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Forget Latte Factor, Focus on Big Ticket Savings (Or Not!)

Posted By Jim On 01/13/2007 @ 12:38 pm In Personal Finance | 11 Comments

The Latte Factor was a cute concept, but honestly it’s a bit of a joke. Sure, it’s important to highlight how much you’d save if you were to cut out some of the small things that aren’t that important so that you could enjoy the big things, but it’s kind of like cutting costs on wedding invitations and favors without taking the knife to the reception hall costs – you’re really just quibbling over dimes when you should be looking at the dollars.

In the latest article by Walter Updegrave, he points out 3 big areas where you can consider cutting costs to save a whopping four hundred thousand dollars (really, it’s you save a smaller amount and it compounds, but $400k is a nice fat numbers). While I don’t agree with all of them, I certainly think they’re worth thinking about anyway. Also, one thing to take note of, there really isn’t much substantiation with some of these suggestions so you’re really just talking Walter at his word and his estimates in terms of how much you’ll truly “save.”

Drive less expensive cars during your lifetime: $180,000

I’m not a car guy. My first car was a silver 2000 Acura Integra and I loved it, then someone who couldn’t tell red from green totaled it. My second car, my current car, is a 2003 Toyota Celica; both were purchased at a very good price on eBay (check out my eBay guide to buying cars). I see cars as a way to get from home to work to home to wherever else I need to go and I only want good gas mileage. I don’t need a sick sound system or a ridiculous 0 to 60 time, I just need a reliable car with good gas mileage and Toyota’s and Acura’s fit the bill. If you go with a cheaper car, Walter estimates you’ll save $180k. Now, are you a car guy or gal? Maybe this is important to you and it will make you happy… happiness > money in my book.

Send your child to a public (not private) university: $164,000

I went to a private school that cost approximately $30,000 each year and I work beside people who went to public schools who paid far less. Would I have achieved what I have thus achieved without having gone to Carnegie Mellon University? No, but I do know that I did achieve what I have achieved and I did go to Carnegie Mellon, which is good enough for me. There is absolutely nothing wrong with going to a public school, saving the estimated $164k, because a private school is not necessarily “better.” However, to say that anyone can get the same results by going to a public school as by going to a private school is misleading. It’s quite possible that if I went to a public school I wouldn’t be where I am today. It’s very possible.

Cut vacation spending by $1,000 a year: $122,000

I love vacations. Please refer to happiness > money above.

Enjoy the weekend!

Source: CNN Money [3]


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[3] CNN Money: http://money.cnn.com/2007/01/12/magazines/moneymag/longview.moneymag/index.htm?cnn=yes

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