How to use the cost of a habit calculator
- Pick an example habit or choose Custom.
- Enter the cost each time and how often: per day, week or month.
- Choose the number of years and how fast this habit's price rises each year.
- Set the return the money could earn if invested.
- Read the monthly and yearly spend, the total over the years and the invested value, with the 10, 20 and 30 year table.
How it is worked out
Monthly spend = cost each time × times × periods in a month
- A month has 30.42 days and 4.33 weeks on average (365 ÷ 12 and 52 ÷ 12).
- The spend rises once a year by the habit's price rise. The total spent adds up every month of every year.
- The invested value is a monthly SIP of the same amount, at the start of each month, compounded monthly, stepped up each year by the price rise.
Example: tea or coffee at ₹40, 2 times a day, is ₹80 a day, about ₹2,433 a month. Over 20 years, with the price rising 6% a year, that is ₹10,74,139 spent. Invested at 12% a year, the same money would be about ₹35,84,729.
Daily spends over 10, 20 and 30 years
| Daily spend | Spent in 10 yrs | Invested, 10 yrs | Spent in 20 yrs | Invested, 20 yrs | Spent in 30 yrs | Invested, 30 yrs |
|---|---|---|---|---|---|---|
| ₹50 | ₹2.41 L | ₹4.4 L | ₹6.71 L | ₹22.4 L | ₹14.43 L | ₹88.06 L |
| ₹100 | ₹4.81 L | ₹8.8 L | ₹13.43 L | ₹44.81 L | ₹28.86 L | ₹1.76 Cr |
| ₹200 | ₹9.62 L | ₹17.6 L | ₹26.85 L | ₹89.62 L | ₹57.71 L | ₹3.52 Cr |
| ₹500 | ₹24.05 L | ₹44.01 L | ₹67.13 L | ₹2.24 Cr | ₹1.44 Cr | ₹8.81 Cr |
Prices rising 6% a year and the invested amount earning 12% a year, with the SIP stepped up by the same 6%.
Why small amounts grow
Two things work together. The spend itself keeps rising with prices, so the total over many years is larger than today's yearly spend times the number of years. And money invested earns returns on its past returns. ₹100 a day for 10 years grows to about ₹8.8 L at 12%; over 20 years it is about ₹44.81 L, because the second decade adds returns on a much larger balance.
| Return | Spent in 20 yrs | Growth | Worth |
|---|---|---|---|
| 0% (kept as cash) | ₹13.43 L | ₹0 | ₹13.43 L |
| 6% | ₹13.43 L | ₹9.74 L | ₹23.16 L |
| 8% | ₹13.43 L | ₹15.08 L | ₹28.5 L |
| 10% | ₹13.43 L | ₹22.09 L | ₹35.52 L |
| 12% | ₹13.43 L | ₹31.38 L | ₹44.81 L |
₹100 a day for 20 years, prices rising 6% a year. To plan a regular investment of your own, see the step-up SIP calculator.
Frequently asked questions
How much does a daily cup of tea or coffee cost in a year?
At ₹40 a cup, 2 cups a day is about ₹2,433 a month and ₹29,200 a year at today's price. Over 20 years, with the price rising 6% a year, it adds up to about ₹10.74 lakh.
What is the latte factor?
It is the idea that small, regular spends add up to large sums over many years, and grow larger still if the same money is invested. This calculator puts numbers on it for any habit; whether the habit is worth it is your call.
How much do cigarettes cost over 20 years?
At ₹20 a cigarette and 5 a day, with prices rising 8% a year, the spend over 20 years is about ₹16.7 lakh. Invested at 12% instead, the same money would be about ₹51.85 lakh. The figures leave out any health costs.
How much does food delivery cost in a year?
3 orders a week at ₹400 each is about ₹5,200 a month, or ₹62,400 a year. Include delivery and platform fees in the cost per order for a true figure.
How is the invested value worked out?
As a monthly SIP of the same amount you spend, invested at the start of each month and compounded monthly. The SIP rises each year by the habit's price rise, so the money invested always matches the money that would have been spent.
Is the invested value guaranteed?
No. The return is an assumption. Equity funds can return more or less than this in any year, and returns can be negative. Deposits are steadier but usually earn less. Try a lower return to see a cautious figure.