To Buy The Latte, Or Not To Buy The Latte?

There have been countless articles arguing both sides of the question. David Bach argues in “The Latte Factor” that you can build serious wealth but cutting out small purchases. Ramit Sethi author of “I Will Teach You to Be Rich” disagrees. Ramit wants you to forget the latte’s and focus on the $30,000 questions, not the $3 questions.

So who’s Right?

I will argue that they are both right and wrong at the same time. Saving $4 a day ($1,460 a year) isn’t going to make you wealthy. However, if you cut out a bunch of little things, say $25 dollars a day ($9,125 a year), this will have a significant impact on your financial well being. Invest that $25 a day savings for a few years and suddenly you have turned a seemingly small amount into a large line item.

This doesn’t answer the question of if I can have the latte or not. This is where your own personal situation comes into play. As Rhamit says, “cut ruthlessly the things you don’t care about and spend lavishly on the things you do”. Cut everything you can that doesn’t matter to you in order to get your savings as high as possible. If you love latte’s, make it rain!

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The other thing we need to address is the big factors. The biggest drivers of most peoples expenses are housing, transportation, and food. If you house hack and manage to pay nothing for rent, it’s significantly more effective than saving $4 a day on a late.

Maybe you SHOULD be more focused on saving on the big items rather than cutting out the small stuff. It’s still important to enjoy life now. Don’t just remove things from your life just for the sake of cutting expenses. Could I save a lot of money if I didn’t buy craft beers? Absolutely. Is that a life I want to live? Hard NO!

The main thing many people get too caught up in is getting absorbed in the minor details. I’m not saying the details aren’t important, they are. What I am saying is don’t forget to take a step back and look at the bigger picture. Be mindful of the decisions you are making and consider not only how they affect your long term success, but also your short term happiness.

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About the Author: The Accountant

The accountant spent most of his career in public practice until recently when he took a job with a local company as their in house accountant. As a kid he was always a saver and was constantly trying to come up with new ways to make money.


  1. You’re totally right, Accountant. It’s not an all-or-nothing deal. We need to look at the bigger picture and save money in a variety of ways—both big and small.

    But we also can’t get obsessive and cut out all the little things. Balance and aligning your spending with your core values is key!

    PS If there’s any way you could add an option to “Notify me of new comments by email” that would be so great! I use a free, simple plugin called “Lightweight Subscribe to Comments” and it works well. 🙂

    1. I think moderation is the key to success in many things in life!

      I just tried installing that plugin so hopefully it’s working now. I didn’t even know it was an option, thanks for the heads up!

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