I can save by cutting out coffee.
1 min read


The financial fallacy here is assuming that merely cutting out small discretionary spending like coffee will lead to substantial savings. True, eliminating such daily costs can contribute to savings over time, but it might not radically transform your finances. It’s often small symbolic measures that don’t address the larger issues. People often look at small non-essential purchases like coffee as the enemy, when substantive expenses like rent, transportation, medical care, and consumer debt may be the actual issues.

People often feel overwhelmed by larger financial obligations that seem unchangeable or uncontrollable. Cutting out a daily coffee, or similar purchases, provides an easy, tangible action that gives a sense of control. Moreover, the success of this saving technique is easy to track, making it an attractive option for people seeking quick wins in their financial management attempts.

An effective financial strategy is to have an organized and comprehensive approach towards your personal finance that includes consistent saving, budgeting, debt management, and investing. The focus shouldn’t just be on small hedonic expenditures, but on overall income, fixed expenses, and financial goals. It’s important to scrutinize larger spending categories and working on strategies to increase income.

Further readings that can provide more insight into this fallacy and better management of personal finances include:

  1. “Your Money or Your Life” by Vicki Robin and Joe Dominguez. Book Link. This classic personal finance book encourages readers to consider their relationship with money beyond simple daily transactions.

  2. “The Latte Factor: Why You Don’t Need to be Rich to Live Rich” by David Bach. Book Link. This book breaches the latte fallacy and provides alternatives, focusing on how to grow wealth via investing.

  3. “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry” by Helaine Olen. Book Link. An investigation into the personal finance industry and the myths it perpetuates.

  4. “Manage Your Money Like a F*cking Grown-Up: The Best Money Advice You Never Got” by Sam Beckbessinger. Book Link. A humorous approach to debunk financial myths and provide sound advice.