Well, for some reason it seems to be getting easier and easier to be separated from your hard earned cash. It may simply be that there’s just more stuff available to grab our attention. Or possibly that stuff is cheap enough in an isolated and immediate context that the eventual cost of the whole is difficult to perceive and account for at the time of purchase. It’s really only either in retrospect or when viewed on aggregate that you can see the impact over time.

Take the following (very) commonly cited latte example:

A couple of years back Source Magazine (I know, I know, but try and look past the fact that at the time we were shopping at Waitrose) published a side-bar article called “Bean There, Done That“:

Giving up that daily latte could help you retire two years earlier, beating plans to increase the state pension retirement age from 65 to 67 for today’s 35-year-olds. One study has calculated that putting the typical £2.40 daily cost of your coffee treat into a pension instead would enable a 35-year-old on £23,000 a year to retire on half earnings at aged 65, instead of 67. And 20-year-olds who forego one £1.70 espresso a day will get to their pensions target 3 years earlier.

Ignoring, if you can, the real cost of a latte, there are no shortage of articles happy to point out that giving up your latte will reward you with wealth beyond measure ad nauseam…

To us it seems like you should be able to have it all. Even in this age of creeping austerity strategies for negating waste, leveraging reuse and recycling, sharing with friends and family, should mean that you get your coffee. Either by reducing the overhead or by freeing up capital to pay for your habit.

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We won’t tell on you if you slip for a week or two. This a HowTo site not a MustDo. But if we can contribute to a more Frugal.You we’ll consider it a bonus.

More about the Latte Effect:

David Bach

The Latte Factor® is based on the simple idea that all you need to do to finish rich is to look at the small things you spend your money on every day and see whether you could redirect that spending to yourself. Putting aside as little as a few dollars a day for your future rather than spending it on little purchases such as lattes, fancy coffees, bottled water, fast food, cigarettes, magazines and so on, can really make a difference between accumulating wealth and living pay check to pay check.

Your Money

Saving the £2.40 a day that you may otherwise spend on a latte and putting that money into your pension could let you retire earlier. Andrew Partridge reports Many people in the UK face the prospect of having to work until later into their lives after the Government’s recent Pensions White Paper said that the State pension age for a 35 year old will rise from 65 to 67, while a 20 year old will have to wait until age 68 to claim State pension benefits.

Mail Online

A medium latte from a High Street coffee shop typically costs £1.89. Bought five days a week over a standard 47-week working year and this adds up to £444.15.

MSN Money

Someone who splurges £5 a day on fancy coffees or fripperies may not notice the money leaking away, but over a month they’ll have forked out £152. Over a year that’s £1,825. If, instead of making these small daily purchases, they invested the money monthly, it would have grown to £1,883 at the end of one year, assuming an average 6% growth rate. After five years the money would have grown to £10,613; after 10 years they’d have £24,816, after 20 years £69,258, and after 40 years £291,378 – all from giving up a few cups of dark brown liquid.

The Sun (not so much latte as a cuppa)

Assuming an average price of £1.50, you could sup 80 cups of tea for the same price. So if you work five days a week, 48 weeks a year, just giving up one daily latte will save you £360.