Disclosure: I participated as a member of the “Insider Launch Team” to help promote the May 2019 release of The Latte Factor. As a participant, I received a complimentary review copy (advance reader’s edition paperback) of this book. The hardback book that is the giveaway prize? I purchased that at full release price. I was not asked to write a blog post. As always, all opinions below are my own.

As a runner who could easily spend all of my disposable income on travel to races, and a woman who statistically will live longer than any man I might marry, I know that managing my personal finances well is in my best interest. While I’m putting money in my 401(k), and saving to buy a house, and otherwise trying to be responsible, it never hurts to read another book.

The Latte Factor is the latest offering from David Bach (author of a dozen books on personal finance) and John David Mann (author of a dozen books on leadership and business). Initially, the book reads like a novel, with all the classic elements that you studied in English class: an interesting opener, characters you care about, starting en media res. Finance doesn’t enter the picture until page 10–and the book only has about 120 pages. If you have read any of Bach’s prior books (e.g. Smart Women Finish Rich), nothing in this book will be new to you; I suspect that you are not the target audience. If you prefer a novel to a non-fiction book, or are a Millenial who never learned how to balance a check book (or even write checks, actually), this is your book.

The main character, Zoey, starts out as a 27-year-old New Yorker, working at a magazine. Her spending habits are based on a client composite Bach has used in at least one prior book. (I can’t remember which one, though I clearly remember the pattern of her spending habits: pre-work Starbucks, mid-morning Jamba Juice break, lunch out every day, afternoon decaff.) The other central characters include a caring boss who befriended Zoey when she first started, a cafe worker, and one of Zoey’s friends who works freelance in app development (who is the mouth-piece for what I believe are supposed to be “skeptical things Millenials say about money”). Instead of following the more impersonal and direct finance lessons of his prior books, this book is a novelization where the lessons are communicated to Zoey by other characters. These lessons take place while Zoey is facing a major career decision, and the story includes Zoey’s internal thoughts and feelings. You might find yourself comparing Zoey’s life to yours–as I did (even though 27 was a long time ago!)

The core concept, and the book’s title, is “the latte factor.” It represents all of the small, unimportant things you spend money on that don’t contribute to living richly in the moment. The concept is not that lattes are bad, or that you should always make your own coffee; maybe that latte contributes immense happiness to your day. Instead, the concept is that spending $4-5 (or more) per day on things that don’t really add to the quality of your life isn’t your best bet; rather than spend $150 each month on coffee you don’t think about, you could use that money for purposes that would better enrich your life: paying off debt, funding your 401(k), or a savings account to pay for the things you really want to do with your life. Or, say, lots of race entries and some airplane tickets.

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Like Bach’s other books, this one also touches on financial concepts like the magic of compound interest, paying yourself first, and using automation to make it easier to manage your money. If you are interested in learning more, you could buy your own copy (and claim bonuses from the authors); you might also check out The Latte Factor Podcast, available on Stitcher and iTunes.

Or you could win your copy here!

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  1. so my “life hack” is do i have the cash RIGHT now for it, if i cannot afford it or pay for it RFN, I do not buy. I have a set budget for “treats” like a coffee or two a week, but I bring stuff from home to work. Eating out or a drink is a treat. IF you do that, what else comes from the budget. Same with buying clothes. Nothing new comes home without something (or two items being sent to good will or consignment. I have a limited budget so I plan, and have a limited amount to spend. I stick to it. Because i have to 🙂

  2. Bain Reply

    It’s interesting…I just listened to a public radio piece about American Samoa. If you are born in American Samoa, you are a Samoan citizen, and a U.S. national (not citizen). A few of the women interviewed had lived in both the US and American Samoa; one was born in American Samoa but lived in the US and then moved back, another was born in the US but moved to American Samoa because her family was there. I can’t remember which one it was, but one of the women commented on how she would never move back to the US. She explained this by saying that in American Samoa they do not use credit cards or buy things they can’t afford, they do not feel pressured to keep up with the latest trends or whatever, and they are happy with what they have. I thought that was pretty profound.

  3. Since I have good credit, I take advantage of deferred credit programs & cards. I had to get $1500 in car repairs recently, so I applied for the credit card. I have a year to pay it off in easy payments & I will make sure I do it to avoid interest. If you’re responsible with credit, it can be a great help to bridge the gap when money is tight. Might as well use their money for free & leave that $1500 in my bank account. Thanks for the chance. 🙂

    • Bain Reply

      That takes organization–or at least a good calendaring system. Congratulations on making it work for you! (Lots of people think they will pay on schedule, but forget, or miss a payment–and for some programs just one missed payment means you have to pay interest.) Good work!

  4. Thomas Gibson Reply

    I think the whole idea of seeking to get rich is leading many to a false sense of security. Prioritizing what truly is important and saving money for “experiences” versus materialistic value surely outweighs in the end.

    • Bain Reply

      I totally agree (with the exception of my personal library, which I truly love and share with my friends). Part of Bach’s message is that “rich” doesn’t actually mean a gigantic bank account. I consider my life “rich” because I can travel to races and meet up with my friends from other places, and to see my family a few times a year (they mostly live in the midwest, I’m in the PacNW). My cat makes my life rich. Clothes that fit well and are well-maintained (so that they will last a long time) make me rich. Well-made shoes that can be re-soled instead of replaced make my life rich. Having free time to explore the forests and waterfalls and coastline makes me rich 🙂

  5. I am not a huge spender to begin with but what is holding me back is my job. I am not making enough money to cover expenses since it is part time but I hate the actual job so I could not imagine doing it full time so I need to move on to something else.

    • Bain Reply

      Being stuck in a job you hate is awful–I know how you feel! What steps can you take right now to either secure another part-time job, or allow you to move on to something you don’t hate? I know it can seem daunting, but breaking it into small pieces, a little thing you can do daily or weekly, might help.

  6. StuffSmart Reply

    I save money on groceries by utilizing store sales. Most stores have a rotation they use in items in their weekly ad. For example I buy peanut butter when our store has it half off (approximately once a month) and buy enough to last until the next sale. Same for pasta sauce, cereal, laundry detergent Etc. Once you get into a groove it’s really easy to shop. Pick up your meat, produce and dairy then the weekly sale items. I use coupons only when I receive a company promo, the store circular includes them, or I can load them digitally.

    • Bain Reply

      These are the things Mom taught me to do when we went shopping as a kid (though back then all of the coupons were paper!). Fred Meyer (owned by Kroger) allows you to load digital coupons to your shopping card (and they send paper ones based on what you buy the most). I also use iBotta. That store rotation is pretty key for staple items, like you mentioned. Target and other stores also have a rotation for shampoo, pet food, and toilet paper. I buy those things when Target has a “buy x get a $5 gift card” promo; I save up the gift cards, and use them to shop for back-to-school supply drives, and for holiday gift drives for kids.

  7. I break things down to price per use. Things that I use a lot, I splurge on so that I’m getting my money’s worth and it stands up to how often I use it. These are typically things that I use a lot.

    • Bain Reply

      That’s pretty smart. If you only use a sewing machine a few times per year for repairs, owning a plain-Jane base model would be fine. If you sew frequently, make things from scratch, and need a machine to last a lifetime, spending more money for a higher-quality, durable machine makes more sense. I choose this example because I still own the not-base-level-model my dad bought for me in 1994. It has been all over the country, worked in multiple professional theatres and college theatres, made clothing and costumes for myself and for others, and served as the machine I used to teach my friends to sew. It seemed quite expensive at the time, but on a per-use basis (even if you count a single day as one use), it has now cost less than a penny per use.

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