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The Latte Effect
After weeks of nail-biting suspense, Starbucks has finally released the list of the 616 doomed stores it will be closing this year. I got a little teary-eyed when I found this store in Austin on the list. It was a frequent caffeine pit-stop for me. But then I got to thinking about what that little cup was costing me. I did the math and, at $4.56 per cup, realized I was spending an appalling $1,664.40 on coffee a year. This was my first real, concrete experience with the horrifying “latte effect.”
While the term “latte effect” really describes any small but frivolous expenditures which can add up to a hefty chunk of your paycheck, in my case the culprit literally was a latte. I had complained about gas exceeding $4 per gallon, while gladly forking over what amounts to $82.08 per gallon for my sugar-free hazelnut soy latte. Such an extravagant expenditure hardly seems justifiable on a student’s tight budget.
Now, as most American families are tightening their belts to deal with soaring gas and grocery prices, it’s a good time to take a look at your own little “lattes” and their toll on your wallet. But for some of us, life can be truly unbearable without these little perks. Luckily, even if you aren’t able to completely eliminate your little weaknesses, there are ways to reduce the damage they do to your budget. Check out Colin’s post for tips on how to cut your spending habits. And here are a few of my own:
Starbucks
If your favorite beverage contains lots of “extras” (flavored syrup, soy milk, etc.), you can knock a lot off the price with Starbucks’ new gift card program. I buy myself a Starbucks gift card, sign up for Starbucks Card Rewards on their website, and get all my beverage extras for free. Forty cents per extra may not seem like a lot, but with my highly customized beverage, I save $292 a year. By registering your gift card online, you also receive other benefits, including 2 hours per day of free AT&T Wi-Fi.
Eating Out/Ordering In
After experiencing sluggish business, many restaurants are offering special lunchtime deals or cheaper menu options. If you frequently dine at the same restaurants, take advantage of any “buy X sandwiches, get the next one free” deals. If you’re ordering in, use seamlessweb.com to find good specials on delivery. The website allows you to scroll through restaurants that deliver to your area, with many offering discounts of up to 25% off your order.
Manicures
If you can’t live without your weekly manicure, check out deals local salons may offer—many give discounts on weekdays or early mornings—and time your nail schedule accordingly. Also, invest in a good quality top coat. Applying it every other day can help your manicure or pedicure last up to a week longer without chipping.
Dry Cleaning
Dry cleaning rates can vary widely, costing you anywhere from about $4 to upwards of $20 for a single suit, so be sure to shop around. Try to find flat-rate dry cleaners, which are gaining in popularity and can drastically reduce your bill. If you have the time, try doing your dry cleaning yourself with Dryel. With an $11 starter set of Dryel, you can dry clean 4 dryer loads. With 4 garments per load, that’s less than $1 per item.
Post your own tips for saving on little conveniences and luxuries below!
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Don’t be such a mathematics moron. Sure, you can complain about coffee costing you $82 a gallon, but what economic Cro-Magnon treats gas and coffee as an apples-to-apples comparison? As if you pull up to fill your tank full of latte for $100 until your next refill.
And the get-rich-by-forgoing-coffee “horrification” argument is the oldest and one of the weakest arguments in the Personal Finance 101 handbook. It presumes that life consists of denials and that your daily cup of joe has less inherent value on the rest of the garbage people buy and consume on a daily basis.
It also suffers from a major gap between a theoretical problem and a realistic one. This idea is built upon the notion that small expenses on a regular basis accumulate to huge numbers. But human behavior is never quite as you plan it on paper.
Take diet soft drinks, for example. You take the average American’s consumption of soda, replace the sugar with some sugar-free sweetener, and effectively Americans should be losing 19 pounds of excess flab, year-over-year, until mathematically we all should have disappeared into the ether. The reality has been quite different: the advent and ubiquity of diet soft drinks has coincided with an epidemic explosion of obesity — when by rights we should have all been losing 19-lbs a year on our diet soft drinks.
i’m sure the purpose of this blog wasn’t to put coffee and gas in the same category, but to point out that people can give up smaller unnecessary things for bigger necessities, such as gas, especially if the price of gas is continually rising.
yes, people will always spend money on little things that will add up, but that’s just it. this blog is trying to show that you can save a lot and put your money to better use. the economy is only getting worse and worse. might as well be less moronic and hold on to whatever money you can save for now.