Hat tip to Jessica for finding this resource which allows students to tweak variables to find out how much they can save through D-I-Y coffee. It also provides opportunities to discuss investing as one of the variables is "investment return." 

Here are the variables (the dark rectangles are calculated fields while the white rectangles are user-generated: 

For those students who don't drink coffee, they can identify something they might buy several times a week (e.g. snacks) and

1. Put in $0.01 for the bag (retail value) 
2. Input the cost of that item purchased in the cup (retail value)
3. Input number of times purchased per week in the cup(s)/week

I thought I would work through this using inputs that I derive from my own coffee drinking research. 

1. Find my favorite coffee: Peet's Coffee Major Dickason's Blend Deep Roast, Whole Bean (32 oz.) costs $25 on Amazon
2. A cup of coffee purchased at a coffee shop for me would be about $2.50; I never order specialty drinks
3. Drinking habits: 2 cups/day and assume I go 100% cups vs. purchasing specialty drinks
4. Investment return of 7% and inflation of 2.5% over 30 years. 

In case you were wondering...my savings in today's dollar amounted to....a piping hot $62,000. Making my own coffee saves me about 75% compared to purchasing at a store. Of course, that doesn't include my labor, but you know I'm multi-tasking while the coffee is brewing looking for that next Question of the Day:)

Questions for students:

• Using your own personal experience, either work through the simulation as a coffee drinker or choosing another item that you buy on a weekly basis. What did you choose?
• What did you assume for your investment return? What do you think will help you earn that return? savings account? CD? stocks? bonds? 
• Research inflation rates over the past 70 years and then come up with your projection for inflation in the simulation? 
• What were your total savings? savings in today's dollars? Explain the difference between these two numbers. 
• Will this impact how you think about that regular purchase that you are currently making? Explain. 

----------------------

Check out our Interactive Library and our Arcade for more engaging interactives and games. 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

More posts by Tim