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The latte factor: How to be more money conscious

What is the latte factor? Well, it’s a concept now so popular that someone’s written a book on it, but the term also highlights the frivolous spending habits of our generation.

Why have lattes been chosen as the headline act? Well, if you’re a Starbucks fan or a regular at your local coffee shop, you might be dropping in once, even twice a day to get yourself a tasty drink or snack as you go about your daily business. A fiver spent here, £3-£4 the next day – little spends, but the thing is; they add up.

The dangers of the latte

Say you get a £3 latte every working morning of the year (as many do), you’re looking at around a £700 annual spend, just on cups of coffee. Throw in a daily muffin and suddenly you’ve spent over a grand on your way into work in the morning on something you enjoy, but definitely don’t need.

Therein lies the issue, and lattes aren’t the only problem. Buying your lunch out every day, going for a few pints before going home, maybe a Friday shopping trip post-work – if you’ve a habit of any of these then you’re splurging money unnecessarily that could go elsewhere.

Of course, no one is saying you shouldn’t enjoy yourself and go full spendthrift on every area of your life, but at a time when many people are struggling to develop any meaningful savings and manage their typical living costs soundly, curbing the more frivolous spends could make a massive difference.

But how do you become more money conscious?

A DIY approach

What does the now dreaded morning latte, a shop-bought lunch and a quick pint all have in common? They’re all purchased when out and about, which naturally comes with a considerable mark-up attached to the price.

One of the most drastic changes you can take is not to cut the coffee, lunch or beer out of your life, but make it yourself instead. Doing so will save you literally hundreds of pounds in each area across the course of the year. Yes, it means a certain time commitment, but the financial saving is more than enough of a pay-off if you can stick to it.

Trade spending habits for saving habits

Most people will say there’s nothing fun about saving and everything fun about spending. That might be true to some extent but spending like most of us do is just a matter of habit.

You’ve got used to buying your coffee out every day or buying your lunch at the local street vendor. It’s a comfortable, easy solution and we tend to stick with the things we feel familiar with. But if you can switch your habits around to favour saving, you’ll stand to benefit massively.

Get used to putting a sum of money away each month, no matter how big or small. Once you’ve done it a few times over, you’ll become accustomed to it, and seeing your savings account build will offer a huge amount of satisfaction, not to mention a financial backstop if something big comes up. Likewise, changing your routine to the DIY approach will mean an adjustment period, but once you’re into the swing of things you’ll be comfortable with making your sandwiches for the day or having a coffee at home, just as you once were with buying them elsewhere.

Automate your life

One way to help with building savings is to create an automatic redirect of funds out of your current account to your savings account on payday. That sort of thing is easy to do these days, as is automating the rest of your finances.

Find yourself an online current account and you’ll be able to schedule payments and redirects of your funds with ease. This means easier management of utilities payments, direct debits and multiple accounts while creating automated payments takes the decision out of your hands, so your sensible self prevails over the reckless one before the latter has had the chance to do anything silly.

The three steps above are all ones you can implement today. From there, it’s merely a case of getting into the habit of being more prudent with your money, and that’s something you may well come to enjoy in due course, especially later down the line when it comes to life’s big purchases.

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