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Will Drinking Fewer Lattes Really Improve Your Finances?

Will Drinking Fewer Lattes Really Improve Your Finances?

For many working folk, that $4 morning latte is more than just a pre-work caffeine fix—it is a sort of reward to oneself, either for making it out the door in time to stop at the coffee shop, as a treat after an early morning workout, or maybe for simply getting out of bed at all. Whatever the excuse we make to splurge on expensive coffee, that little cup acts as a symbol of our working selves, in a way, and of the sacrifice of eight or more hours of our lives each day to our jobs. Unfortunately, it is also symbolic of the many unnecessary ways we find to waste money and stunt financial growth in our daily lives.

A common bit of financial advice over the past few years has been to reduce the number of trips to the coffee shop, but people often wonder if cutting out the grande vanilla lattes can really help get their finances on track. Aside from looking at the amount of money saved by not going to Starbucks or your local café on a daily basis, how can cutting one everyday expense change the way we think about our budgets?

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Cutting Out Needless Expenses

First, let’s look at the obvious: fancy coffees such as flavored lattes and cappuccinos can cost upwards of $4 a pop at many chain coffee shops, and if you add in those tempting pastries, you could be dropping $7 before you even get to the office. For those who make this a daily habit, that’s anywhere from $20 to $37 a week! Squirreling that money into a savings account instead could get you an extra $960 a year (and that’s on the low end) to put toward a mortgage, new car or a vacation. In his Lifehack guest post, Charles LaReaux explains how you can save $18,000 over the lifespan of your mortgage by cutting out a $3 cup of coffee each day. If your caffeine habit calls for pricier drinks, imagine how much more you can save by quitting!

Aside from the savings on the coffee itself, however, cutting out one needless expense may just change the way you look at your spending as a whole. Realizing that survival is possible without a daily mocha, many come to see the other non-essentials eating up their paychecks: trivial everyday expenses like eating out, paying for cable television and buying only name-brands waste hundreds of dollars a month. Becoming frugal in one aspect of life may inspire a re-examination of your spending as a whole.

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Find Cost-Effective Alternatives

Discovering cheaper alternatives to getting a caffeine fix can lead to finding cheaper ways to provide many daily rituals: making coffee or tea at home saves a bundle, with a pound of whole or ground beans costing as little as $10 and a box of 25 black or green tea bags running as low as $5. That’s nearly a month’s supply of caffeine for what you would spend in a day or two at a coffee shop.

The same savings apply to entertainment and groceries. Monthly movie streaming services like Netflix cost under $10 a month, which is less than the price of one movie theater ticket, and far less than a monthly cable bill. Buying non-perishable groceries like rice and paper goods in bulk is often much cheaper than paying for smaller packages each time you hit the store. When at the grocery store, look at what items you are spending the most on: buying fewer pre-made, name-brand items and meat can reduce your bill significantly, and you’ll find that fresh produce and other whole foods are much cheaper, not to mention much better for our bodies.

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There Are Long-Term Holistic Benefits As Well:

Speaking of the health and budget connection, cutting out fancy coffee drinks may also improve your health, thereby reducing costly medical bills in the future. Not only are caffeinated beverages contributors to increased heart rate, insomnia and heartburn, expensive designer coffees like lattes and mochas are packed with extra fat and sugar, adding unnecessary pounds and increasing risk of diabetes. As Lifehack writer William Masters points out, cutting out certain dietary and habitual vices does not just save money on the items themselves, but also reduces the associated health risks and costs that come with them—things like cholesterol medication, insulin and surgeries. Remember that the more health conditions you have, the higher your insurance premiums will be.

Having said all of that though, think of ways to make the real behavioral changes automatic. Contribute to your company’s 401K straight from your paycheck so you don’t have to exercise the willpower to save each month, and set aside automatic savings in a separate account which you don’t have easy access to. Willpower is finite, and while resisting the daily latte helps, don’t waste your willpower on small tasks if you can put it to better use to effect meaningful change.

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Featured photo credit:  latte on a wood table via Shutterstock

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Last Updated on March 29, 2021

Life Insurance: A Secure Way To Protect Your Future.

Life Insurance: A Secure Way To Protect Your Future.

Life is a journey full of ups and downs. No one can actually predict what might happen the next moment; there are times where the happiest moments do not even take a second to turn into the gravest. Planning for your future can help you face such unwelcomed but irrepressible situations with much ease. We all want to make every memorable event of our life more special and to cherish all those moments happily and worry less, you must financially plan your future. But no one has control over life and death. Who would wish to see his family suffer in his absence? Insurance hands over the financial jeopardy of life’s happenings to an insurance company.

Importance of getting a life insurance

No one has control over life and death. Nobody would like to see their family suffering in an absence, and that’s why many people recommend life insurance. A life insurance plan is one of the best ways to secure the future of your family, even against those financial troubles after an untimely demise. These plans are safe and credible, and you could trust them for your family’s better future.

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On the other hand, a life insurance policy is a contract between a company (insurance provider) and policyholder in which the insurance provider ensures to pay a certain amount of money to the nominated beneficiary in case of the policyholder’s death during the term of the agreement. There are different types of insurance plans, and it is important for you to know the benefits of those plans such as a funeral, medical or some life expenses provided they are mentioned in the agreement.

Choosing the right insurance plan

If you’re about to select an insurance plan, you should consider some important factors:

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  • The time at which you start investing in a program and the number of family members you want to get insured. Obviously, a married man with two children has different needs compared to a single one. The number of persons who are dependent on an individual also varies from person to person.
  • The next thing you need to consider is you and your family needs. What are your child’s dream, your retirement plans, for how long would your dependents need financial support, any personal injury, etc. And do not forget those events or situations that will surely demand a huge sum of money.
  • The next thing one must consider is your current income. You should preferably choose a plan which you can afford.

Now you must be having a pretty clear idea of how to choose the best plan for you. Further, you should also compare various plans offered by different companies and numerous sites available online that help will you to compare them.

Differences between life insurance plans

Here’s a short brief of some plan categories you can choose according to your needs:

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  • Term Insurance Plan – You have to pay once, and your nominee gets the paid money under your misfortune demise. It ensures a person for a fixed time. If you survive the policy period, you do not get your premiums back.
  • Whole Life Policy – This plan continues for your lifetime. Under this, the policyholder has to pay regular premiums, until their death.
  • Endowment Policy –  In case the individual dies during the tenure, the beneficiary gets the amount assured. If the person survives the policy tenure, they gets back the premiums paid with other investment returns along with several other benefits.
  • Money Back Policy – In this a portion of the money invested is returned to the investor at regular intervals. If you survive the insurance term you get the entire amount back; else the beneficiary receives the entire sum assured.
  • ULIPs – These are the life insurance plans that offer you future security plus wealth creation options.

Many people do not opt for whole life policy and endowment policy because of the high amount of money you need to pay, while others may prefer to opt for these if they have a high life expectancy. Surely you will find the best one for you.

So what are you waiting for? Plan for your future and live a happier and carefree life today.

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Featured photo credit: aryehsampson.com via aryehsampson.com

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