The Latte Factor

August 1, 2020 - Christian Torres

Has there ever been something you always spend your money on; something that you always need to get when you're on the go every day? For example, is getting an energy drink or a cup of coffee to boost you through the day part of your routine? Do you spend a couple dollars every time you satisfy this little desire? This phenomenon is something in the CFC, we like to refer to as "The Latte Factor." 

The Latte Factor is the concept that a small amount of money spent on a regular basis can add up to cost more than we think. Those small amounts of money you spend may not be a lot to you in the beginning, but as you progressively make more small purchases, the amount you spend in total cumulatively makes a difference and really starts to hurt your pocket book more than you think. 

Personally, I used to enjoy getting the Beach Bum smoothie with dark chocolate from Tropical Smoothie Café everyday my first two years of college. The smoothie is roughly $5.30. Like I said earlier I used to get to it every day for two years. Now for a week that cost me about $37. That might not be a lot at first glance, but for a month it would cost me $159. For a year I spent $1908 and that shook me. I had to make lifestyle changes, so that way I did not have to spend as much money. I bought a blender, and some fruit and I was able to make my own smoothies and save a lot more money to reduce my “Latter Factor.”

This idea can be applied to other daily purchases besides coffee, it can be applied to movies, lottery tickets, clothes, eating out and anything else that you purchase that you don’t necessarily need. Most everyone probably has a Latte Factor, whether they realize it or not. 

To address your Latte factor, look for alternatives. For example, what would happen if you made your coffee at home instead of purchasing it from Starbuck's every day? Would you save some money? If you gave up drinking energy drinks and switched to water, would you save money? There is no one way to address the Latte Factor, there are many options. You can take your personal financial situation into account when addressing it. to get you started, here are some helpful tips that can help you reduce those small expenses that add up to a lot:

  • Track your budget for a month
  • Highlight any small expenses you make regularly
  • Decide if these expenses are worth continuing to spend on
  • Consider where to cut-back if you can
  • Have a plan for the money saved
  • Take advantage of student/free resources

Remember there is not a single way to cut back on the Latte Factor. It is personal to everyone's specific financial situation. If after tracking your expenses, you realize that your Latte Factor is that you like to eat out every day, you can start cooking food at home to reduce the expense. Perhaps you eliminate eating out, entirely, and cook all your meals or you still indulge, can and simply reduce the amount you eat out. A small change like this can add up and make a huge difference in your monthly budget. Making your savings or long-term financial goals more attainable.  starting these little changes now, can really impact how much you save in year.