The $3 Latte Conundrum

latteeI was reading an article this past week talking about inaccurate statements that financial advisers often give their clients. One of the ones that jumped out at me was the $3 latte idea. We’ve all heard it before, that by cutting out a daily $3 latte, you can save about $100 each month and a little over $1,000 each year. The article tore that notion apart.

The author explained how for many people, this just isn’t feasible advice. For some people, it is a comfort item, having a $3 coffee each morning gets their day off to a good start and that by taking it away, the person is crushed. For other people, if they save the $3 on coffee, they end up spending more money on something else later in the afternoon. Being a believer in cutting out your $3 daily coffee, I wanted to explain a little why I believe this still holds true.

First of all, let’s take a step back. For someone who has money problems, cutting out $90 each month would be huge. There are other viable means of getting your daily dose of caffeine. My company provides free coffee each morning. Granted the quality would be much lower than a $3 latte but I make it work. Learning to make changes is what’s key.

I believe that the issue here is more than cutting $3 lattes. Young Professionals who are looking to get control of their finances will need an attitude change, rather than a habit change. Without having the right attitude of making changes, you won’t have a strong foundation of motivation to survive the test of actually changing your habits.

It actually doesn’t matter what you cut as long you cut something. Once you have made up your mind to get control of your finances, you’ll have to make some choices. If having a $3 latte makes the difference between having a good day and a bad day, then absolutely, keep getting coffee! You’ll have to find something else in your life to cut out. Perhaps you could cut your eating out at restaurants once a week. Perhaps you could consider not getting as many cocktails when going out.

The key to financial success is firstly making up your mind to commit to changing. If you don’t, I can almost promise that you will fail. Having that strong conviction will help you weather any peer pressure or craving.

Secondly, as long as you make changes somewhere, they can be made anywhere. Take a good hard look at your income and expenses, and your goals. Decide how much you need to cut your expenses by and start cutting away. Focus on keeping the things that you enjoy the most and cutting the ones that mean less to you. Or if you’re able, consider ways to increase the income side of the equation. Perhaps taking on more shifts or more hours at work could increase your paycheck. Or trying your hand on eBay selling old stuff you don’t need anymore is always an option.

Committing to change is what will make the difference between success and failure for your financial goals. So it is true, that cutting out a daily $3 latte is a easy way to save money, unless you love your $3 latte, then you can keep them, and just find another way to cut.

Little changes every day will add up to one big change in the money you have left at the end of the month. 

Thanks so much for reading my article! If you enjoyed it, please consider sharing it on Facebook or Twitter! -Ben

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