The Latte Factor

We all have one and we don't always know it.

What is a latte factor? It is those items that we buy on a regular basis that are completely expendable and add very little to the quality of our lives. It could be a latte, cappuccino, DVD, chocolate bar, shoes, lottery tickets...

So how do you discover it? Start carrying a notebook with you and write down every single expenditure and withdrawal of money. That also includes every cheque you write and every card you swipe.

How long should you do this? Keep it up for a week, preferably for a month. Then, get out a calculator and take a total. Multiply this sum by either 52 or 12. That's what it costs to run your life.

Next, got through and highlight the essentials, i.e. mortgage, utilities, car loan, insurance...
And, take a close look at the remaining items such as clothes, magazines, snacks, DVDs...

You are now ready to make a decision about your spending habits. Do you really need to spend $3.25 at Tim Horton's each day of the work week? That easily adds up to over $800 a year. Take a few minutes and calculate the annual cost of your latte factor.

Remember, money talks and what it is saying speaks volumes about you and your lifestyle.