Tuesday, May 12, 2015

Automatic Millionaire? Know Your Latte Factor!

Everyone has a Latte Factor whether they want to admit it or not. If you are unaware of what the Latte Factor actually is, while somewhat of a misnomer as it pertains to more than just lattes, it amounts to the small trivial things we spend on everyday that can add up to an extremely large amount over time. Recognizing your latte factor and how much its actually costing your future will ultimately help you see the importance of changing the very habits that we act on and maybe even become an automatic millionaire. Currently there isn't one thing in particular in my life that I can call my Latter Factor as I am actively working on changing my spending habits. However not to long ago (less than 2 months ago) I would admit to gel manicures being my vice... There is a reoccurring misconception which I have come to realize after reading The Automatic Millionaire and that is that people often think building wealth is a function of our income, when in reality it is more so directly correlated to our spending habits (Check out more about this here)!  Lets do the math as it relates to Gel Manicures. I will throw in the pedicure as well because who doesn't opt for the mani pedi combo!

The average Gel Manicure last 2 weeks which means you typically find yourself at the nail salon twice a month. The average cost of a gel mani is about $25 and with the gel mani pedi combo a trip to the salon will typically land you at $55 per visit plus tip, so lets say $65 per visit total.

Gel Mani/Pedi = $65

Gel Mani/Pedi Cost Per Month = $130 (approx pending 4 or 5 weeks in month) 
Gel Mani/Pedi Cost Per Year = $1,560 (approx number) 

$1,560 per year... and that is just around your mani/pedi combo. Un-chipped nails and pedicured toes are an important part of working girls life, I get it and I wont lie, I love a good mani pedi from time to time! Just think about what you may be over spending on and sit down and do the math. Maybe it is a latte a day, or eating lunch out Monday through Friday or frivolous spending online shopping... I challenge you to find out your latte factor and see how much you could be saving. 

It really comes down to what you're saving for and setting a goal to make it happen. I've talked about it in the past re a simple savings trick throughout the year in 52 Weeks of Saving!

While the tone of the book seems to be "Cut out the $4 latte and you will wind up rich" which is a bit far fetched if you ask me and has even caught some heat around the web, knowing what you're excessively spending on or what your spending habits are is helpful nonetheless. If you want to know more about the Latte Factor I'm talking about, I recommend you read The Automatic Millionaire you will learn all about how to pay yourself first and more! 

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