Giving up a daily takeaway coffee can save you £1,007 each year

FOR many of us, a caffeine jolt is the perfect way to kick off the day, but if you're opting for a takeaway it could be costing you serious money.

In fact, if you buy a latte from your local barista every day for a year it will cost you a whopping £1,007.

While most coffee shops are shut for dining in during the pandemic lockdown, plenty are still offering takeaway services.

But switching to instant or using a cafetiere at home can save you hundreds or even thousands of pounds.

In June last year, the average cost of a latte was £2.76, according to research from ThinkMoney.co.uk.

Even making a relatively small change such as dropping one takeaway coffee a week can really add up – saving you £143.52.

Depending on your caffeine hit of choice, you could see bigger savings. For instance, speciality and flavoured coffees are often more expensive. That means that if you cut them out you'll splash even less cash.

On the other hand, if you usually opt for a cheaper flat white, black coffee or even tea, you'll be saving less because you'd have spent less in the first place.

How much you'll save also depends on where you live as chains tend to vary their prices across the UK.

London is the most expensive region with Londoners paying 9p more per latte than at the cheapest city – which was Birmingham.

If a Londoner is buying a coffee each day that means they'll be paying £32.85 per year for the same drink.

To work out how much you could save, first check the price of your usual beverage at your local coffee shop.

To calculate the savings if you cut out one a day, multiply the cost by 365. If you want to drop one coffee a week – multiply by 52. If you only get one on your way to the office multiply by 256, which is the number of working days in the year.

How to recession proof your finances

IF you’re worried about the recession hitting your finances then we explain how to protect yourself.

CHECK YOUR FINANCES Take a look at where you can cut costs. Are there any subscriptions you could cancel? Could you haggle down a bill? Reassess your finances and work out where to save cash and then save this money into a rainy day fund.

PAY OFF YOUR DEBTS Make sure you're repaying priority debts and if you're struggling speak to your lender. Use a tool such as MoneySavingExpert.com's eligibility checkers to check which cards and loans you're likely to be accepted for without it hurting your credit score. You can get FREE debt advice from places like Citizens Advice and StepChange.

DIVERSIFY YOUR PENSIONS AND INVESTMENTS If you've got a pension or investments make sure your pots are well diversified. Being overexposed to one asset class or one particular company could put your savings at risk if something goes wrong.

Last year, the average latte cost dropped to £2.63 thanks to a temporary VAT cut introduced by the government.

The cut was designed to help businesses cope through the pandemic, but many coffee chains, including Starbucks, Costa and Pret passed the savings onto customers.

But with the VAT cut due to end on March 31, the nation's coffee is set to get more expensive meaning every takeaway will hit your wallet that bit harder.

If you are cutting down caffeine to save some cash, you might want to transfer the money out of your current account so you don't accidentally spend it elsewhere.

If you don't fancy giving up your coffee there's lots of other savings challenges you can do.

For instance there's the weather saving challenge where you save the amount equal to whatever the highest temperature was that week. £1 = 1C.

Another popular approach is is the 1p challenge. In this scheme, you start of saving 1p on the first day then increase the amount by an extra penny each day. So, on day one you save 1p, 2p on day two and 3p on day three and so on.

When you reach 100 days you start again but adding a £1 coin each day too, while this increases to a £2 coin each day plus pennies at 200 days, and £3 each day on top of pennies at day 300.

If you want to put a bit more aside you can opt for the 20p a day challenge. Here you start by putting 20p in savings, then increase the amount by 20p every day. For example, the first week will look like this: 20p, 40p, 60p, 80p, £1, £1.20, £1.40.

If loose change is hard to come by in lockdown you could also try the £5 a week challenge – Like the 20p challenge, put aside £5 a week and increase it by a fiver each week. Eg £5, £10, £15, £20.

Lots of banks including Lloyds, Starling and Monzo will also let you round up purchases to make incremental savings. Every time you buy something, the purchase is rounded up to the nearest £1 and the difference goes in a savings account.

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