Live A Little: Have A Latte

This post was featured in the following carnivals:

Yakezie Carnival at Little House in the Valley
Carnival of Financial Camaraderie at Financial Success for Young Adults
Totally Money at Passive Income to Retire
Festival of Frugality at Squirrelers
Carnival of Wealth at Control Your Cash
Carnival of Financial Planning at Credit Cards Canada
Carnival of Retirement at 20’s Finances 

This is a new series I am starting on this blog. It is called Live A Little, and it is not about how to save more by cutting expenses and living frugal. It is not about a debt snowflake or solo 401K rules.  It is all about spending. Don’t you frown already! We spend money on something almost every day. Some of those expenses make us feel guilty because we think that we make frivolous and unjustified spending choices. I am here for you to say “Stop feeling guilty. Live a little. It is okay to spend.” Life is not all about money.

We have all heard about “the latte factor“: spending on small thoughtless purchases that add up to a humongous amount of money in the long-term. What it means for you and I is that the money we spend on coffee, cigarettes, candies and what not, fritter away our financial future. If you are thinking like this, then you are missing a major point:

The latte factor is not about how much money you are spending. It is about how much money you chose to keep.

Why I Spend On A Latte

I love my morning latte. I love the way it tastes: hot, steamy, bitter (I drink it strong with no sugar added). I love the way it makes me feel in the morning – awake.

It is not cheap. Let’s say I pay about $4 for a medium size. If I buy my latte once a week (I try to be good and do it once a week), I spend $208 a year. On coffee. A year. It is quite a frivolous choice in many people’s eyes.

What People Say

Horror! Why not to invest $208 you spend on your morning latte annually, and in 25 years you might have over 10,000 dollars in your retirement, assuming a 5% return? Take into account the compound interest and see for yourself how much money you, silly girl, are throwing away.

What I Say

Assuming you live long enough to make it to retirement, do you want to live your life for the next 15, 20 or 30 years hoping that when you retire you will finally splurge on all these lattes you were dreaming about for the last 15, 20, 30 years? Do you want to watch people passing by, lattes in hand, and try to suppress the sneaky thought that they don’t give a shit about their retirement, and maybe that’s why they look so happy sipping their damned lattes?

Go ahead, get yourself a latte. It does not mean that you are financially irresponsible, careless and a selfish spender. It means that you chose a balanced (please note that’s the key word here) approach to your life and your finances.

How to Spend Money on Your Morning (or afternoon) Coffee And Not Feel Guilty

Budget for it. I have an allowance that covers my lunches and my lattes. If I go over it, I stop spending (it is not easy but it works) and wait till the next allowance.

Or give yourself a gift card with an allotted monthly amount to be spent on coffee. It works as well as an allowance.

Support your local coffee shops and not big corporations. Local first!

Exercise moderation if not in the name of money and your financial future, than in the name of calories. Don’t go overboard with your lattes.

You made a personal choice, embrace it. Don’t let others shame you into feeling guilty.

Keep doing all the good, smart and responsible things you’ve been doing with your finances. It will make you feel good and you will forget about your lattes that presumably are robbing you of your retirement.

Seriously, 10,000 dollars extra in my retirement account will not make or break my retirement lifestyle.

Live a little. Have a latte.

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48 Responses to “Live A Little: Have A Latte”

  1. 101 Centavos says:

    Sure, who doesn’t have their vices? I could forego the whiskey and cigars, dump the savings in a Roth account, and my life would be the poorer for it. No more pleasant evening smokes on the back porch, boozily and agreeably solving the world’s problems with a couple of friends.

    • aloysa says:

      One never should forego earthly pleasures of drinking and smoking with friends because most of the world problems are usually solved on the back porch.

  2. Dannielle @ Odd Cents says:

    Money is meant to be enjoyed as well. If you’re budgeting in those little pleasures, then you’re all clear.

  3. Thank you for making me feel better about my Starbucks addiction!

  4. Love my Starbucks Caramel Machiato :) I do drink it once a week as well. Totally agree with you.

  5. Nothing wrong in sending money on self improvement. If coffee makes you feel better and work better then that’s the way for you. I feel satisfied with my free office Bravia every morning too. Only difference it saves me that $208 per year

  6. Jackie says:

    I love the title of this post! I spend a lot of money eating out, because I really, really enjoy doing that. But I enjoy it more now that I’ve cut back, which may seem strange. But I think the key part of the “latte factor” is the mindless spending; not the spending itself. I may have to write a post on this :)

    • aloysa says:

      Oh yeah, eating out is another thing I need to write about. We are guilty of it as well.
      Glad I gave you an idea for a future post!

  7. YFS says:

    I love this post! Most people get caught up in the small wins instead of going for big wins. If a latte makes you feel good. go for it! You have to have a little fun. I say drink all the latte’s you want as long as you focus on making it up with the big wins.

    • aloysa says:

      I would not recommend drinking all the latte you want money wise and calories wise but definitely, have some. You captured the essence of this post, my friend!

  8. The latte factor, as I understand it, is more about folks who drink that $4 drink daily to the tune of $1400+ annually. Quite a difference between a habit and a treat.

  9. this is one of the reasons i save for vacations. yes i could use that money to pay off debt but i love to travel : )

  10. MoneyCone says:

    If you have to pay for your coffee using a credit card, that is a bad deal. If not, live a little!

  11. […] My Broken Coin on Live a Little: Have a Latte: Aloysa is a girl after my own heart. If we meet in person at FINCON12, we’ll probably end up ditching the conference, drive around house-hunting in the most expensive neighborhood in Denver and top it off with a shopping spree on the 16th Street Mall. Just kidding. We’ll be very productive and take studious notes at every presentation. […]

  12. Jai Catalano says:

    I got lucky… I photographed the daughter of the owner of a great fancy coffee shop. I now have tons of free (any type of) coffee cards.


  13. Little House says:

    I love my Starbucks espresso w/vanilla over ice. I know exactly how much I spend each month and I budget for it. I’m not an excessive shopper, I don’t drool over Manolo shoes or Kate Spade (did I spell these right?) hand bags, so for $60 a month, I can splurge on a drink every morning. It’s my one little indulgence.

    • aloysa says:

      Sadly enough I would still drool over Manolo and Kate Spade shoes. Would I buy them. No. I’d rather have my coffee.

  14. lifeoverwork says:

    Good for you in finding small joys in spending your money! I was lucky enough to be born with a natural tendency towards being frugal, but I sometimes wish I could enjoy spending more. :-) Very interesting to come across your blog and find someone with a different mindset of my own — I’ll be sure to keep reading to balance out my occasional cheapness.

  15. Yeah, I also say go for it. Live life a little, it’s all about the journey. :)
    Spend money on what you enjoy right?

  16. Charles says:

    i think if if you enjoy drinking it, then you should live a little and enjoy the perks of living life. but if someone is addicted to it and needs to have it every couple hours, then there could be an argument for money saving opportunity there.

  17. I like your emphasis on balance. Having a purposeful spending plan for the things that we deem important or worthy can give us the motivation to stick to the overall budget. It’s kinda like trying to diet by eating only celery. It may work for one day but then we sit down and eat a whole cake! If you have planned for the latte and it makes you happy, sip away….just let me join you occasionally!

    • aloysa says:

      Balance is important in everything really. When we lose balance, we lose control over things. Then we end up eating a whole cake. :) Everything in moderation! 😉

  18. I agree with you; the best way to enjoy the little things in life is to budget for them. Saying “if you invested that money instead” for everything you spend money on is not realistic because most people do feel the need to spend some money on non-essentials. The key is to do it in moderation and not break the budget.

  19. […] Not having to carry even a wallet sounds interesting. I wonder what they do to keep these secure.Live a little. Have a latte! @My Broken Coin10 things you to do save money that end up costing you more @Life HackerSimplify […]

  20. Carnival of Financial Planning – Edition #220 – January 20, 2012 | Credit, Eh - The Credit Card & Personal Finance Blog of says:

    […] Aloysa presents Live A Little: Have A Latte posted at My Broken Coin, saying, "This is a new series I am starting on this blog. It is called Live A Little, and it is not about how to save more by cutting expenses and living frugal. It is about spending, but in an intelligent way." […]

  21. […] love Aloysa’s new series titled Live a little- Have a latte. I think too many people get stuck in the whole invest and wait for retirement mantra that they […]

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  24. Carnival of Retirement – 3rd Edition - 20's Finances | 20's Finances says:

    […] from My Broken Coin published Live A Little: Have A Latte, saying, ‘This is a new series I am starting on this blog. It is called Live A Little, and it […]

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  26. […] mysterious Aloysa at My Broken Coin is sick of hearing about frugality, or at least frugality for its own sake. Because she’s […]

  27. […] so motivated to save money as I was that year. Nothing could distract me from my goal. I erased the latte factor. Friends would call and ask if I wanted to go to dinner and I said, “No.” I turned down […]

  28. Simple Rich Living says:

    Love it! Balance is so important! We work to make and save money but we have enjoy it as well!

  29. Bridget says:


    This is the best! I HATE the latte factor theory. I buy lattes all the time! Yesterday I even had two! And know what? I’m still saving for retirement. I’m even kicking my student loan’s ass and investing in the stock market. I’ve managed to build up a good chunk of financial assets — all while enjoy grande Cinnamon Dolce lattes for Starbucks at least once per week.


  30. […] “Need” for Technology: If the first two challenges weren’t enough, most young people have lives that are connected to technology. Interacting on social networks is part of young adults’ culture. Facebook was created with my generation. The ability to stay connected doesn’t come without a price. The monthly fees that young adults pay for internet on their smart phones combined with the hefty price tags of the latest technology (computers, smart phones, tablets, i-pods, etc.) in and of themselves makes saving money difficult. The price of technology gives a new meaning to the latte factor. […]

  31. […] the moment rather than saving or investing it for the future. I’m sure you’ve heard of the latte factor.This last recession caused us to take a second look at where our dollars go. If you seem to be […]

  32. Jan Foselli says:

    I love the fact that you support your local coffee shop! We had a local one open up a few months ago, and about once a week or so, I stop by & pick up a coffee from them. It’s part of my ‘blow’ money & while I won’t keep them in business, I can send others their way.

  33. Ella says:

    I think it really depends. To me my nearly daily lattes (yes 4-5 times a week!) were not a treat anymore, it was just a bad habit I needed to break. I really don’t feel deprived at all. actually I am really happy I stopped buying them and save the money instead. But I wouldn’t do that with the things that truly makes me happy :-)

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    […] at My Broken Coin presents Live A Little: Have A Latte, saying “This is a new series I am starting on this blog. It is called Live A Little, and it […]

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