Here’s the thing: I don’t drink coffee. I can count on one hand the number of sips I’ve tried. It’s so repulsive to me, I cannot swig it down in a Frappuccino that is 87% sugar, 11% heavy whipping cream, and 2% coffee. I won’t even eat tiramisu, failure of an Italian American that I am. But the latte factor is real. In fact, it’s my biggest money mistake.
It’s Not Actually About Coffee
I never bought coffee. Tea, yes. Chai, so much yes. But even impulsive, 14-year-old Penny realized how absurd it was to pay $2 for a tea bag and hot water when I could buy the identical box of tea bags at Target for about $4. So I didn’t burn through a whole lot of money at coffee shops. Nope. My hunting ground was the mall.
Sale after glorious sale, discount after discount, coupon after coupon. If it wasn’t on sale, even better. That meant it was a brand-name designer who was too important for paper coupons promising an extra 25% off combined with a store credit card. But those were splurges…or Christmas presents (hi, Mom!). Shopping became my latte because I’d only spend $5, $10, or maybe $20 a pop. If I was really on a roll, maybe I’d spend $50 or $100 a week or every other week at the mall. And I never batted an eye. My dad objected, but his logic was no match for the Abercrombie and Fitch hoodie (middle school) or the clearance rack at Target (always).
To everyone who says the latte factor isn’t real, let’s do some math, shall we? I started babysitting when I was 12, and I got my first part-time job at 14. Industrious little shopper, I know. Let’s say my impulse buying crescendoed at age 15. That’s at least a decade of piddling away $20 a week. That’s $10,400. And in the event that my mom ever does find this blog, you should know that the only way my spending would have actually come out to $80 a month would maybe be that one month during junior year when I had impacted wisdom teeth removed and was too busy drooling on myself to shop. Realistically, I probably spent a few thousand dollars more. And that isn’t even on planned purchases.
It’s Insidious and Invasive
The most unbelievable part of this story is the fact that I was completely clueless. Just like the movie. I had no idea how much stuff I was amassing because I kept finding places to put it. Growing up, my closet exploded* into the guest room and the hall linen closet. If it was organized, it wasn’t a problem.
It wasn’t until I bought a home of my own and had to wrangle all some of my possessions that I saw it. I was 26 years old. I purchased an 1800-square-foot home with three bedrooms, 2.5 bathrooms, and a basement, and I sat in a pile of shoes in tears because I didn’t know where to put them. Tearfully, I told my husband that we were failed homebuyers because two people couldn’t live comfortably in this house. My house wasn’t actually too small for two people; it was too small for all of my stuff. But because consumer culture is everywhere and it celebrates excess, it never seemed like a problem. Until I was finally forced to come face to face with it.
It’s Hard to Break a Lifestyle
What makes this money mistake so awful is that it developed into a money lifestyle. I never had any illusions or delusions about driving around in a Porsche or purchasing a McMansion. I’ve known since seventh grade that I was going to be a teacher, for goodness sakes. Let’s be practical, Penny.
Meanwhile, I hung my money in my closet, nearly drowned in my clutter, and was none the wiser. Because that’s what society–or at least consumer culture–wants. Yes, we’re the land of the free but, let’s be real. Our focus is on the fact that this is the land of the free gift with purchase.
I had adopted a lifestyle that wasn’t making me broke. I never amassed any consumer debt, so it wasn’t hurting me in obvious ways. But it wasn’t helping me either. I was essentially treading water. And you can only tread for so long. That’s why people sink into credit card debt. There’s no so thing as a reasonable impulse buy. The truly devastating part is that this bad habit evolves into a way of living, a way of defining yourself. And how you and how you define yourself are hard things to change.
There’s this old cliche about small leaks sinking great ships. That’s certainly true. It’s not just that small leaks get bigger even if you can’t see it happening. It’s that small leaks get bigger especially when you don’t see them. So to everyone who says the latte factor isn’t real, that $10 to $20 every week isn’t going to make a big difference, tell that to my closet.
*Your closets are finally empty, Mom. Thank Poshmark.
So Tell Me…Would you believe me if I told you those photographs were only heels and flats? Care to share one of your money mistakes?
Vicki@Make Smarter Decisions
Wow – this is a GEM! I hate the posts that say the latte factor doesn’t matter. You just nailed it here. “The land of the free gift with purchase” is so true – and sucks people in. And your analogies at all levels here – treading water and sinking ships are spot on too. I’ve bought a few houses that may have been money mistakes (we’ll see how things eventually turn out). The number may be different but the scale is different too! Many small purchases that can sink you or one big one – both can be a real problem.
It’s always fascinating to me how many people want to deny the latte effect and go after new cars. Look, if I did $11k in shoes and cheap clothes, brace yourself when you hear about my planned purchases (ahem handbags). It ALL makes a difference. Debt is debt and spending is spending. Every time you spend money on something, that’s money you’re not saving or investing!
It is ONLY $3.75 or $4.99 but hey, if you spend it every single day, it surely adds up.
Matt @ Optimize Your Life
Thanks for this. I find too many people take the latte factor too literally and just try to cut out coffee, while allowing the small leaks to occur everywhere else. (I also am not a coffee drinker).
My latte factor was in buying lunch at work. It was a break from the office and, hey, I was only there because I was making money anyway, right? It adds up quickly, though. Even on the cheap end you quickly get to $25 per week. Most weeks were probably closer to $50.
It’s very easy in this culture to have a blind spot in your spending, especially with these little but frequent purchases.
That’s such a solid way to state it, Matt. They are blind spots!
Claudia @ Two Cup House
I’ve been there. Cheap shoes and clothing on sale? I’d shop these sales and spend hundreds at a time thinking I’d need to replace slightly worn items. And we had the space before, so why not have some options? I wrote about how much we used to spend on clothing last July. For the four years prior, we averaged $157 per month. Yep. Latte effect.
I’m glad I’m not alone, but I’m also really sad I’m not alone! When I think about how long this was a source of pride in my life, I get all the feels. And they’re not good ones.
I’m “lucky” in the fact that I hate shopping. I like clothes and shoes but get really stressed out and overwhelmed when shopping. Most of my clothes were given to me by friends or purchased at garage sales, lol. I also frequent a second-hand consignment store that has some nice stuff.
I am dying to find a consignment store that has nice items. Whenever I think I’ve found one, by my next visit, it seems like a different place! I’m better off staying out of stores. Even if I’m not trendy anymore, I’m going until I wear this stuff out of can’t wiggle into it anymore!
Buying lunch at work and going over my data plan so consistently it’s ludicrous. I’m working on taming them.
That’s awesome! Because I do lunch duty, I can’t go out for lunch. I have a few coworkers who buy from the cafeteria but…yuck. I need to do something with my cell phone plans!
I moved from an industrial zone where it was not worth it to drive for lunch to down around EVERYTHING. I go through spurts of being a meal planning goddess and then I fall off the wagon – hard. I need to tweak my expectations of lunch i think . OR keep supplies at work.
Tweaking my expectations of breakfast and lunch saved me a small fortune. I eat oatmeal every day. And then I either eat PB&J or a hard boiled egg and salad for lunch. I mix it up with fruits or veggies as sides. But I don’t know why I always felt like I had to have a different lunch every day. I *love* PB&J. So why wouldn’t I want to eat it? 🙂 I think you find what you like and go for it. Then, change it up if you get sick of it!
So many shoes! I think I own like 5 pair. I’m such a bad shopper. I wait until I absolutely need something to buy it and then I can’t find what I want. I bought $60 flats recently because of this and I hate them. What a waste.
For some reason when I’m shopping, my brain thinks special occasion, even if I’m trying to buy everyday clothes. Nearly every thing I buy is too fancy for everyday life. Thankfully for the most part, I’ve stopped buying like that. But it is still my urge.
Shoes that don’t work out are the worst. I mean, most of it I brought on myself by buying pairs that I knew I wouldn’t wear. 5-inch heels don’t really mix with teaching. But when I genuinely think I’m buying something sensible and it doesn’t work out, I get so annoyed with my feet!
Emily @ JohnJaneDoe
Yeah, the latte factor is about a lot more than coffee.
Mine is the book factor. Even now, even with regular library usage and free book emails, books are my downfall because there’s always something else I want to read. (Working in used books where I could pick them up cheaply didn’t help) Plus, ebooks don’t take up any room so it’s easy to lose track of how much I have.
I worked in a bookstore, and I thought I was basically doing my duty as an English undergrad and then a teacher to buy them all. Wrong! 😉 I’m glad I haven’t gotten into e-readers in a big way yet because I bet that totally sneaks up on you!
I’ve started buying more expensive items recently, which makes me pause more before purchasing and make sure I really want the item. Also, free isn’t really free if I’ll never wear it because closet space is valuable. I’m really proud of myself for returning my entire Stitch Fix each time – I hated every item or it didn’t fit. So after two, I’m giving up.
One of my coworkers keeps trying to get me to use her Stitch Fix link. I’m almost out of polite reasons to decline! I like your point about buyer nicer quality/expensive items. I’ve always done that with handbags. It definitely took the impulsivity out of it. I still used to do it excessively, but I really had to be more strategic!
Amanda @ centsiblyrich
This is such a great example of how the seemingly little things can really add up over time. I don’t like to shop at stores, per se, but like thrift store and garage sale shopping. For years I would buy junk and extra (nice) clothes at sales just because it was “so much cheaper” than buying retail. Thankfully, I’ve since de-cluttered and found more peace and time with less shopping and less stuff.
That cheaper is better mentality is such a hard trap to escape. It’s basically my entire relationship with Target and those dang clearance stickers!
Latoya @ Life and a Budget
I’ve heard plenty of naysayers say the latte factor isn’t real, but honestly I think that’s because of denial. We all have a clue as to where our money is going when people ask. It’s just a matter of being ready and willing to do something about it. My latte factor is anything sweet. I do not want to track my spending for the past year for fear of slapping myself when I see how much I’ve spent on candy, cake, and ice cream.
Oh my gosh, yes! I used to have so many latte factors in my grocery cart. I’ve dialed it back a bunch, but I know I could curb more. Great point, Latoya!
HOLY SHOES! But hey, at least you’ve recognized your latte factor before it’s reached a level in which TLC could make a new show about it. I definitely used to do the same things at the mall, but with jeans. I think at one point I had over 70 pairs. I mean, who wears that many jeans?! No one.
Oh, jeans! My whole closet (closets?) is out of control. But I can’t claim nearly that much denim. Glad I’m not alone in the reformation 😉
Gwen @ Fiery Millennials
I think video games and food are my problem areas. I’ve really toned down the former since I recognized I don’t really have the mental energy to play after work.
Food though…. Having a cafeteria at work is the death of me. Oh it’s only $5 and today is Taco Tuesday! Or crap I’m running late I’ll just get something at work instead of throwing a lunch together. Sigh. It’s a never-ending battle.
I would be in SO much trouble if our cafeteria food was good 😉 It’s not that it’s bad necessarily. There’s just nothing particularly tempting to me. Now, the pop machine in the teacher’s lounge is another story. I had to stop carrying change on me for that exact reason!
Matt @ The Resume Gap
Powerful post. You were on pace for Imelda Marcos status with that collection! It’s a great example of how that slow leak of money leaves us financially worse off — and not necessarily any happier for it.
My grandma used to call me Imelda as a joke. Oof. I’d be lying if I said that I don’t actually have a handful of happy memories revolving around shopping. However, this was just plain excessive. So many other ways to spend time and money building memories. Less blisters too!
Those ongoing lifestyle habits can add up to be so substantial. We use to spend $1200 a month on food (from the grocery store!). It took 2 years but we have learned to cook more simply and changed up most of our menu. Now we average $400-600, which is darn good for 7 people. Although there is less blue cheese in my life, there is a lot of other fun and awesome things. Like I am totally going to be rocking out at a Brandi Carlile concert tonight with a friend! And to think I could do something awesome like that 6x a month with just our food savings. =) Although Mr. Mt would probably NOT be up for wrangling all 5 kids while I concert hop if it was every week. =)
Ha! I love that perspective. I think I could swap some queso for a concert or two. And I’m super impressed. I feed 2 people for $200. You’re kicking our butts!
Gary @ Super Saving Tips
The latte factor should not be taken literally and you’ve proved it right here. But the other interesting thing is that you’re talking about purchases made when you were young, in your formative years. That really sets up a precedent that’s hard to escape.
Yes! It became a lifestyle. And because it was (is?) a lifestyle for so many, I didn’t even recognize that some people don’t live like that.
Revanche @ A Gai Shan Life
It’s REALLY hard not to buy all the e-books where it’s become easy to rethink (several times) any other physical purchases. But I always lie to myself and say “it’s not allowed until [something side money pays out]”. Since none of them have been very lucrative, the lie still works 🙂
I have to admit to a certain level of awe looking at the shoes picture though, in not the way you intended. Pretties… so pretties….
“Luckily,” we have next to no closet space and my old bones can’t do any heels anymore. Physical constraints are sort of awesome for forcing you to be mindful. Well, just like you discovered with your new house!
They were so pretty! Sometimes I scroll through my sold listings on Poshmark and admire them. HA! I really couldn’t even wear heels at work. They don’t go well with standing for ten hours…or lunch duty with Jello on the floor. I like your not until _____ trick!
We are a nation of hyper-consumers, and as you note, often the consumption is insidious and invasive. The truly terrifying part is that is what our system demands in a way. What most people don’t realize is that 3/4 of economic activity is consumer spending. Combine that with the fact that ‘debt’ is what makes our banking/finance systems function. The sad reality is that as much as government officials and those in the banking/finance industry talk about saving, that is the last thing they want. They want us to spend, spend, and spend a little more. And when you get tired of spending, they hope you reach way down deep and spend just a smidgen more.
The small normalized purchases we make without thinking hurt the most. My coworker takes home 4000+ a month and does not pay rent, but cannot figure out where her money goes. I could tell her what I’m seeing, but that is not my place. Hopefully she’ll figure out her latte factors soon and start saving.
Francesca - From Pennies to Pounds
This is SUCH a fab post, you clever thing 🙂 love it. At least you have now realised your mistakes, some people carry on living in denial about their bad spending habits.
I don’t know what mine is. Hmm. I’m pretty frugal now but in the past even when I was spending lots of money on clothes etc I would always sell them on eBay. I actually can’t think of anything! Maybe I’m in denial, lol.
Nope, you’re probably just a lot wiser than I wise, Francesca!
My weakness used to be the awesome thrift store down the street. I was getting good deals, buying used, and saving the environment. What’s not to love?
But it was a lot of stuff I didn’t need and it just created clutter. The store closed a year and a half ago (maybe I didn’t shop there enough?), so it didn’t even take any effort or willpower on my part to cut back. I’m not sure what would have happened if it stayed open…