You want to buy a new house, a new car, or maybe start a new business. The one thing which is always on our way to achieving our goals and living the life of our dreams is money, that tiny little piece of paper that decides our fate. The more of it you have, the more you want.
According to the Latte factor, if you simply save your daily consumption on the things you don’t need, you can save a humongous amount of money over the long term. Now I know what you would say, Hey Shubh! I don’t want to wait for 40 years to get a reasonable amount of money.
I get it. But just have a look at your spending. I bet that you spend way more on unnecessary things than you expect. Below are results of a survey conducted by West Monroe Partners-
84% of Americans grossly underestimate what they spend on subscription-based services. On average, people assume they pay around $79.74 a month on recurring monthly expenses. Then they ran the math. And boy, they were way off. The actual cost is around $238 a month.
That is a $158 difference. Keep in mind it is just spending on subscription-based services and some of you might be spending even more than that. Money: Investing During the Coronavirus Pandemic | Data Driven Investor Through my financial services career spanning almost two decades, I was once responsible for supervising an entire…datadriveninvestor.com
Now think about the money you spend on ‘extra’ cigarettes, alcohol, latte, cloud service, or anything that you might not need as much. I can confidently say that some of you will be able to save more than $1000 a month and you can just invest that money on something more useful and meaningful than another cup of latte or another glass of beer or that latest Netflix show.
Find something to give up to get up — David Bach
Just removing these extra things from your life will make you happier, wealthier, and perhaps healthier.
All these subscription-based services misuse the fact that we rarely think about all the small spendings that add up. We happily subscribe to Netflix, Prime Videos, Medium, etc thinking it is just a few bucks a month. But make no mistake, these companies make Billions of Dollars every year with just that $5 you paid. Likewise, you can use that same $5 from a lot of things to make a good sum of money.
I hope it helps and congratulations on your next car or house 😉.