Linda Chavey writes about how to change your lifestyle habits in order to eliminate debt.
One of the things I find fascinating is the obsession with gourmet coffee. When you watch some of the people coming into a Starbucks coffee location, they have this dire need look on their faces. They are "hooked" on the thought of the Starbucks coffee and the taste of it and they believe the need it.
I was going to a health club early in the morning and there is a Dunkin Donuts close by. I could not believe how many cars were in the parking lot. It was hopping with business and there were over 10 cars in the drive-thru.
Honestly, I am not that patient to sit in a line with more than 10 cars for a cup of coffee. I like to grab and go and making coffee at home is a perfect solution. Set up the coffee machine and go do your thing and in a few minutes, it is ready.
When my parents were growing up, they used a percolator and made their own coffee at home. This was and still is the best way to make coffee. It is inexpensive, you can control what is going in it and you do not have to waste gas driving to the nearest gourmet coffee store. It is also interesting to note that the flavored or gourmet coffees are not a want anymore. People have these on their "needs" list. They do not just "need" coffee, it must be a particular brand or flavor. This has decreased our disposable income that we need to have available for other expenses.
I attached a link from another favorite debt author, David Bach. He has a Latte Factor calculator. (see very bottom of post)
If you spend $5 a week at a gourmet coffee location (you can actually apply this to anything you buy on a consistent basis that is not "needed"), you enter the dollar amount in the first field, choose "weekly" for the second field, pick a reasonable interest rate for an investment (I chose 6%) and the number of years you would hold that money in an investment (I chose 20). The amount for a $5 spend on a weekly basis with a 6% return with that money being held for 20 years is $10.138.11. That is the amount that is possible to have for future purposes.
This is the Latte Factor for spending $50 a week on restaurants:
Try the Latte Factor Calculator
|Enter the dollar amount you would like to save/invest periodically.|
|How often will you make this contribution?|
|Enter the annual rate of return you expect to earn.|
|Enter the number of years the investment will be held.|
Your Latte Factor savings could accumulate to $101,381.09
That is a lot of money!! Food for thought here!
Link to Latte Factor: