The Latte Factor: Not For Coffee Lovers…

I went to a money seminar once where the speaker talked about Coach bags. Now, I’m a guy, so this is completely irrelevant to me, but his point was, how important is it to have this “fashionable” handbag? In my mind, he went about it the wrong way, because he tried to find things wrong with the bag. Rather than be negative about the thing itself, I suggested that instead he and the other people think about what else they might want more. Don’t think of it as “have the bag, or not have the bag” but think of it as, which is more important, that handbag, or having enough money to take that vacation, or to retire, etc. The secret is to make choices between things you want. This is the essence of resource and asset allocation - focus on your priorities.

Now, I realize that lots of PF mags and sites focus on all of the things you can “do without” to save. But that misses the point to some degree. The goal is to have a life that lets you *mostly* do what is _really_ important to you. If you think Starbucks is _really_ important, it’s ok, but the question is, what are you prepared to go without in order to have it.

This is why people need budgets. Most people believe that they are constraining because they look at them the wrong way. In my mind they are really liberating, because they free you from what I call the curse of the checkout line. When you are in the store standing on line, your choice is between having the thing and not having it (fulfillment, however fleeting, and denial). If you think your budget is forcing you to deny yourself too much you see it as constraining and then you start cheating. This is especially the case when people go on the “belt tightening” mode, where they are trying to make up for past overspending. The change can be particularly jarring. But the secret is always to see the choice not between the thing and not the thing (which always feels like denial), but between this thing and something else. It’s much easier to say, no I’m saving my money for xyz than it is to say, “I can’t afford it”.

Ultimately, while I think the reminders about the little things adding up is important, it is also important to realize that sometimes those little things ARE worth it (this is what the PF mags overlook), the key it to know that BEFORE you go into the store.

Here is one for Starbucks:
http://www.hughchou.org/calc/coffee.cgi

Our very own frugal Nick blogged about these sites and their creator:
http://www.1stmillionat33.com/2006/11/muffin-calculator-for-little-savings-that-goes-a-long-way/

Great article, Kim.

I drink tea made from tea bags. Couple of bucks for a 100 pack.

Bargain

:D

Phil

PS Last time I went there I had something with cream on it though - it was cold and I think had vanilla in it. Very tasty.

After looking at the numbers that I spent on coffee, I decided to invest in a quality coffee brewer (the technivorm at $200) and roast my own coffee (at $5 a pound for top notch gourmet coffee, and a $15 popcorn popper, you can’t go wrong), turning my $4-$8 a day coffee habit into maybe $1 a day tops. I didn’t quit, I just made the expense actually reasonable.
Cigarettes, i kicked cold turkey. It sucks, you hate life for a few weeks but just do it, the bring you nothing good.

Point is, don’t allow retarded expenses to continue. (buying coffee in latte form from a cafe means you spend $90 a pound on coffee, go search around and buy yourself a nice espresso machine and it will pay for itself in a couple of week)
If you have a daily habit that seems to be getting out of hand, and you love it, don’t quit, figure out a cheaper alternative. If the habit is soda, buy in bulk. If it is coffee, make your own. Don’t give up because of convenience’s sake.

Frugal Duchess had an interesting post about Starbucks the other day. The comments were funny because in it, it turned out that Starbucks was offering a less expensive social connection than say, going out to eat! Who would have thought Starbucks would be the frugal alternative? It;s al a matter of perspective- something I think Kimber nailed.

Yes, the brand name folks do filter, filter, filter (even more so than the water used in carbonated soft drink production).

Have you ever been seriously addicted to anything?

No drama (well, maybe a bit). Diet Coke made me very, very ill (freak caffeine intolerance) and I still had severe difficulties kicking the habit. Was getting to the point of choosing that or a hospital stay (sort of like the smokers battling lung cancer). So yeah, money wouldn’t have been a strong enough motivator for me.

As for bottled water, what I really don’t understand is no name, generic bottled water sales. At least with a brand name (Dasani, Aquafina, Evian), the manufacturers have something to risk if the quality is not all that. With generic, well, I would feel safer with tap. I know where tap comes from.