What $10 can do you for you

June 11, 2007 at 2:12 pm Leave a comment

I’ve had David Bach’s Smart Couples Finish Rich book sitting on my bookshelf for just over a year now, still unfinished. My husband and I bought it with the intention of getting our finances in order, together. We read the first few chapters and for some reason, we stopped. We were able to get our folders setup and filled with the appropriate documents and have kept them updated. I’ve been meaning to get back to the book to finish it because I think Bach provides invaluable information and tools to manage our finances better. Not that we do a bad job, quite the contrary.

I have to admit, there was a chapter I simply skimmed (Building Your Retirement Basket) because a lot of the information I was already familiar with. Mainly what type of retirement accounts are available, how they work and how to choose what’s right for you.

But, what I was intrigued by was what Bach refers to as the Couples’ Latte Factor. It’s a concept I’m aware of, but I like the term Bach has coined because it’s precise. As he states in the book, most people are aware of the large expenses throughout the month, but the small things go by the wayside. He points to a seminar he was teaching in which the group just couldn’t grasp the concept that they only needed $10 a day to retire comfortably. A brave man stood up and told Bach that it was absolutely impossible to save $10 a day, $300 a month, like he proposes.

Bach asked the man to break down his daily expenditures, from morning to night. What the man and crowd found was that, not only was there enough in their budgets to do $10 a day, but that those little, unnoticed expenditures were costing them the retirement they truly wanted. This begs the question, do you have $10 a day to invest into retirement? My guess is that you probably do.

If you’re not sure about it, Bach has a Latte Factor calculator on his website that can help you find out what that looks like and what that grande latte is costing you.

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Entry filed under: Budgeting, Spending.

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