The “latte factor” does go a long ways towards savings. It’s not just going out for dinner or buying clothes. It’s a way of life and of saving. Everyone has a latte factor, it’s what we do about it that counts. I love cars, electronics and Starbucks, but I limit myself. By limitting
your everyday purchases you can save more then you think. Sometimes I think about how anal I am about saving money, but at the end of the month it’s nice to you I still have money left over. I would consider my wife and I to be in the upper middle class, but we still spend like we did last year before she graduated from the RN program and started working as a nurse. We go out all the time, but we use coupons. She still cuts my hair. I do my own lawn and home maintanence. We buy clothes at Walmart(clearance rack) or at least I do. Our cars are paid off and we have no credit debt. Maybe that designer shirt and pants only sets you back $200, so you put it on your credit card and decide to only make the minimal payment. That shirt and pants will end up costing you more then the original $200. Lets say you put all you latte factors on your credit card. Now a year has gone by, and your outstanding balance is $20,000 and you can only afford the minimun payment. Your interest rate goes up to 18%, your rent increases by $100, gas continues to go up, and Starbucks raises it’s lattes by $.35, What are you going to do? I tell you what I would do, I would call my mommy and ask for a loan that I possible couldn’t pay off.
