The Latte Factor is simply the idea that frequent, small dollar purchases add up quickly. We don’t notice them because the purchases are small, like a $3 cup of coffee each morning, but over the course of the year that adds up to serious money. This is nothing new but something to seriously consider and it does not always have something to do with coffee.

I have really been looking at this in my life. What are my purchases that seem so small but add up so quickly?

Confession: Everyday after I leave the gym I swing through the very convenient window at the gas station and get a 32 oz Diet Coke and a “Bug Juice” (10oz flavored sugary drink) for my son. It costs me $2.26 each day. Wow! I go to they gym 20 days a month — that’s over $40 a month! I would be much better off to make a 2 quart package of Kool-Aid and refill an empty Bug Juice bottle — I could get 6 bottles for PENNIES rather than dollars. And what about my Diet Coke? Of course I would me MUCH better off if I just stopped drinking it – but I could could also buy a 2 liter at the grocery store and use the empty bottles for water storage….

Consider the money your family may spend on eating out. Sure it is easy sometimes, but with a little planning you can really save money and improve your health by planning and preparing your meals at home.

Think about what you could do with the money you can save by just redirecting a little bit of the money we are spending each day.

To reveal your Latte Factor, get a notebook and carry it with you for one day. Write down every penny you spend, including cash, checks, credit, and debit cards. This may seem simple, but this exercise can be life changing.

You can invest in your future
Pay off debt
Plan a vacation
Replace the washing machine that is on it’s last leg

What would you do?