Back in the day, I would wake up, have a shower, make a measly attempt at doing a little bit of work and then head out to grab my morning coffee. I live in Leichhardt, the Italian hub of Sydney, so grabbing a morning coffee is more than it sounds. It’s a ritual, the centre of our little community.
From about six, my favourite café is crowded with Italian men commenting on the ceaseless football on the television screen. Students and writers cram into corners and type desperately away at their MacBooks.
Families stop off before school and work, the serious father having his serious short black and serious daily paper, while the kids sip on their babycinos and draw crayon on anything that stays still long enough.
Where I live, the daily cup of coffee is a big deal
But then I started to realise that I wasn’t quite managing to live from pay to pay. Every personal finance blog I read told me that saving wasn’t possible if I maintained that little habit of mine. The Latte Factor.
The theory that if you cut out that one coffee a day, you’ll end up saving a couple of grand a year. Over 40 years, you’ll have saved a million dollars.
A million dollars is a big deal. So, for four weeks, I lived a miserable existence. I cut the morning coffee, and went to the library instead. Well out of the way of being tempted by well-brewed cappuccinos and sugary Italian cakes, I managed to save a couple of dollars a day. But I was also one sad chicken.
So I did my research. A bit like Bridget Jones, who is on so many conflicting diets at one time, she can eat whatever she pleases; I found myself a theory that fixed my conundrum.
It comes from one of my favourite finance bloggers, Man vs Debt, and has the very erudite title of ‘The Shit that Doesn’t Inspire You’ factor. His idea is pretty simple. Spend your discretionary money on the things you care about. If that’s a morning coffee, then go for it. If, on the other hand, you’re spending money on a coke at 3pm every day and it makes you feel worse, cut the habit. It’s the same old chestnut again and again- stop and ask yourself if this next purchase really matters to you.
I guess I should own up at this point. I’m writing from my favourite café. I’m one of the idiots crammed into a corner, typing desperately away. I’ve decided that my morning coffee ritual is the stuff that inspires me. So I’ve eliminated a few other factors into my life in its place.
The Eating Out Factor was replaced by being organised enough to make my own lunch in the morning. The little-used Gym Membership Factor was replaced by going for early morning walks and swimming at the local pool. Instead of buying a CD a week (otherwise known as the Stay In Touch factor) was replaced by listening to music online for free (at www.spinner.com) or turning on the radio.
Savings isn’t about making life a misery. It’s about working out what little luxuries you can live without, and maybe the one or two luxuries that you need. It was a soul-searching four weeks, but luckily I was welcomed back with open arms. All I can say, is I’m glad to be back.
What inspires you?
What are some of the factors you could remove from your life to save money fast?