It's generally agreed that consuming up to 300 mg of caffeine per day is safe. That's roughly the amount of caffeine you would get from three cups (not mugs or big paper cups) of coffee. Women who are pregnant or may become pregnant may want to decrease that amount or skip the caffeine altogether.
Caffeine is a stimulant and some studies show that small amounts of caffeine may increase your mental response time. Other studies show that the cognitive improvements and mood elevation may not really be due to the beneficial aspects of caffeine as much as ending the withdrawal symptoms you feel when you haven't had your morning "fix" yet.
Consuming more than 300 mg caffeine per day may give you the "caffeine jitters." Larger amounts of caffeine may make you irritable, sleepless (try a light bedtime snack if you have trouble sleeping) and may even trigger anxiety and cause diarrhea. It was assumed for a long time that drinking too much coffee or other caffeinated beverages would cause dehydration because caffeine can act as a diuretic. Howeve, researchers found that your body adjusts to your caffeine intake so drinking caffeinated beverages won't increase your need for water.
Kicking the caffeine habit cold turkey isn't so good either. Caffeine withdrawal can give you headaches, make you crabby, give you muscle aches and generally make you feel miserable for a few days, but after a week or so, the withdrawal symptoms will pass.
More about Coffee and Caffeine
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Rogers PJ, Dernoncourt C. "Regular caffeine consumption: a balance of adverse and beneficial effects for mood and psychomotor performance." Pharmacol Biochem Behav. 1998 Apr;59(4):1039-45.
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