Otago University student Ashley Faulkner used to be bad with money – until she had to survive as a student. Now she’s The Queen of Living Well for Less. She explains her biggest hurdle to saving and how she overcame it:

Coffee is my biggest downfall when it comes to spending. I just can’t do without it.

When you’re at the library on a cold, cloudy morning in Dunedin, the best thing to cure that Monday-itis is a lovely, warm flat white.

But, buying coffee out is soooo expensive, when you add it all up.

It costs $1,825 a year

Five dollars every day for a coffee doesn’t sound much at the time, but when you add it all up, that’s $150 a month, pretty much the price of our power bill. Or worse still, $1,825 a year.

Most cafés in the Dunedin student area have a zero-waste policy, meaning you have to bring your own take-away cup. This turned out to be a good thing, because I’ve found that keep cups are awesome and reduce waste.

On top of that, you can often get a little extra discount for using them.

But we needed to save more. So, to cut our coffee bills, my five flatmates and I decided to invest in a coffee machine.

A machine changed our lives

We found a coffee machine on sale for $200, down from $400. When we split the cost among the six of us, it was only around $33 each. That’s only a week’s worth of café-bought coffee.

Suddenly we had unlimited amounts of coffee whenever we wanted it.

Buying a bag of coffee grounds from the supermarket is only $5, and a bag lasts me around two weeks.

Now we get to enjoy café-style coffee, which we can take to our classes or the library instead of being tempted to spend all our spare change.

This saves just that extra bit per week which we can put towards doing things for ourselves like shopping, going on trips, or saving!

Editor’s note:

If, instead of spending that $1825 on coffees, Ashley invested it and each year added savings of another $1825 into a managed fund getting 5 per cent return in a ‘balanced’ fund, the money would have grown after 10 years to $19,207. Of that amount, compound interest is $9,283.

That total is inflation-adjusted and worked out on the Te Ara Ahunga Ora Retirement Commission website, www.Sorted.org.nz.

The cost of a keep cup and coffee grounds are not included.

Note that investment returns vary, and you should invest according to your own timeframe and risk level.