We’ve all heard it. “X could afford Y if they didn’t buy so much coffee.” Its regularly used as a reason why Millennials and subsequent generations can’t get on the property ladder without support from parents or grandparents, so much so that its is a meme demonstrating the cultural divide between generations. (You can choose to replace coffee with avocado toast if you want, it makes little difference.) Yet whilst the price of coffee is frankly ridiculous (the one I am drinking as I type this was over £4) there is truth in the idea that our social habits have an impact on our ability to buy other things.
Buying a coffee meets an immediate need. It doesn’t necessarily quench thirst (I’ve just drunk almost a litre of water, I’m not in any way thirsty) it fulfils other functions. My job means that I sometimes spend time on the road. Today, whilst I am not far from home, I am still out and about. I have been working in the co-working space at the Edinburgh Futures Institute (if you need somewhere to work in Edinburgh, do check it out) and am meeting a colleague later. Buying a coffee buys me a place to sit with a wall-socket and warmth, which is very much needed in Edinburgh in February. I can sit here and write, safe in the knowledge that I am not going to get moved on in the immediate future. Some places don’t like people working. That’s ok, they’re allowed to set their own rules. In such a place, if I was there on my own, I would have whatever book I happen to be reading at the moment open.
Coffee shops fill a vital social function in British society. Around me people are meeting friends and colleagues. Across from me a business meeting is taking place. A group of school age children is clustered in the door. A lady of retirement age is having a deep conversation with another who could well be her mother based on her appearance. In an age where we move around a lot more than we once did, coffee shops provide us with an important meeting place where we can connect with one another. An intermediate point between respective home-bases were we can meet in reasonably comfortable familiar surroundings, without feeling the need to have to buy a full meal at the wrong time of day, or drink alcohol.
Suggesting that millennials and subsequent generations might be better off if they didn’t drink coffee fails to recognise that drinking coffee does make them better off, just not financially. Providing social spaces, coffee shops are a lifeline. They allow people to connect. Whilst there was a push post-Covid to have people back into in offices, in reality many jobs have become hybrid, particularly in the financial sector. I once enjoyed chatting to colleagues as I made a cup of instant coffee. Not quite chatting around the water-cooler, but not far removed. If we have limited opportunities to have those water-cooler / instant coffee conversations, then coffee shops provide an opportunity to have those conversations, without the need to invite a colleague into your own home.
But this comes with a cost. If you’re having a coffee every weekday at £4, that’s just over £1,000 a year. The problem is it’s rarely just one. Sometimes its two. There was one point when I was working in an office where I would have one on my way to work and another on my way home. Not every day, but often. Sometimes I would go out at lunchtime with a colleague and have another. Maybe one day you’ll have an overpriced croissant or cheese and tomato panini. Soon that £1000 a year coffee habit has doubled or tripled. And heaven forbid your regular coffee order is something fancy.
£1,000 a year isn’t going to get you a deposit to buy you a house. Maybe a few years of cutting out £2,000 worth of coffee will help, but it’s unlikely to be the key differential between being able to get a house or a mortgage and being stuck with parents or in rented accommodation. It might help you save in other ways though. If you choose to cut out coffee then you might also choose to prepare your own lunch rather than buying something from the local deli. These things do make a difference in the round but individually they make little difference.
Intergenerational Myopia
As I have already mentioned, this is not an attempt to argue that millennials, Gen Z etc should spend less on coffee. Over the last 40 years house prices have risen dramatically, no doubt in part fuelled by the bizarre notion that house prices will continue to increase and that a property can never be sold for less than a profit; an excruciating demonstration of what I intergenerational myopia. In 1985 the average house price was around £35k, in 2025 it had risen to around £272k. In 1985 the average salary was just under £7k, while the average in 2025 was £39k. So the average house price in 1985 was 5 times average, now it’s closer to 7 times. And its not just the cost of housing that has increased. Food price inflation was almost 20% in 2023 and whilst it has fallen since, the huge price increases between 2022 and 2023 are now ‘baked in’, they aren’t going anywhere unless we see deflation, not just disinflation.
Asking people to save more to buy a house “because that’s what I did” fails to recognise the fundamental change in house prices and inflation in general over the past 40 years, and the lack of corresponding inflation to salaries to match. In addition, many smaller, cheaper properties which would once have been purchased by first time buyers in city centre locations (maybe not the City) have been purchased for short term lets, taking them out of the available housing pool for new entrants to the property market. This is a form of intergenerational myopia which prioritises the needs of one generation, those who already own their own home and are buying another, over another.
This same intergenerational myopia can be seen in peoples’ responses to climate change. At the time of the last UK election I watched someone being interviewed in small-town-Englandshire (sadly I can’t find the clip) where they said that they were too old to worry about climate change. I hope that the individual in question has children, or grandchildren, and that they took the time to educate their family member afterwards on the impact that this would likely have on them.
We tend to think in concentric circles, like the ripples on a pond: What impacts me, what I can directly influence. This is one of the reasons why making climate change / global warming your problem, about something you can influence by recycling or buying an electric car, is so effective at creating small changes but not big changes. Unfortunately, just as one person choosing not to expect more than inflationary increases in the value of a property isn’t going to fix the housing market, making small changes to things like recycling and personal energy usage isn’t going to have the same impact as full-on systemic change. It’s not us big oil, it’s you. https://www.theguardian.com/commentisfree/2021/aug/23/big-oil-coined-carbon-footprints-to-blame-us-for-their-greed-keep-them-on-the-hook
These circles exist in social space (how far removed am I from someone who is impacted by this), the physical space (how far physically am I from the thing which is happening) and across time (is the impact far enough in the future that I can’t see it happening to me now, in six months, and so on). Interestingly, the distance/impact issue also affects those who invest their money in order to create change. Research has shown that people are more likely to invest impactfully for their local community than things which are happening to other people in other countries, even if those projects would help more people (investors are rarely utilitarians).
If we are going to create a sustainable future for all, it needs to be one which recognises these issues, whether that’s the social function of coffee-shops, the housing crisis, or the lack of understanding of how our actions now impact future generations through climate change, social cohesion and so on.
We can’t fix the housing crisis if we don’t fix the system in which it operates. We can’t fix the energy crisis by switching off the bathroom light (with its snazzy new LED bulb). Sadly, this also means can’t fix the financial system if our attention is focussed on the actions of a few hundred retail investors when the majority are still invested in assets which are fundamentally short-termist in their outlook, or aren’t engaging with the massive institutional capital investments of pension funds and the like.
Fortunately, there are initiatives which are looking to create the necessary systemic change we need. There are many excellent resources out there, but I thought I would link a few here for anyone who is interested.
School of Systems Change: https://www.schoolofsystemchange.org/
Net Zero Lawyers Alliance: New analysis. How corporate overlords are unlawfully ignoring future climate impacts. https://www.youtube.com/watch?v=YtS0j4hXCAs
Personal Finance Society Sustainable Finance Podcast with the excellent Seb Elwell of Switchfoot Wealth https://www.youtube.com/watch?v=ZYgO-bNBpCA&t=3344s
Until next time
Alan