Saving money might be easier than you think. David Bach is challenging us all to evaluate our “Latte Factor” and discover how much the little things add up to every day. His “Finish Rich” plan starts with examining the casual expenses that might be preventing us from saving money, and thus, from finishing rich.
You can use his Latte Factor Calculator to discover exactly how much you could be putting away by cutting a little bit here and there. The basic idea is to track your spending for a day to see exactly where your money is going. Almost inevitably, it’s going some places (like Starbucks) that you wish it wasn’t. Most of us don’t even think about the four dollars here and two dollars there that we toss around on a regular basis. But, given the amount of money that saving even ten dollars a day adds up to, it’s clearly time to give that small change some thought.
Already a good saver? This also is a great way to teach your kids to manage their expenses. Learning to save a little bit every day at a young age is a huge contributing factor to a successful retirement savings plan, according to Bach, so get your kids in the habit now. Sit down with the whole family, figure out your “Latte Factors” and then devise a plan for everyone. If you’re saving 20 dollars a day out of a 160 dollar a day salary, your kids can save a fifty cents a week out of a five dollar a week allowance. At the end of the year you’ll all be happy with your savings accounts.
