Categories
Young Finances

Why Getting the Latte Makes You Richer

Do you have a guilty pleasure that always seems to steal attention from your financial goals?

For many people, purchasing coffee each morning is becomes their ‘expensive’ habit. Coffee is more of a want than a need so it’s often looked down upon in the world of personal finance. Financial goals such as saving money, paying down debt, and investing should take precedence over morning coffee distractions. Or so most financial ‘gurus’ would have you believe.

But coffee only costs $2-$5, depending on where you get it and the size of your cup.

In his book, The Automatic Millionaire, David Bach writes about an idea called, The Latte Factor.

It’s based on the notion that small expenses, like purchasing a morning coffee, can add up over the course of a year. Let’s say you get a coffee each day before work. Most people work 280 days per year. Let’s round up and say your coffee costs $5 per cup. This will cover those ancillary purchases such as adding the occasional fresh scone to your order. Don’t forget to include tips as well. This daily coffee run is looking expensive, isn’t it? It is. At the end of the year, this one small habit would end up costing you $1,400 annually!

While most people don’t order a latte every work day, The Latte Factor suggests that the money you spend on coffee can be saved or put toward a financial goal to help you get ahead quicker.

At the surface, this sounds like a very insightful concept. However, I don’t buy it. The personal finance community teeters between those who agree that saving money by cutting small expenses is worth it and others who believe the real savings come from big wins. I call them the Money Makers and the Money Savers.

If coffee is your thing, I don’t think it’s realistic to just stop dead in your tracks and do away with it. I’m here to tell you to buy the darn latte if it makes you happy; it just might make you richer too.

Making Coffee at Home Doesn’t Save Much

Contrary to popular belief, making your own coffee at home each morning isn’t as cheap as it sounds. You have to purchase ground coffee or coffee beans, cream and sugar, a coffee maker (if you don’t have one already) and you also have to factor in the time it takes you to alter your morning routine. You must add ‘be a barista’ to your list of morning responsibilities.

Depending on the brand you buy, a cup of coffee costs $0.70 to $1.80 a cup to make at home. Saving just a few bucks on coffee is hardly worth the hassle, in my opinion.

You May Pick up Other Habits

If you force yourself to stop buying a morning coffee, odds are you will hunt for other ways to spend that extra coin. You may do so by swinging by McDonald’s for a breakfast sandwich. Or you may grab store bought drinks as a morning pick-me-up. There’s a good chance you will still find a way to spend the money.

If made for you coffee helps with your productivity, it might not be the best decision to give it up. In order to get the most work done throughout the day, you need to be focused and work efficiently. I’m not saying go out and purchase a $10 espresso shot Mocha Cookie Frappuccino each morning, but if you feel you need or would perform better with a coffee, then by all means don’t beat yourself up about it!

[Tweet “Buying expensive coffee is worth it if it makes you more productive.”]

You can always pick up a drink during happy hour, use seasonal coupons or earn gift cards through Swagbucks to cut costs. When it comes to saving money and meeting your goals, there are bigger fish to fry.

Go after Big Wins

While the math behind The Latte Factor is sound, the concept is a little silly. Instead of focusing only on small details of your budget, try going after big wins. Cutting larger expenses will have a more profound impact on your budget.

Let’s touch on earning money for a moment. Getting a raise at work or increasing your income are big, life-changing wins. It’s important to balance out saving money with earning more and establishing new side hustles to improve your financial situation. Remember, the amount of money you earn can be limitless. Getting the made for you coffee can wake you up to those big financial wins.

Has cutting out lattes ever made a profound impact on your life?

 

Originally posted 2015-07-01 10:00:51.

Categories
Earn Extra Income

How to Jumpstart Your Finances: Start a Blog

Hi, I’m Kathleen. I blog over at FrugalPortland.com and ForProfitBlogging.com. LaTisha and I started the Save 50% group on Facebook — join us over there! LaTisha kindly allowed me to write a guest post to help get the word out about the ebook I wrote about starting a blog and following all the right steps.

If you’re trying to jumpstart your finances (and you are, if you’re reading this), one of the absolute best ways to do so is by starting a blog.

Think about it.

You have a story — maybe it’s about how your college choices landed you under a huge mountain of student loan debt and you’re just waking up to your new reality.
Or maybe you woke up on your 30th birthday and realized that this was the year you were supposed to have everything figured out. The year your young self said you’d be married and have a kid, but you woke up after that magical “figured it out by now” milepost not only single, but broke, and still in credit card debt?

That was me. I couldn’t believe how stupid i’d been. And I was motivated to change. Not only that, but I knew that my situation wasn’t unique. I’m no snowflake, so even though I felt like a complete idiot, I knew I wasn’t alone.

And I knew that I could help others change if I could change.

So I started mapping my way out of credit card debt, then student loan debt, then auto loan debt. And I did it publicly to increase my chances of success.

How to Jumpstart Your Finances: Start a Blog

Why Start a Blog?

In my friend group, I was the odd one out. I didn’t have it figured out, and everyone else did. They had good jobs with good benefits, and even though they loved me, they couldn’t empathize. So I needed to find a new circle.

I needed accountability. I needed people who understood what a weight off my shoulders it was when my debt went from $10,000 to 9,999.

I had no idea where it would take me, and I have no idea what my life would look like now if I hadn’t started writing when I did.

If You Have a Story, You Have Enough Material

I believe everyone can make money telling their story online. How much money? It depends on how much work you want to put into it. In my mind, there are different tiers. There’s the Thai food tier, which means that the blog takes you out to dinner once a month, there’s the cable bill tier, which means your blog is paying one of your bills, there’s the rent tier, which is when you know you’re starting to make serious money, then there’s the quit-your-job tier, which everyone thinks they can get to, but few do.

Making money should be secondary to telling your story. But some of the technical stuff gets in the way of blogging. You shouldn’t have to be a webmaster whiz in order to start telling your story online.

I’m a professional blogger now, meaning I work as a blog manager for a company that teaches other companies how to set up inbound marketing programs to generate leads. That means I’m a super dork when it comes to this internet stuff. When i’m not blogging for work, i’m blogging for my own business, and when i’m not doing that, i’m eating, exercising, or sleeping.

I’m also a serial entrepreneur. When I have an idea, I buy a domain, set up WordPress, then wonder if my idea has any legs.

My good friend Anne is the same way. Together, we’ve started over 20 blogs, and the steps are not intuitive. It’s frustrating to remember what your’e supposed to do first, second, third, and so on.

So we wrote a checklist to guide us the next time we started a blog.

The checklist turned into an ebook, and we realized that if we’re finding value on this, others will too, so On Your Mark, Get Set, Blog! was born.

It’s a step-by-step guide to getting you started with your new blog without missing any steps. You’ll look professional from the very beginning, and if you follow the steps, you’ll feel like “a real blogger” sooner than you think.

Originally posted 2015-02-27 10:00:42.