How many people go out each morning and hit Starbucks on their way to the office and get a latte or cappuccino? Lots of them! Unfortunately I don’t remember where I heard this but I’m pretty sure that someone was quoting a book (feel free to let me know if you know it), but a latte a day can be the difference between being a millionaire or not. And I’m not talking about the $4.50 that you’re missing to put you over the edge.
Doing something as simple as cutting out a latte a day from your spending and saving that money can make a huge difference to your finances over the period of a year. Say for example you buy this proverbial latte every working day (or about 250 days a year), at $4.50 this will translate into having set aside $1,125. If you were to cut out a latte everyday for the whole year it translates to $1,642.50.
Before we get into the discussion of liking your latte in the morning or ‘but I don’t drink coffee’ the point that keeps hitting me when I see these numbers is that to save $5 per day isn’t all that hard but over the length of a year. I like to remind myself of this little equation every so often because cutting down by such a small amount can make such a huge difference over a year that it helps me be a bit more frugal. I don’t know if I manage to cut down $5 a day but I think I might have to start literally setting aside $5 a day into an emergency fund just to watch it collect. It demonstrates the power of frugality to me and its a good reminder to have.