Buying Less Kombucha is not a ViableWealth Building Strategy

“If I just buy less kombucha, I’d probably save a lot more money.”

I said this to my partner a few years ago when I was feeling bad about how much money I was spending. My monthly spending would often exceed my income and, with no tools in place to understand my spending habits or money allocation, I blamed my negative cash flow on my kombucha habit.

If you’ve ever looked at your bank account and thought, “ugh, I really shouldn’t have bought that coffee this week” or “maybe I didn’t need that new dress,” then this post is for you.

Here’s the thing I’ve learned (thanks to my very patient partner, many podcasts, and a few years of experience): it’s not that you won’t save money by buying less kombucha (kombucha is ~$4: if I buy it four times a week that adds up to almost $800 a year, which to me is a significant amount of money). However, if your goal is to actually create more money, the kombucha question is really the wrong question (again, not a BAD question, just not the BEST question).

Instead of asking, “why am I spending so much on kombucha?” try asking, “how much am I investing in the stock market each month?”

At the time of the above conversation, the only investing I did was through my 403(b) at work (this is still really awesome and I’m glad I started that super early, even before I really understood what investing meant). Some months I would save money (it went into my savings account making .05% interest aka basically nothing), but most months I would spend what I had left over after major expenses got paid.

Today, I treat investing as one of my major expenses. My investment account (through Betterment) gets paid automatically on the same day as my rent, gas, electric, and credit card bills. It is non-negotiable. When I first opened my Betterment account, I’d put money in wherever I could; a little here, a little there. Over time, I started auto-investing $100 a month. Two years later and now I invest $600 on the first of every single month without fail.

Let’s say you open a Betterment account with $100 in it to start and over time commit to putting in $600 a month (I recognize this may not be financially viable for you at this time; I’m using my own example here — I also started out “ahead”: no loans, no debt, and a few thousand dollars in the bank that I had been gifted out of college). Using an average annual return of 7% (this is not guaranteed, but is based on historical averages), you could expect to have over $43,000 because of compound interest at the end of five years (and imagine what that money could do over ten or fifteen years).

Over that same five years, if all you did was eliminate $4 kombucha from your spending, you could expect to save ~$4000. Again, not an insignificant amount of money! But I’d much rather focus on figuring out how to generate $43,000 than save $4,000, wouldn’t you?

I’m not saying you should be reckless with buying the drinks or dresses you like, but I am saying that financial issues are not often solved by holding back on relatively small, insignificant purchases or blaming your financial problems on these smaller decisions. This is actually something that we do systemically to women — we tell them that if they just spent a little less on clothing or shoes or makeup or [insert anything stereotypically feminine], they’d have more money. That shit is sexist!

The stock market is not perfect. Capitalism kinda sucks in a lot of ways. But men are investing at way higher rates than women (women invest 40% less than men). Until we figure out a better system, women shouldn’t miss out on these gains simply because we’re scared or systemically haven’t been educated on how money works. I’m making some broad generalizations here (though they are backed by data), but I’m trying to look at overall trends. Certainly there are lots of women investing and certainly there are lots of men who don’t understand the stock market. But systemically, we’re seeing men invest at much higher rates than women.

When men seek out financial advice, do you think they’re told to buy less kombucha, dresses, or shoes? Probably not. So let’s stop telling that to women and start telling them about the stock market.