time, and isn’t fun.  Instead, to change behavior (if you wanted to spend less on coffee), look to the source of the behavior.  Can you crowd out the vivid recall of coffee-buying with something else? Can you find something that’s more pleasant to fill the break times at work?  Can you make it difficult for the autopilot to act, without requiring sustained attention (like leaving the coffee-shop loyalty card you love at home)?   

Lots more to think about in future posts.   For now, what do you think?




[1] We don’t do this for many reasons. One of the major reasons is that our “implicit cognitive system”, aka our intuitions or gut reactions, tell us enough is enough.   Damasio (1994) has shown that people with brain damage that lack those intuitions actually DO endlessly consider costs and benefits. Yeah, cost/benefit analysis in daily life can be a product of brain damage!

[2] See Kahneman (2011) for a detailed and very thoughtful look at this “autopilot”, or implicit system.  I referenced the related body of theory called Dual Process Theory in an earlier blog post.

[3] Otherwise known as satisficing = taking the first option that is “good enough”. This is Simon (1982)’s critique of the common assumption in economics that we optimize for the best possible outcome.

[4] Aka, cognitive ease or “fluency” makes things feel true and good.  See Kahneman (2011, p60) for a concise summary of that literature.  

[5] This is one part of Slovic (2007)’s affect heuristic. Also, “related to the other things we’re thinking about” refers to priming and framing effects.

[6] In this case it also wasn’t an issue of coffee quality – since he can get the exact same coffee by using packet from that coffee shop in our machine.