Can we stop talking about coffee?
Spending on coffee and avocado toast is not the source of our financial health challenges
As the founder of Innovate Financial Health (IFH), an organization looking to help create and scale products and services that serve financially vulnerable Canadians, I’m often talking to people about the personal finances of Canadians. According to a recent Canadian Payroll Association survey of 5,000 Canadians, 44% of Canadians would find it difficult to meet their financial obligations if their paycheque was delayed by even a single week and 40% feel overwhelmed by their level of debt. There are millions of Canadians that are financially vulnerable and struggling to reduce their debt, to pay their bills, to build emergency funds, and to save for the long-term.
The financial health of Canadians is a big and complex problem — one that needs to be tackled with a combination of technology, innovation, advocacy, and public policy.
Every so often, however, I come across someone (typically wealthy and/or in a position of power) that tries to simplify the issue. They reframe the challenge into one where people lack financial diligence and spend too much money on coffee, brunch, and avocado toast. Inevitably, they will start speaking about how they previously didn’t or currently don’t spend on these items, seemingly insinuating that that’s the reason for their relative financial success.
Online, you’ll see this type of advice often — from personal finance bloggers, self-proclaimed “financial gurus”, and even the New York Times. Just recently, the Twitterverse has been sharing Suze Orman’s CNBC comments “I wouldn’t buy a cup of coffee anywhere, ever — and I can afford it — because I would not insult myself by wasting money that way” and her advice to think of buying coffee as “ peeing $1 million down the drain.”
The challenge with this type of advice is not that it’s necessarily wrong — it’s true, the less money you spend on coffee and lunches today, the more money you’ll have in the future.
The challenge is that it’s lazy and simplistic yet too often dominates the conversation. Advice like this feeds into the common but disproven narrative that those who are financially struggling just don’t know enough and aren’t trying hard enough — that the poor are frivolous and the rich are not. By framing financial health in this way, it is easy to put the onus of responsibility on individuals while conveniently ignoring the true reasons why people are financially vulnerable — systemic wealth inequality, rising income volatility, and the fraying social safety net.
Wages have been stagnant for the majority of Americans for decades. The rise of the gig economy and non-standard work means more people dealing with reduced access to benefits and significant income variability. Corporate trends like just-in-time scheduling and the move away from defined benefit plans have made it increasingly difficult for employees to plan for both the short and long-term.
All of this is happening while companies are spending millions of dollars to figure out the best ways to extract as much value from consumers as possible — from increasingly targeted advertising to incorporating behavioral nudges to making payments as frictionless as possible.
So maybe it’s time we move away from comments like “I will never understand why people buy coffee,” to questions like:
- “How do we better design financial education so that it is more closely aligned with the true financial needs and choices of average Canadians?”
- “How do we protect consumers in a world increasingly devised to encourage us to spend more?”
- “How can we adapt the social safety net to the changing nature of work?”
- “How do we create more products and services that help people achieve financial stability and wellness?”
It’s time to change the conversation. Let’s stop talking about coffee. Instead, let’s talk about the reality of financial health and all the ways we can make our existing system work better for all of us.
