Can Skipping Your Daily Starbucks Really Ensure a Blissful Retirement?

A long-held personal finance rule involves a simple categorization: needs versus wants. Needs are the things you can't live without, such as housing, and wants are the things that you, well, want. 

A modern iteration of that piece of advice popped up a few years ago when famed financial advisor Suze Orman said that buying coffee every day was costing people $1 million. 

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Orman told CNBC Make It that, even though she can afford to buy a cup of Starbucks Jo, she "would not insult [herself] by wasting money that way." 

That sentiment is one that "Shark Tank" investor Kevin O'Leary agrees with. He told CNBC Make It in 2018 that he makes coffee at home and invests all the savings. 

But some, like Bone Fide Wealth president Douglas Boneparth, think that advice doesn't hold much water (or coffee). 

While skipping your daily coffee will probably not turn you into a millionaire, it can give a big boost to your savings. 

The average cost for a cup of coffee in the U.S. was $4.90 last summer -- for purposes of this equation, let's call it $4 even. If you save up that $4 every day, five days a week, you'll end up with an extra $1,040 per year. 

If you start investing that $1,040 every year in a Roth IRA -- a retirement account funded with after-tax dollars -- starting at age 25 with the goal of retiring at age 65, you could turn those un-drunk coffees into $207,000, according to Bankrate's Roth calculator. 

That number accounts for a 25% marginal tax rate and a 7% rate of return. Roths historically achieve a return of anywhere between 7% and 10%. If you manage a 10% rate of return on that same calculation, you wind up with $460,000. 

Investment accounts aren't the only way to save. Some banks offer high-yield savings accounts which can offer a return rate of around 5%. 

Starting with an initial deposit of $1,040 and contributing $86 per month to one of these accounts at age 25, your account balance will be more than $140,000 by the time you're 65, according to Bankrate's simple savings calculator. Over those four decades, you will have contributed $42,312, earning almost $100,000 in interest.