Getting Rid Of Your Debt Without Worrying About The Latte Factor

by golbguru on February 6, 2007

If you tell someone that you are in debt, the first advice most people will offer you is “stop spending”. Occasionally, you will also hear about how David Bach’s “latte factor” is hurting your ability to get rid of your debt (technically the latte factor is about increasing wealth over the long term, but you can also look at it as if it’s about reducing debt over the long term). When I say *stop spending* advice, I am talking about advice of this kind:

If you are facing a debt that’s taking you down in a hole, you need to stop buying those clothes, shoes, junk burgers, coffee, electronic doodads, useless magazine subscriptions, cigarettes, movie subscriptions, and everything else that is not necessary to keep you alive and divert every penny towards your debt. Basically, live like a caveman if that helps.

Those are my own words from sometime in the past :).

While there is nothing wrong with such an advice, things are always easier said than done. The problem lies in the fact that this advice ignores the “happiness factor” completely. Here, I define the happiness factor as the measure of happiness that is associated with some of the things mentioned above (coffee, burgers, clothes, etc.,).

I have been thinking about that lately, and ran some quick numbers on a hypothetical person in debt. The point of this exercise was to compare a *stop spending* approach (or the latte factor approach) with a smarter spending approach towards reducing debt. Hopefully, the series of charts will do all the talking. I will add some comments to highlight a few points of interest.

In the first chart below, there are some (to keep it simple, I have included just a few) of the typical monthly expenses for Mr. DD (Drowned in Debt). Mr. DD is like the rest of us, and enjoys watching a few movies and eating out once in a while. Most of his monthly income goes towards the rent and the car payment.

Original Expenses

Based on this, the chart below shows Mr. DD’s calculated annual expenses. Also, his debt is shown alongside so that we have a better perspective of his financial situation.

Annual expenses

Now, let’s give Mr. DD a *stop spending* advice. According to this, Mr. DD stops his “latte”…or in essence, stops all his sundry spending on stuff like movies, clothes, etc. This is shown in the chart below. Do you see what has happened? The latte factor is no longer there (he saves $1320), but he has ignored the two most expensive things that he is spending his money on. He applies the $1320 to this debt, and reduces it to $8680. But, he is not very happy here because he has deprived himself of the *happiness factor* while doing this.

Stop spending

Now another smart fellow gives him a smart advice. He tells Mr. DD to look for a slightly cheaper apartment, and a slightly cheaper car. Now, instead of cutting his Latte Factor, Mr. DD decides to follow this advice and spends his money smartly. His annual expenses with this approach are shown in the following chart. Notice that he has reduced is annual car expenses by $660 and rent expenses by $660. Again, he applies the savings ($1320) to his debt and reduces it to $8680. But, this time he is happy because he has been able to keep up with the small enjoyments in his life while doing this. :)

Smart spending expenses

The other obvious advantage in this approach is that he has reduced those expenses that appear in the form of a long-term contract. Meaning, once he chooses a cheaper car or a cheaper apartment…his savings are automatic over the rest of his contract. It’s not like stopping your Starbucks latte…a little bit of stress and you will be back to Starbucks in the next hour. :)

To bring this to a closure, Mr. DD’s corresponding monthly expenses are compared to the original expenses below. Notice that by spending his money smartly, he just needs to make minor compromises when it comes to the apartment and the car, instead of stopping everything that gives him happiness.

Smart monthly expenses

Hopefully that conveys what I originally intended to convey.
With this, I am not encouraging frivolous spending; I am just acknowledging the fact that there are a few things you need to spend on to keep yourself happy. I am also trying to draw some attention towards the fact that sometimes, we tend to ignore the bigger things that are causing financial problems. In my opinion, we fall for the latte factor quickly because it is much more visible than other subtle (sometimes bigger) problems. Cut the latte if you want, but before you do that, make sure you have taken care of other expensive things in your life. Of course, you could be even wiser and tweak your latte expenses a little bit, but even in that case, your first priority should be to check on the bigger problems first.

Other articles on these lines that may interest you:

-Forget About the Latte Factor : by Flexo @ Consumerism Commentary.

-Want to Save? Give up the Big Things! : by JDRoth @ Get Rich Slowly

Updated: Click here for an interesting counter-arguement by a blogger friend.

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{ 69 comments… read them below or add one }

1 MoneyFwd 02.06.07 at 12:25 pm

I think this is definitely dependent on the individual. Getting a cheaper car is an easy thing to think about. Getting a cheaper apartment is totally different. Some people could do this, but a lot of times your apartment is whatever you could find that you could afford at the time and have ample space.

I think it’s better to cut your smaller expenses where you can, but not forget about the joys in life. Like substitute your $50 a month in clothes to $50 every 2 months. Or go out to eat less, or whatever. Large expenses are harder to change and sometimes not worth it.

2 jon postal 02.06.07 at 1:56 pm

I think that trimming back on the bigger expenses is excellent advice…as long as the savings go towards debt reduction rather than more clothes or movies.

Another option is to find or create for yourself additional income that can be used to pay down debt. Work a couple hours of over-time once a week, start a home based business, get a paper route if you want=) Do whatever you want, but get that extra few hundred dollars a month flowing in and put that money towards your loan.

just my 2 cents.


3 Maria 02.06.07 at 2:47 pm

Ok, I can understand both sides. Spending money on movies and lattes CAN add up and having too much of an apartment/car CAN eat up your budget, but is DD using his credit cards to bridge the gap between his lifestyle and his income?

Does DD believe that he is entitled to such an expensive apartment or so many lattes? Unhappiness will just breed in this situation because DD hasnt looked at his overall financial picture and decided where to manage his money best.

Interesting post!

4 J.D. 02.06.07 at 7:21 pm

This is totally the stuff that Elizabeth Warren preaches, and its excellent advice. But I think it’s dangerous in that it can be viewed as an encouragment to continue profligate behavior as long as you live in a cheap place and drive a junker. I think cutting back on the big stuff is an excellent option for certain people, and a quick way to save money. But for some people making these cutbacks is difficult, if not actually impossible. Good post!

5 Poorer Than You 02.06.07 at 8:46 pm

Well, I think the key here is to try to do both. Maybe he can’t make it through the day without his morning coffee, and maybe he can’t change apartments right now, but maybe he can also stretch his clothes budget and get a new car. Since the combination is different for everyone, each person needs to look at their total expenses to see where they can cut - so you’re right, looking JUST at the more “frivolous” things isn’t going to cut it, you need to look at the whole picture and see where you can best cut down.

6 golbguru 02.07.07 at 2:34 am

MoneyFwd: I hear you, but somehow I feel that it’s much easier to compromise between a $745 apartment and a $800 apartment than to create a year of grumpy mornings by not having your most needed latte. :)

Jon: ” as long as the savings go towards debt reduction rather than more clothes or movies.” ..ah ha, that’s a possibility I completely overlooked. :)

Maria: Whether Mr. DD feels he is “entitled” to his lattes or the expensive apartments can be a debatable point. Let’s assume he *needs* is latte and look at it this way: if he spends smartly, he can have is latte too with a *bit* of a compromise in the apartment.

JD: Yeah, I understand that this might encourage reckless spending..and that will be a sign of extremism. Now the only advice to this beast is “be reasonable” :). I do acknowledge that certain cutbacks are difficult, but in that case one should follow a “top-down” approach. Attempt to tackle the bigger problems first, if that’s not possible, go to the next and so on.

Poorer Than You: Cutting everything moderately is the *ideal* situation..but alas the world is far from ideal. :)

7 l2kj42q0f9y 02.07.07 at 5:17 am

” The problem lies in the fact that this advice ignores the “happiness factor” completely.”

This is completely wrong. Socialogists have studied this and found that more money doesn’t make people happier. Therefore as long as your basic needs are met, less money doesn’t make you less happy.

I know from personal experience. I used to make $94k and changed my lifestyle to live on $12K. I am much happier now. Money is a drug and when you are freed from the delusion that money buys happiness you are free to find true happiness within yourself.

Latte does not make you happy. Designer clothes do not make you happy. What makes you happy is your satisfaction with yourself and the people around you.

8 Jodi 02.07.07 at 5:33 am

I don’t think living cutting down on the big things should give you an excuse to go crazy dropping a couple bucks here and there. You don’t have to give up on the nice things (like an occasional latte) if you give you self a budget for it. My husband and I are working really hard to eliminate our debt, and we tried eliminating all spending and it just made us feel bitter and broke. For the last couple months we have given ourselves a pittance of a “blow fund” and it is amazing what it does to make you feel richer. I can go have a cup of coffee with friends, or blow it on makeup, or a cute outfit for my son without feeling guilty about blowing our budget.

So yeah, cut down on the latte factor but you don’t have to cut yourself off completely. Just be reasonable with what you have.

9 Kimberly 02.07.07 at 5:38 am

What this advice ignores is the cost associated with changing cars and homes. For both there can be astronomical fees to break leases, agent fees, paperwork, registrations, inspections and the like. I would think the advice prudent only when making the decision naturally when a lease is up or a car is unsafe. None of these opportunity costs are accounted for in your analysis.

10 Toby 02.07.07 at 7:19 am

There are always two sides to this argument and both can be valid. David “Latte Factor” Bach’s message is also about taking immediate action. Cutting out a latte is something almost everyone can do right now. Buying a cheaper car takes a few more steps and needs a bit more analysis. Let’s not even talk about the complexity of getting a cheaper house.

Here’s one bit of constructive criticism regarding your analysis: Mr. DD’s spending seems like it is already pretty limited due to the cost of his car and apartment. You’ve put very little fat in his budget so the effects of the cuts are very limited. You’ve basically set up his budget to support your argument.

The “Latte Factor” is not about cutting every bit of non-essential spending. It’s about doing the math and realizing how much is actually going towards non-essential things. It sort of assumes that people are dribbling away their money throughout the month without them even being aware. It also assumes a disproportionate amount is being spent on frivolous things.

Let’s consider:

$50/mo for eating out? I think I’m fairly frugal and I wish I could get my spending down that low!

What about that “latte-a-day” habit. $4/day, 20 working days a month. You’re already up to $80/mo! God forbid you want to take your girlfriend/boyfriend out. That could be $30+++ a pop perhaps once a week. Tack on another $120/mo at minimum! That’s $200 right there. Now cutting back starts to reap bigger rewards.
The “latte factor” is aimed at people who absentmindedly eat out (or get take-out/delivery) once or twice a week and don’t realize what it is doing to their bottom line. It’s not for a guy who has dinner out once a month.

$50/mo for clothes: How is this excessive? For some people that is not even a shirt! It’s 1/10th of a handbag! If this guy needs to buy some slacks and a couple dress shirts or buy a new pair of shoes so he can dress appropriately for work, then by all means, do it.

The “Latte Factor” is for those people who need to buy a new $100 blouse every week or insist on spending $500 on a handbag. It’s a wake up call to add things up and realize how much is actually being spent in a month.

Movies $10/mo: I got news for you…That is one new release movies and no snacks a month! Where is the waste? If this guy was going to the movies twice a week with his GF, eating dinner out each time, buying snacks and soda at the theater, then I could see the spending problem. But $10/mo?

In conclusion, I think this really makes the case that everyone’s situation is different. There was a time when my wife and I had many “latte factor” type spending habits and were in debt. We worked hard to turn things around and have done fairly well. David Bach’s ideas worked for us then but I fear I would have a hard time applying them now that we are out of debt and are more conscious of our spending. It does not make the idea any less valid, the target audience is just different.


11 Amy K 02.07.07 at 8:18 am

Ditto Kimberly, “I would think the advice prudent only when making the decision naturally when a lease is up or a car is unsafe.”

My last big move cost about $1320 in truck rental and gas. My last smaller move involved free boxes and lots of strong friends, but the lease payments overlapped with the house payments (it was cheaper to finish out the lease than pay the early exit penalties) so we spent close to $3000.

You’re right though: the big purchases are where you can save big money. Smaller car payments, safer car = lower insurance, better fuel efficiency = less $$ spent on gas. Smaller apartments and homes are cheaper, and usually less expensive to heat, cool, and light. If you have a gym membership and are shopping for an apartment, could you drop the gym membership is you moved into a complex with gym facilities?

12 dimes 02.07.07 at 8:37 am

I’ll sound like a left-coast hippie, but cars are really the kiss of death for many budgets. The Liz Weston article last week or whenever was really timely, because you see that all the time. The problem though is that it’s sort of hard for people to just get out of those car contracts and apartment leases. Sometimes if you make a bad choice right off the bat you have to live with it.

13 MoneyFwd 02.07.07 at 8:38 am

In response to l2kj42q0f9y, they have shown that money does help with happiness. You cannot buy happiness, but there is a threshold where people are happier above it than below it. It also levels out so that if you go far above the threshold, it doesn’t help make you happier. I can’t find the article now, but it was in the news a few months ago. If you have the money to do what you want to do, you’re going to be happier than someone that doesn’t. (It doesn’t mean though that someone that can’t do everything they want because they don’t have the money are not happy.)

14 Keisha 02.07.07 at 9:10 am

I can see both sides of the coin here really the analyis was done on a yearly basis so it’s safe to assume Mr DD would not be breaking a lease agreement with his apt. The car is also doable because if you sell it and get a clunker you have that 30 day window when you don’t have to pay a car note that money can go towards the fees and what not. If he’s upside down on the car or is leaing well it’s still doable he just needs to research his options. Happiness is relative and speaking from a broke person point of view money is a great stress reliever. Mismanagement of money however is where the problem lies. A budget is a wonderful tool that I have just learn to use and tracking my spending to see where most of my money goes also a big eye opener. Frankly if Mr DD got on a budget, start an emergency fund and the debt snowball plan he’d be good to go. There is more than one way to becoming financially secure find one that’s right for you and work it, I know I have.

15 moneymonk 02.07.07 at 9:22 am

Bravo Golbguru, Bravo

I love that way you displayed those charts. Excellent, although I agree with David Bach making saving automatic. The latte factor was not the best thing.

I never could see why people need to pack their lunch or give up movies! ( those are little life enjoyments)

I always look at the biggest bills that a person have and start from there.

It’s not the little things they make you broke, it’s usally the overhead, such as what you displayed mort/rent and car payments.

16 golbguru 02.07.07 at 9:29 am

l2kj42q0f9y: Money doesn’t make you happy, but the right use of it does. If you spend it right, you can make the most of what you have..and that’s what makes you happy. When I say “latte”, the word essentially includes a lot of small things in life with small monetary costs and large amount of happiness.

Jodi: Yep, that’s what I am talking about :)

Kimberly, Amy K: Opportunity costs are not included just to simply matters. That could be done, but that will sort of sideline the main message…in my opinion.

Toby: Yes, I have choosen the numbers to make a point..Again, the message is to go with a “top-down” approach. Take a “big-picture” look at your expenses and start from the top. If you can’t do anything about the top most expense, come down to the next and so on. It’s quite possible that for some people the latte factor is incredibly high…and in that case they will have to tackle it before other smaller problems. But, you do make both sides clear and thanks much for that. Just like the latte factor is not applicable to everyone, even this advice is not applicable to everyone.

dimes: Yeah, I see that problem of getting out of a car contract. It will require some work to get that done…but it might be worth it. The savings (like Amy K highlights) will be over the remaining period of your contract and might be worth a shot. Again, there are dangers in trying to apply this uniformly to everyone.

MoneyFwd: Hey, I would like to see the article…whenever you land your hands on it.

Keisha: Yep, it is mismanagement at the root. I am just trying to show one possible alternative here.

MoneyMonk: You may have realized from the above comments that the latte factor works for some people. But at that point it is already becoming a big part of your expenses…and it is in order of this concept to tackle it when that happens. I will just modify the last line of your comment - little things can tickle (may be pinch)..but big things can hurt.

Everyone: Thanks for all the comments…they are extremely valuable additions to the point under discussion. It is important that people see/hear arguments from both sides when they come across a concept such as this..and these comments are doing just that :) .

17 The Frugal Rebel 02.07.07 at 9:56 am

I think two things should be gleamed from this article.
First, don’t limit yourself to looking at just the frivalous things we buy like the latte. SOmetimes, we might be able to save a good amount by getting a more economical car or apartment.
Second, you have to take into account that many are far more likely to stick with their budget if it doesn’t hurt their lifestyle too much.
For me, that last part is difficult. I am a social creature. I enjoy going out with friends, girls, or whatever.
But the bottom line is don’t get too literal in reading the article. Look at how it can help you and use it. Don’t get caught up in the details as they are only meant to be examples. Use the concept and apply it to yourself.

18 MoneyFwd 02.07.07 at 10:05 am

I believe this is the article. It basically says that in a survey they saw that there was a certain amount of money that was optimal for happiness, after that it dind’t matter and below that you were less happy.

19 corey 02.07.07 at 10:32 am

this will complete depend on your location and career, but i think it’s as relevant as finding a cheaper car or living situation. if yre going for the big stuff, why not look for a better paying job? i recently did this, and it gave me an 11% increase in income. i know im lucky, and it’s entirely based on yr situation, but i didn’t see it mentioned.

20 Joe 02.07.07 at 10:54 am

That is a fantastic take on the important vs non-important expenditures and how they play into our overall hapiness. Sure, I could change my own oil, but my time would be far better spent paying someone $20 to do it and focusing on other things…like my family.

21 oneyearexitplan 02.07.07 at 4:32 pm

Your article presumes that DD can *only* find happiness in a latte. I disagree.

While committing to a cheaper “contract” (lower rent, lower car payment) can help reduce your debt, it does not help you find happiness elsewhere. In addition, by not attempting to find happiness where it matters, DD will probably find him/herself craving a more EXPENSIVE car or another 42-in flatscreen instead. Seriously, how many men out there would trade their mid-made-it BMW 325i for a ‘98 Corolla?

Finally, in 30 days or less you can quit your latte habit anyway (most habits) and you’ll probably be able to find happiness doing something else anyway. Great post! /pg.

22 Ellie 02.08.07 at 7:59 am

Money doesn’t buy happiness, but it helps you sleep at night!

From someone who struggles to put food on the table for her two kids, I can guarantee you that my life would be less stressful with more money. Maybe not happier, but less stressful - the constant worry takes a toll on everything in my life.

23 golbguru 02.08.07 at 8:18 am

MoneyFwd: thanks for the link to the article.

Corey: Yeah increasing income is one option. But that’s what I was trying to highlight. Everything remaining the same, a smarter approach could keep you happy and get you out of debt…even if there is no increase in your income. :)

Joe: you got it! :)

Oneyearexitplan: I am sort of thinking that the craving for another latte will be more than a craving for a new car…just because getting a latte is right across the road and doesn’t take too much. Btw, by the term *latte* I don’t literally mean just the coffee…it means a whole lot of small things that cost little but keep you going.

Ellie and The Frugal Rebel: I hear you. :)

24 TFB 02.09.07 at 2:07 pm

I’m on the side of reducing large expenses while rewarding yourself with small expenses. Trimming a “latte” every day takes a lot of effort and discipline. Just like going on a diet, many cannot keep it for long. On the other hand, reducing some large expenses, like picking a smaller apartment over a larger one, takes a one-time effort and the savings continue month after month.

25 RJ 02.11.07 at 9:55 am

It seems that the only food that Mr. DD is getting comes from eating out…. Perhaps some money from another expense category should go to eating in?

I agree that the car and rent payments could be drastically reduced without touching the expenses for the “happiness factor,” but the success of this method may depend on how the debt was accumulated in the first place.

Is DD’s debt a direct result of his search for happiness? Does that debt reflect CDs, movies, meals out, and other such things? If so, then it’s unlikely a true-life DD would have the discipline to shift monies from rent and car to paying off debt; more likely, a true-life person will see that newfound money as fit to be spent on the “happiness factor.”

In addition to reducing rent and car expenses, DD ought to consider reassessing what makes him happy. Must one necessarily spend in order to feel fulfilled? Why not borrow movies from a library? Why not purchase clothes less frequently at discount or outlet stores? Ideally, it should usually be the end result of a purchase or other transaction that makes a person happy, not the act of purchasing or transacting itself.

Ultimately, DDs problem may not simply lie in the allocation of his income to expense categories; it may be the relationship he has to shopping and goods/services in general.

26 Tim 02.11.07 at 10:59 am

a ton of lead weighs the same as a ton of feathers. It doesn’t matter if it is a big expense or a bunch of small expenses. It will be unique to the individual as to if all the small things add up to the big things. the problem with what Elizabeth focused on is the fact that we tend to ignore the cost of small things, because they are indeed small. To be trite, you do nickel and dime yourself. we can ignore $1 difference quite easily; however, bigger expenses give people more pause and more thought so they look for ways to save. We never look for ways to save on the small things.

27 moom 02.11.07 at 11:00 am

The key lesson is using money efficiently to achieve the things YOU want. Sometimes you might overspend on big things and sometimes too much on small things. The key is to cut out spending that is either:

1. Absent minded - you could use your money more efficiently to enjoy life.

2. Doing things just because everyone else does or says you should…. that includes buying a big house because someone else says it is a good idea or a new car because others have one etc. Cutting this aspect of spending out is going to be hard for a lot of people. IMO this is part of the real growing up process - learning to not care what other people think except where it is important - for example if you are salesperson you have to look acceptable to others…

28 golbguru 02.11.07 at 1:47 pm

RJ: Don’t read too much into his eating numbers…I chose the numbers in this case to make a point. Of course, there are finer points missing, but that keeps the analysis simple. For what Mr. DD spends over a month…the debt is almost certainly because of his car and rent (in this particular hypothetical case). Agreed that you could get small things you want in a smarter way..and it’s much better if you do it that way, but you should not do that at the cost of ignoring your big ticket items.

Tim: A box of lead is heavier than a box of feathers. :) You could take away the box of feathers…but with the box of lead it’s not going to make a difference. Of course, I don’t intend to apply this a blanket solution. Also, if your box of feathers becomes as heavy as the box of lead, you need to address both problems with equal intensity. Sometimes, the box of feathers will be heavier than the box of that time, if you follow this logic, you need to address the smaller problems first, which are now a bigger collective problem than the rent or the car.

I hope I haven’t confused you too much :)

moom: I agree that cutting on bigger expenses is yet there lies the key to lower monthly expenses. Like I said above, if smaller expenses stack up to become a large problem..then yes, you need to address those first (because they are not *small* anymore). And yes, like you say, it depends and one needs to make a wise choice before deciding what works best for him. :)

29 Paul 02.12.07 at 8:06 am

You inspired me to write a post about a similar experience I had

Shift Your Thinking to Reduce Debt

30 miserman 02.18.07 at 4:59 am

Saving money on the large ticket items is definitely the way to go, but scaling back on some of the small things are good to. The US marketing machine wants you to go out and spend money to make other people rich. If you think about it, those small treats are very short lasting. A couple hours after the treat, reality sets in again. shows you how to improve your own bottom line over time and stop making other people rich from your ‘disposable income’. Is money really ever disposable? Give up the short term for longer term happiness - it’s just that simple

31 DebtReliefCompanies 03.22.07 at 2:41 pm

Cutting out the high priced coffee makes sense if that money is re-routed to a better cause, namely, paying down the debt. Micromanaging your spending takes a great deal of discipline that most people do not have (although everyone should try).

Finding a way to quickly knock down your debt in a few chunks (like through rent reduction) makes the most sense coupled with an aggressive short term lifestyle change that forces you to sacrifice some day to day luxuries (Starbucks). Set small weekly savings goals - do the best you can.

Folgers isn’t that bad, is it?

32 Lazy Man and Money 04.02.07 at 11:54 am

Money Magazine did a similar article like this at It’s another good reading on the topic.

33 megapix 04.02.07 at 3:28 pm

You have packaged a very obvious advice neatly with some graphs. A better obvious advice is, don’t get into debt! easier said than done.

34 BlogWriter 05.28.07 at 5:59 am

Geez, I feel almost guilty, I used to have 2 lattes each day when working full time :) You need to do what’s right for you at any particular time in your life. I’m like moneymonk and like to focus on the larger expenses - most impact with least effort.

35 Nantahala 08.13.07 at 1:09 pm

Fabulous piece, and I love that you did the math and graphs to drive the point home.

36 Sam 08.14.07 at 2:45 am

I always thought of the “latte factor” as more than skipping the morning Starbucks. To me the latte factor is about changing one’s patterns and practice. I think so much of spending, at least in my case, is mindless. Paying attention to the latte factor is about being mindful with your spending and once you start thinking about how much each cup of coffee costs you start thinking about the costs of each daily expenditure. I think its a lot easier to cut out the latte than it is to find different housing/car although I’m not discounting the bigger effect of doing so.

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How about getting rid of the car and living in a place where you can walk, bike, or take public transit to work? Yes, rent would likely be higher in a city like this, but transportation costs would be 90% lower.

And D.D. would get some free exercise.

38 David 07.03.08 at 12:59 am

Although this sounds reasonable, the numbers are based on nothing.
I could make a chart like that the same way (different items and numbers) and it could defend the exact opposite opinion.
People who spend much usually spend more that $110 on ‘happy’ things. The case you describe is already pretty frugal (around only 6% of expenditure is on these latte items).
Also happiness is too vague of a concept to introduce. It cannot be used as an argument (ie. I could argue the same way that if the person is a spender then moving to a smaller (cheaper) apartment and owning a ‘worse’ car (in his eyes) also removes your happiness factor).
So instead of having an opinion and inventing the numbers along the way, first find the real numbers and then base your opinion on that.

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