Most of us, confronted with daily forecasts of recession and economic downturn, have an emotional response that expresses itself in a range of behaviours. Big purchases may be deferred or cancelled. Travel plans are revisited. We might review our childcare spend and wonder if we should go out less – all rational decisions in the face of the rising cost of living. Then there are the irrational gestures, those that have little meaning financially but offer us, via small acts of self-denial, an opportunity to feel we’re doing something morally rigorous. It’s these, in my case, that have lately been triggered.
For me, the barometer has always been coffee, a small but ineradicable source of guilt that has only grown as the price of a single flat white creeps up towards £4. Forgoing this small pleasure neither damages my day, nor, on the other hand, does anything significant towards improving my finances. Assuming a one-coffee-a-week spend, the choice to wait until I get home to make coffee will save me about £200 a year. And yet, each time I pass Caffè Nero and keep walking, I’m so proud of myself you would think I’d donated a kidney.
Some of this back-patting, I’m aware, is a long-range hangover from the time that Aussie real estate mogul accused millennials of not owning a home because they had spent all their money on avocado toast. And then there was Kevin O’Leary, a wealthy investor who appears on Shark Tank, the US version of Dragons’ Den, who said that he never bought a coffee from a cafe, a boast he made to admonish feckless non-millionaires frittering away their tiny salaries. Both men were being obnoxious while grasping at a partial truth. The fact is you can scrape the deposit for a house in a major city on a teacher’s salary – even, I’d suggest, in a downturn – but it’s not coffee or brunch you’ll have to give up: it’s everything.
I’ve seen this kind of person in action – the type of hyper-saver who can hit levels of self-deprivation most of us can’t. My late aunt was one. She raised three children on her own, never had a cent of help from anyone, and wound up owning a modest house with a yard, the mortgage for which – I still boggle at this – she paid off in 10 years flat on a bookkeeper’s salary. She did this by eating the proverbial beans, never going out, wearing clothes until they fell apart and espousing a hardline philosophy of self-denial. Long before the mortgage was paid off, it had stopped being about the money. Instead, the thrilling masochism of “doing without” became a kind of addiction, and her fanaticism was admirable and horrifying. It raised questions about what we’re here for, if not at least to allow ourselves a little enjoyment. O, reason not the need.
For most of us with more regular spending habits, the difficulty is in accurately assessing the gravity of a turndown, and therefore what scale of sacrifice to meet it with. Markets have rallied before and, unless we’re going to take our money out of the bank and invest it under the bed, we must assume they will rally again. Between 1929 and 1932, 90% was wiped off the value of Wall Street. Stocks in the US plunged 37% during the pandemic. By far the biggest crash in most of our lifetimes was in 2008, when the sub-prime mortgage collapse took 57% off the S&P 500 index – the main takeaway from which, apart from the obvious one about borrowing more than a certain multiple of our salaries, was that we should all have bought Microsoft then.
As the economic climate worsens and recession starts to take hold, it may be that at least some of our resolve to cut back is helped by the kind of vibe shift that disguises cost-cutting as aesthetic choice. The imposition of tariffs by the US on Europe and China is likely to send the cost of luxury brands in the US soaring, so that, as with the 2008 recession, logos and other examples of conspicuous spending will quietly fall out of fashion.
Anyway, I’ve done the maths – moral, emotional and actual – and on balance have decided that £200 a year is worth it for the small ping of happiness I get from buying a coffee. With a bit of reaching, I can even convince myself that it’s a shrewd investment relative to the potential cost of not buying coffee. We all have our version of this: you take the emotional capital from denying yourself something that costs £5 and use it to justify dropping £500. Let’s not be miserable. Buy the coffee.
Emma Brockes is a Guardian columnist
