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!
If grade school taught us one thing other than to always
share it was that there are 52 weeks in a calendar year. One thing it didn’t
teach me was how to effectively save and budget my money, so now that I’m older
I love hearing {and sharing} operative and simple ways to budget. Most recently after my return from our holiday
hiatus I spent some much needed time catching up with my office go to gal {yay Verna!}
who got me up to speed on a little 52 week savings plan she had put to order
for the new year! After some chatting and a little web surfing as on the how to
of putting this plan into action, I found it actually quite simple and kind of
fun if you ask me. While we are not sure who the original author or creator of
this little plan is I have noticed around the web peeps referring to it as the
52 Week Money Challenge. I like to think of it as 52 weeks to my 2014 Oh S#*%
Account. The simplicity behind this plan is such; for 52 weeks beginning with
week one you put money away each week. The weekly dollar amount directly corresponds
to number of the week it is. For example, week one you put away $1, week two
you put away $2 and so on with the maximum amount you will be putting away in a
single week is $52! Check it out below!
So if you take a look at the Account Balance that corresponds to week 52 (bottom right corner above), assuming you stick by the plan come December of this year you will have $1,378.00. I'm not suggesting that this be the only savings you do throughout the year, but this is a fun and simple way to have a little cushion after the holidays going into 2014! Whether you plan on saving each week just for yourself or you decide to put away for you and your children, grandchildren, significant other, brother, sister etc. who wouldn't want $1,378.00 extra?! Get creative with this, save in jar, save in a safe, only make a bank deposit every time your balance hits $100.00 execute this savings plan in a way that works for you. Maybe even use it as a learning tool for your kids and get them started early teaching them saving is not only important, but fun too! Not to worry, its not too late to start, we are only coming up on week 5 so if you put away $15 today you're already caught up! Happy Saving!
The holiday months can often times send you into somewhat of a spending bender if you
know what I mean… and what better antidote to your empty feeling pocket books
than a No-Spend-Month (In my case I'm working on 3 consecutive months of this,
within reason) Its not always easy being mindful and disciplined about the
money I spend, so during this No-Spend-Month/s which is basically short for “No
Spending Except For Basic Essentials” I will not be spending on
anything non-essential. Non-essential meaning things like:
Clothes/accessories
Personal Training
Electronics
Lunches/Dinners out
Online Purchases (Guilt, Amazon)
iPhone apps, iTunes, lottery tickets and any other $1-$2
finds
Manis & Pedis
Starbucks & Pete's
So for the next month while I’m shopping my very own closet
to recreate “new” outfits and giving homemade gifts & cards or offering my
services for those of you with upcoming birthdays I am hopeful that I may just
find that keeping track of the amount of money I’m saving (toward a specific
financial goal) is motivation enough to stick with this spending diet for more
than just 30 days.
I plan to give myself a budget of $100 per week and this
money can only go towards essentials! By no means am I trying to deprive myself,
but more so help myself reconnect with my $$ so I am able to learn to further value
and appreciate every single dollar. I will only allow myself to dip into this
$100 on designated spending days (which for now will be Wednesday, Saturday
& Sunday) By creating designated spending days I will force myself to plan
out my spending meaning I will have to know what I need to purchase and wait
until a spending day to buy it. I am confident that this will eliminate cashing
out for foolish items and actually having to wait for that chap stick/lip gloss
I was trying to convince myself I needed on a Monday night, come Wednesday (a spending
day) I most likely will have forgotten all about it. I plan is to allot my $100
budget towards the following:
Groceries & eating out (occasion based)
Gas
Household items (paper towels, tp, light bulbs, toothpaste
etc.)
Entertainment (like I said not trying to deprive myself)
There are a ton of 30 day no spend month challenges all over
the blogsphere so looking to google and
my fellow bloggers for tips and/or inspiration won’t be a prob and should you
also get a wild hair I would like to suggest the following:
growing slower
bankrate.com
And with food in my fridge, gas in my car and my bills and rent paid for the month thus far let
the spending hiatus begin…
