Leveraging The Latte Factor

I really love lattes.

I know these deliciously decadent infusions of caffeine have come to represent everything that’s wrong with our personal finances- overindulging, spending on wants over needs, unnecessary outsourcing, convenience, etc. – but I love them anyway. And while I’m able to restrain myself from unnecessary five-dollar gourmet coffee treats most of the time, I admittedly cave with frequency – enjoying every sip.

As of late, my taste for caffeinated indulgence has been on the rise, along with frequency of similar small splurges – happy hours, lunches-on-the-go and other classic “latte factors”.

What Are Latte Factors?

For those of you not up to date on the personal finance lingo – the latte factor is the idea that small, habitual spending splurges (like lattes) accumulate to large amounts over time – amounts that could otherwise be used for savings, investment contributions and the attainment of (arguably) more valuable financial and personal goals.

More than money, I’d argue that the latte factor is about mindfulness – consciously assessing the value of purchases to ensure that spending choices remain in alignment with long-term goals and priorities.

By that reasoning though, the rising regularity of my “latte factor” is anything but…

Not all Lattes Are Created Equally

Where lattes may have simply served as a way to satisfy my sweet tooth and energy needs in the past, they’ve recently evolved into a more powerful tool – adding far more value than a fleeting sugar high.

I’ve been leveraging my lattes to make valuable career advancements.

Leveraging The Latte Factor

For example, an afternoon nursing a dirty chai at my local coffee shop is a lot cheaper than paying rent on a dedicated office space. That five dollars not only buys me an afternoon pick me up, it buys me productive time free from the distractions of my home, during which I can complete work that will earn me hundreds.

In addition to fostering productivity, lattes and lunches also serve as powerful tools in promoting connectivity – meeting with people to talk entrepreneurship over margaritas or media opportunities over lunch specials – often opening doors to new earning potential. Sure, my spending on these traditionally considered “splurges” is higher than ever, but guess what, so is my income!

The benefits of my discretionary spending have become exponentially greater than the costs. By turning small splurges into great opportunities, I’m leveraging the latte factor in a way that makes sense for my finances and my goals. Having my cake latte and enjoying it too!

 

This article by Stefanie O’Connell first appeared on The Broke and Beautiful Life and was distributed by the Personal Finance Syndication Network.