Cutting back on your coffee for 20 years could buy you a brand new Range Rover

It’s not news that grabbing a coffee in the morning costs. But think about it this way – would you rather have a daily coffee or a brand new car?

Of course, coffee isn’t the only thing people are told to cut back on or make at home – with shop-bought sandwiches frequently brought up too – and that’s before we get to "sin" purchases like cigarettes and alcohol.

So rather than look into the daily savings, experts at investment firm Fidelity International decided to find out what would happen had you saved the cash instead.

The results are sobering. In fact, you could be missing out on tens of thousands of pounds.

What you’re missing out on

So, what happens if you save the cash instead of spending it?

Well, assuming you spend £2.50 on a coffee on the way to work, and put the money in a stocks and shares ISA, you could generate up to £3,307.61 after five years, £7,303.68 after ten years, £12,131.51 after 15 years and a whopping £17,964.25 after 20 years.

Moving on to lunches, if you swapped spending £5 a day on lunch at work and put that money into the ISA instead, you’d have £6,615.22 after five years, £14,607.35 after ten, £24,263.03 after 15 years and £35,928.50 after 20 – that’s more than a new Ranger Rover Evoque.

Smokers get an even bigger savings pot. Someone buying a pack of 20 every two days can save £9,922.83 over five years by investing the cash instead, rising to £21,911.03 over ten years, £36,394.54 over 15 and £53,892.75 over 20 years.

Add it all up and you have a whopping £107,785.50 at the end of it. That’s enough for a holiday home in Cornwall.

And you don’t even need to give things up

Of course, a joyless life of never buying a coffee and getting up earlier to make a sandwich every day while chewing nicotine gum isn’t the dream.

But it’s also not the point.

The lesson here is less about how bad you’re being wasting money, and more about the power of saving small amounts regularly.

Emma-Lou Montgomery, associate director for personal investing at Fidelity International, said: “We all are guilty of frittering away money without realising we’re doing it, whether it is on coffees or even Uber journeys.

"It is important to stop and think about what you are spending your money on, and identifying where you could make small changes to save some cash.

" Many investors struggle to find a lump sum to get their ISA portfolio started; but in fact the money is right in front of you."

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