Saving Pennies or Dollars? Making Your Own Soda

saving pennies or dollarsSaving Pennies or Dollars is a new semi-regular series on The Simple Dollar, inspired by a great discussion on The Simple Dollar’s Facebook page concerning frugal tactics that might not really save that much money. I’m going to take some of the scenarios described by the readers there and try to break down the numbers to see if the savings is really worth the time invested.

Marshall said, Perhaps you’re already done considering ideas for the segment, but I never have run the numbers on whether or not the SodaStream machine I bought for $80 will ever save me money – assuming the device lasts a long time (I don’t see why it wouldn’t.) One thing it does do is provide me a great variety in the flavor of soda’s and less recycling/trash.

Right off the bat, the point needs to be made that it’s far less expensive to drink water than it is to drink any kind of soda, whether it’s SodaStream or any prepackaged soda. I can get a gallon of water from my tap for less than a cent. Not only that, it’s better for me than the soda.

Now, let’s look at Marshall’s question. Marshall is referring to a SodaStream, which is one of several different types of household devices that mix water and a syrup to create a soda beverage for drinking. Typically, these devices require an initial investment to buy the machine, but thereafter you only need to buy replacement syrup. Once you’ve sunk the initial cost into the machine, the cost of the syrup and the water is somewhat less than purchasing soda at the store.

Is it a bargain? It really depends on how much soda you drink. What we first need to figure out is the “crossover point” – the point at which a SodaStream machine and the syrup necessary becomes less expensive than the equivalent amount of purchased soda from a store.

Since there are tons of variables here, I’m going to simplify by comparing Coca-Cola to the SodaStream using the “cola” mix. The same approximate numbers work for other soda-making devices and other sodas you might buy at the store.

Costs for SodaStream As mentioned in Marshall’s message, you can purchase a SodaStream machine for $80. After that, you can purchase “cola” refill kits for $5. A single “cola” refill kit costs $5 and makes 12 liters of soda.

Costs for buying Coca-Cola My local store regularly offers a dozen 12 ounce cans of Coca-Cola for $3. This is 4.25 liters of soda for $3.

Cost per liter The cost per liter for SodaStream cola is $0.40. The cost per liter of Coca-Cola is $0.70. Clearly, the SodaStream is going to be cheaper over time.

How much soda do you have to drink to make up for the initial cost? You save $0.30 per liter of SodaStream cola that you drink versus Coca-Cola. The initial cost of the machine is $80. Thus, you’d have to drink 267 liters of soda to make up the initial cost.

Wow. That’s a lot of soda.

To put that in perspective, a twelve ounce can of soda is 0.35 liters. You would have to drink roughly 762 cans of soda for the machine to start being worth it compared to buying Coca-Cola in the store.

Simply put, for this machine to pay off, you have to be a high-throughput soda drinker. There are no ifs, ands, or buts about it. You have to drink a little over two cans of soda a day for a year to get past that point.

Of course, if you drink the equivalent of three cans of soda a day for five years, a machine like the SodaStream is going to be a great bargain. But if you’re drinking three cans of soda a day for five years, it’s going to have a crippling impact on your health, which isn’t a bargain.

In short, over a long period, a SodaStream can reduce your soda costs significantly if a lot of soda is consumed in your home. However, if a lot of soda is consumed in your home, you may end up finding that you have other expenses as a result of that consumption.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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