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What is “The Latte Factor”?
Posted on May 28, 2008 at 11:11 am
Filed Under Financial Planning, Investment Planning, Retirement Planning
You have heard me reference David Bach many times, and this post is no exception.
Bach is the author of “The Automatic Millionaire” which is a National Best Seller. His primary premise is to make everything automatic from your retirement savings to your dream savings. Before doing that however, he recommends that you walk through his process that he calls “The Latte Factor”. Simply put, Bach encourages you to track every penny you spend in a day from coffees to periodic lunches to groceries and then evaluate the amount of money that was not necessarily urgent. In other words, determine what your latte factor is by defining how much of your daily and/or weekly spending you can start saving instead of spending on non-essential items.
Your Take-Away: I’ve included a link directly to the “Latte Factor” because I believe this is an extremely useful exercise for anyone to walk through. In fact, both my wife and I have used it before and will be using it once again in the very near future. There is no question in my mind that if you follow the instructions, track everything you spend and then simply sit down and review what you could have lived without, you will be shocked at the money you could be saving if you truly wanted too.
If and when you take advantage of this very useful tool, please do let me know what it works out for you and what you thought of the exercise.
Until next time, have a Wonderful Wednesday!
Chris
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