I love drinking coffee. Absolutely love it and I know plenty of other people do as well. It’s usually the first thing I drink in the morning. Maybe it sounds weird, but it soothes me. I drink it during calm activities like reading a book, writing a blog post, or just hanging out. Sometimes I think maybe I drink too much of it, but I just swat that idea right out of existence. (Is drinking too much coffee really ever a thing?)
Coffee is a little thing that helps me enjoy my day. I’m not super excessive about it. I mean if for some reason there’s no way for me to get a cup of coffee I’m not going to freak out and start having withdrawals or anything of the like. It’s just a nice warm beverage that I take a liking to and would prefer to drink everyday.
I usually make a cup in the morning and I’m good for the rest of the day, but I’ll admit more often than not I’ll buy a cup at work, or on my days off I’ll swing by Dunkin (sorry Starbucks lovers) and buy a medium cup of coffee.
SACRIFICE OF THE COFFEE
If you’ve ever been interested in becoming better at your personal finances then I’m sure at one point or another you’ve come across “experts” talking about a thing called the “Latte Factor” or the fact that on average we spend ~$3 on a cup of coffee every day, adding up to roughly $90 a month or $1,080 a year! Woah! That seems crazy right!?
They suggest you need to put the coffee down and walk away. I almost take it as a guilt trip. For a great deal of time I believed this was the only way to save more money. Just cut out those small expenses, but at what other costs?
When I first dove into the world of personal finance in order to straighten my money out a bit and get rid of debt this is pretty much the only way of thinking that I ever read about. I’d read how we could take that “latte money” and put it towards paying off debt or putting it into a Roth and in 40 years I’ll be a millionaire. Millionaire sounds all fine and dandy, but to the expense of not enjoying my life? Screw that man.
At the start I had around $11,300 in debt. That was all on the new Kia Soul that I bought in 2014. That was all of the debt I had and my monthly payment was $277.88. It’s not a bad payment considering the average monthly payment in America is $479. I thought that having no payment would be even better though, so I started to put extra money towards it every month. After a few setbacks and other expenses I didn’t originally account for, such as holidays, I finally paid off my car in a year.
Throughout that time and for probably the next year I kept sacrificing the little things that would bring a little smile to my face, like my coffee or going to see a movie with friends, or going to dinner with them. That stuff doesn’t happen everyday for us and it surely isn’t going to break the bank even if I go out to eat once a week.
{I do want to say that it’s not wrong in thinking to stop your coffee drinking to save money. If you’re drowning in debt and truly want to get a grip on your financial wellness then yes, I do agree that you should start seriously looking at where you can make some cuts in spending and where you’re going to have to make some sacrifices. Then once you have things under control and have a budget spending plan in place, you can start considering about little pleasures again.}
When I was sacrificing the little things I was denying my needs. My needs for social interaction and to just have fun. It was absolutely miserable and it got to the point that I just wasn’t enjoying things even if it did mean I’m saving money. I’d try to joke about my frugality with family and friends so I could feel better about it all.
I’m here to say that there’s another way. Maybe not for everybody, but there are other options out there so you don’t have to feel like you’re sacrificing so much. Now, I will say that I believe there’s always going to be sacrifices that you have to make when it comes to your money and how you spend it and make it. You just have to make the decision of what’s most important to you.
ANOTHER WAY
In Scott Trench’s book, Set for Life: Dominate Life, Money and the American Dream, He says to stop sacrificing the little things and change the big things. Well, what are the big things?
The big things are our largest expenses each month which typically come from housing, transportation, and food. According too a report by the Labor Statistics Bureau, Americans spend nearly 33% of their earned income on housing expenses, 17% on transportation and 13% on food.
So according to that 50% of our expenses are on housing and transportation! What would you say if we could reduce those large expenses down to nothing?
I say reduce because I think it’s more important to learn how to be frugal than it is to make more money. At least in the beginning and if you’re experiencing financial issues. If you have problems with money now and aren’t making that much, odds are that more money isn’t going to help you.
Here comes the fun part because now we get to be creative in our thinking of how to reduce some expenses. Let’s start with housing.
One of the best ways, in my opinion, and easiest ways to reduce your housing expenses is to just get a roommate. YES! A roommate. Maybe two depending on where you live. But wait, you like your privacy so much that a roommate sounds like a preposterous idea? Well, what’s more important to you? Losing the stress of money and sleeping better at night or your precious privacy? I know what my choice would be. That’s why I have a roommate and I’m working on getting a second one!
By having roommates in my house I’m essentially living for free! My mortgage, taxes, and insurance on my house add up to just under $952 every month. I make $3500 a month. You don’t even have to do any month to be able to tell that’s a rather large chunk of my paycheck. Well with two roommates I can make roughly $1,000 from their rent and just like that my major housing expense goes out the window!
The only limit to your options on reducing costs is with your creativity. And if you’re reading this then you have access to the internet so use it! It’s filled with creative ideas.
What about transportation?
This can be a little tricky, but once again there’s still plenty of ways you can reduce your expenses. For me, the best way was to pay off my car. That keeps nearly $300 dollars in my pocket every month. If that’s not quite an option for you yet then maybe you could use public transportation, carpool, move closer to where you work so you can walk or ride a bicycle. I could keep going but I think you got the point.
FINAL THOUGHTS
By exposing myself to other ways of thinking and also thinking creatively and outside the box, I’ve made a plan that fits my life in order to save money and actually enjoy life even more because now when I think about getting a coffee I just do it! I don’t stress for the next 10 minutes about how much one coffee could ruin my financial livelihood, forcing me into a deep deep depression. Okay, maybe it was never really that bad, but it does suck denying yourself little things in life that in the end aren’t really going to ruin you.
So start thinking about what you can do to reduce your largest expenses and changing the big things so you can start enjoying the little things in life. It’ll make a world of a difference for you!
Patric