The Latte Factor was coined by David Bach in his book titled Start Over, Finish Rich. This simply means the little things that we mindlessly spend on daily, like buying coffee every day on your way to work, thus the term Latte Factor. It covers more than just that simple latte, it could be grabbing that bar of chocolate at the till every time, that magazine that you aimlessly pick up while doing your weekly shopping , those lottery tickets that you religiously buy every week or that lunch that you buy at work daily instead of making them yourself. These little trivial things do add up and at the end of the month, you will be surprised to know how much you have spent on them when they could be avoided.
The authors suggests that we monitor our daily or weekly spending and identify our Latte Factor. A daily cup of coffee on your way to work could cost you £3. That is £15 a week and £60 a month. A total of £720 a year! For someone who is an advocate of the idea of enjoying the small things in life, this does not really sit well with me. For someone, that daily cup of coffee from a barista could be their little luxury like mine would be flowers and candles. I suppose I could just get flowers from our garden which I tend to do sometimes but nothing beats that beautifully cultured flowers from the shops. I guess what the author wanted to emphasize is how much you are willing to forego of the little luxuries in life in the aim of saving for something bigger like adding that up to your yearly holiday or to your retirement fund. By all means, if you enjoy these little luxuries, keep them. As they say, life is short after all. Now excuse me while I cancel that digital tv subscription. We do not have time to watch television, anyway.
Now I get the point. Did you?
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