The Latte Factor and Overfrugaling - Finding your own level of frugal

The Latte Factor and How to Find Your Own Level of Frugal

Share this post:

Have you ever overdone frugality to the point that you weren’t getting any joy out of living more simply?  I have been there.  As someone who is a saver not a spender by nature, I noticed that I was going overboard after I came across an interesting tool – The Latte Factor Calculator.  Keep reading (or pin this post to read it later) to find your own level of frugal living, and try The Latte Factor Calculator for yourself.

A few months ago I realized that I was pinching pennies so much that frugality was getting to be a huge chore.  Instead of finding peace in simplicity and less spending and less stuff, I was starting to feel uptight about the whole thing.

This blog isn’t called The Curious Frugal for no reason; I definitely do have a love of novelty and an affinity for being frugal.  But do I think that everyone should be the same level of frugal or that there is an optimal level of frugal even for each person or family?  Absolutely not.  This is individual and depends on where you are in your financial situation and what you want for your life.  And this can change over time.

Even though my net worth is higher than it was a decade ago, I am more frugal now than I was back then.  I could afford to probably have more splurges than I do, but generally this isn’t what brings me happiness so I don’t feel the need to.  My happiness comes from spending time with my little family, and my extended family and friends, time spent outdoors, good health, and time to myself to recharge so I can have energy for my little tornado preschooler.

But, it can go the other way too.  A few months ago I came to the realization that I was overfrugaling.

Overfrugaling v. denying yourself all non-essential purchases for the sake of saving money

There were certain things that I was purposely not letting myself have, because I thought I shouldn’t have them.  I talked myself out of buying things that would have added value for me.  Added value is such a personal thing, and everyone will have a different list.  Even though I don’t judge what is on someone else’s list, I realized I was judging my own list.

Although most of the time I absolutely want to bring my own coffee or tea with me in a travel mug for the car, sometimes I want to buy a latte from a coffee shop.  I used to do this all the time.  I am a die-hard Starbucks lover and would buy a pick-me-up many days of the week.  It became more of a habit than a treat.  And then I came across The Latte Factor Calculator…


What is The Latte Factor?

If you haven’t heard of The Latte Factor before (here’s the book if you want to read it), the idea is that in terms of building wealth over time, all the small things that we treat ourselves with add up.  For me this could be lattes, for someone else magazines or makeup or new toys for your child.  It’s those small purchases that we don’t think twice about because they are so small.  But if we added up all those seemingly insignificant purchases over time, how much money would they actually represent?

If you can redirect that money into investing instead, how much would you have in 10 or 20 years?  Because I do consider myself a frugal type, but with a weakness for coffee shop drinks, I was very intrigued when I first heard about The Latte Factor tool.

Since lattes (and coffee, and macchiatos, and cappuccinos…you get the idea) are my frequent small splurge, I decided to try out The Latte Factor Calculator on its namesake.

Have you ever overdone frugality to the point that you weren't getting any joy out of living more simply?  I have been there.  As someone who is a saver not a spender by nature, I noticed that I was going overboard after I came across an interesting tool - The Latte Factor Calculator.  Keep readinThe Latte Factor and Overfrugaliing - Find your own level of frugal, and try The Latte Factor Calculator for yourself.

Under categories, you can choose from things like lattes/coffee, snacks, music, ATM fees, and others.  Then you choose an amount that you spend on that category: daily, weekly, or monthly.  I entered that I spent on average $5/day at Starbucks.  For annual interest rate, you estimate what rate of return you would get if you invested that money instead.  Some people use 8% to reflect the average stock returns over the long term.  I tend to be conservative with calculations so I chose 6%.  I didn’t want to exaggerate the amount of money I could have by choosing an interest rate that was too high and is only speculative anyways as we can’t predict the future.

Here is what The Latte Factor Calculator showed:

Have you ever overdone frugality to the point that you weren't getting any joy out of living more simply?  I have been there.  As someone who is a saver not a spender by nature, I noticed that I was going overboard after I came across an interesting tool - The Latte Factor Calculator.  Keep readinThe Latte Factor and Overfrugaliing - Find your own level of frugal, and try The Latte Factor Calculator for yourself.

In 20 years that latte money if invested, could compound to over $71,000.  Even with my fairly conservative rate of return estimate, this amount is still staggering.

This post may contain affiliate links.  Please read my disclosure for more info.

How The Latte Factor led to thriftier habits

By using The Latte Factor Calculator, it can make you think twice before making minor expenditures on non-essentials.

So I stopped buying lattes.  Cold turkey.

I would turn to look the other way when I would pass by a Starbucks.  Unless I was driving.  Then it was tricky.  My car was so used to turning into the Starbucks drive-through that it almost turned itself in automatically.

But I abstained.  And abstained.

All that abstaining is not good for you.  I needed coffee.

I love coffee drinks and there are other ways to get them other than buying them from a mermaid cafe.  Because I was letting go of some of the pleasure of the ritual of getting coffee from a cozy coffee shop, I decided if I was going to make drinks at home, I would invest in a really great travel mug.  The travel mug was key.  I had been making and taking coffee with me to work, but even though I was using an insulated mug, the drink would still cool down too quickly in a freezing winter car (Canada is cold in the winter, people).

After searching and reading many (many!) reviews, I chose the Stanley one hand vacuum mug and I’m so happy I did.  I have had this mug for two years now and I’m still in love with it.  It doesn’t spill even when it gets thrown around.  I can easily use it with one hand, like the name claims.  And my coffee or tea that gets made at 8am is still piping hot in the afternoon.  It fits in the cup holders in both my car and her stroller.  It’s everything I wanted in a great travel mug.

The Latte Factor led to replacing a habit with a new frugal habit

This thermos mug played an integral part in curbing the coffee shop habit.  I started a new habit of making two hot drinks every morning to take to work.  One would be for first thing, and that one would go in my regular insulated cup.  The Stanley mug would hold my afternoon drink, since it would stay hot until then.  I had noticed that the main time of day I was most likely to veer towards the green and white sign was around 3pm, or the afternoon slump.  Chugging my water bottle instead seemed less than appealing as it was more a pick-me-up that I needed and not hydration.  I would make fun different drinks in the morning so that would be something I would look forward to and not feel a sense of deprivation in my new habit.

Read: Can a minimalist lifestyle actually save you money?

Thinking of The Latte Factor I found myself overfrugaling

I was happy with my new habit so I shunned Starbucks.  Even when I was really craving a flat white exactly the way they make it.  Or the occasional green tea latte because that’s not something I make at home.  How could I spend $5 on a drink when I had seen the power of compound interest with that handy calculator?  It had definitely gone from all to nothing with this expense and I will admit that it wasn’t feeling great.  I started to feel like I was depriving myself.  What started off as a fun experiment had morphed into inflexibility and in essence, ignoring myself for the sake of a rule.  I needed to let go of some of the self-judgement of purchasing this non-essential.

Frugality and simplifying your expenses should work for you and feel like a good fit for your life.  It can feel joyful and positive to feel the need to purchase less.  It is not about denying yourself any and all treats and small purchases if they are not part of the food, shelter, and clothing basket.

There was a middle ground of being frugal and I did find it

The Latte Factor is an interesting and useful tool; I am not blaming the calculator for my overfrugaling.  The Latte Factor Calculator can be illuminating if you’re used to tapping your magical card for small purchases without giving them too much thought, like I was.  But like any tool, you want to make sure it is useful to you.  It doesn’t need to be all or nothing.  No cafes, no magazines, no music.  I was starting to feel closed in by my frugality, instead of the lightness and ease I usually felt.  That showed me I was being a bit too rigid and could loosen the reigns.

Now I happily prepare my coffee at home and use my travel mug most days.  I still love saving money by making my own drinks.  But when I want to go out for a coffee, I do.  And I enjoy it all the more because it’s not something I need to spend money on every day at 3pm.  It is a once in a while treat that, however small, brings pleasure to my life.  And pleasure can (and I would say should!) be part of a frugal life.

How to find your own level of frugal

Figure out your own essentials, beyond your basic needs.

Try not to judge them. Maybe you like lattes like me. Or you can’t get enough of Sephora makeup, or $8/bag kale chips are your weakness.

We are all different and everyone has those little things that seem so trivial but do actually add to our happiness and life satisfaction. IF they fit in your budget, enjoy them! Being frugal isn’t about being perfect. It’s not about eschewing every last thing that isn’t food/shelter/clothing. Being frugal IS about being mindful of your spending. If you don’t get a lot of pleasure out of it, then try to curb the mindless spending on those little expenses. These small expenses do add up, as The Latte Factor shows us.

You need to track your money

If you don’t have a way you’re tracking your spending and income, you can sign up with Personal Capital (it’s free!)  Personal Capital makes it easy by compiling your income, investments, and spending into one shiny program complete with graphs and charts for those visual learners out there. If you want Future You to be in a good position financially, you MUST track your spending and you MUST pay off your debt. Any tool that will make it easier to do so is a good idea, and Personal Capital does just that. Sign up here.

—–>  Hey lovely human! Pin this to save it for later!

Have you ever overdone frugality to the point that you weren't getting any joy out of living more simply?  I have been there.  As someone who is a saver not a spender by nature, I noticed that I was going overboard after I came across an interesting tool - The Latte Factor Calculator.  Keep readinThe Latte Factor and Overfrugaliing - Find your own level of frugal, and try The Latte Factor Calculator for yourself.

Have you ever tried The Latte Factor calculator?

Share this post:

Similar Posts


  1. While it’s gratifying to see savings add up, I love how you talk about recognizing the stress and headache it can become in getting too far. I think moderation is key in every aspect of life (spending, working, eating, etc) and it IS ok to splurge for yourself every one and a while.

    1. Yes! I totally get big-time satisfaction watching savings grow, but there is something to be said for living now too! Lots of people need to focus a bit more long term with money, but sometimes I need to be told the opposite 🙂

  2. Yes! I’ve been there. This is me! I used to spend hundreds a month on Starbucks. Then NONE. I’ve found my balance and am so much happier now

  3. I love this perspective! So many people get caught up in an all or nothing way of thinking and forget about the fact that it’s okay to break the rules once in a while and not feel guilty about it. Thanks for shining a light on that!

  4. I better make sure my husband never finds The Latte Factor Calculator – we’d never be allowed a small pleasure again! Haha. He is naturally a very frugal person whereas I am not. I have learnt to be much better though and I appreciate (mostly) the money my husband saves us in his frugality so that we are able to afford the big things, like me being able to stay at home to look after my daughter. The biggest thing that has saved a lot of fights in our marriage has been having our own “guilt free” money – we get $30 a week each to spend on whatever we like. The rest of our money is carefully budgeted and only used for essentials that we both agree on. I find that this is a good level of frugal for us.
    Hannah from

    1. I love the idea of guilt-free splurge money each week! I think it’s so important to have that (if it’s within a household’s means)…something where you can enjoy it on whatever without judgement from the other person. Money is such a tough subject in a partnership and no matter how similar people are with their thoughts on finances, no two people are the same so there are always compromises. That’s great that you and your husband came to that agreement!

  5. When I was on a diet, I didn’t allow myself an extra stick of gum if it would take me over my calorie limit. Naturally this rigidity translated perfectly to the frugal life as well. And I love me a compound interest calculator. My current struggle is allowing money for day trips and even (gasp) a vacation. I just can’t make it make sense in my head, when I could save the money instead.

    1. That way of thinking sounds all too familiar to me! 🙂 I can have a hard time taking a vacation too because I’d rather save the money. I have a partner who is not like that though so he encourages taking time off which might be a good balance for me!

  6. Interesting calculator! I am sort of fortunate I have never really taken to coffee, and I think that has saved me some money over the years. Of course I have my own weaknesses/splurges and it has to do with a golf club in summer. 😉

  7. My husband and I enjoy a home-cooked meal, but we find ourselves eating out often. I think that’s our own level of frugal.

      1. It’s a humbling experience actually. All I used to think about was to save, save, save! I was reminded that quality time with my husband was (and will always be) more valuable than anything.

  8. Great article! I love that instead of just dropping Starbucks coffee cold turkey and feeling deprived, you replaced your habit with something else to look forward to instead. Love the idea of buying a great mug and making fun drinks at home!

    1. I couldn’t do that, it wasn’t healthy for me! 😉 That mug is going to be getting even more use as the weather gets colder.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.