We all treat ourselves whether it’s a $4.15 Venti (large) latte at a favorite coffee place, a $3.50 pecan oatmeal cookie at a neighborhood pastry shop, our favorite chocolates or a special $30 tinted moisturizer at the makeup counter of a department store.
Are these non-essential items or “tiny wants” (a term used by New York Times financial writer Tim Herrera in an interview, “Go Ahead, Just Buy the Cup of Coffee,” June 24, 2019) really going to make a dent in our budgets long-term? We say no. In fact, we feel that trying to curb these small cravings leaves an unpleasant taste, sort of like drinking flat soda or stale java.
In his Times interview, Herrera contradicts conventional wisdom that forgoing all those lattes and other expensive coffee drinks—far more than $4.15 if you add soy milk and are a nice counter tipper--will make a difference in your road to financial independence.
After doing the math, the yearly savings of $1,524.75 for a small latte every day certainly won’t make you a millionaire, but this tiny want offers so much more. It did help Barbara emotionally think she was saving big when first divorced, as did unsubscribing to The Times for Margaret when she first lost her husband. Both of us were trying to figure out ways to cut back until we felt steady on our feet. Yet, we’ve come to realize that in the scheme of financial things, these purchases are negligible.
Consider this. When Barbara also added in no valet parking and parked her car herself, and Margaret did without her expensive chocolates, we both felt even better and that we were saving big. Admittedly, it was a false sense of economy. However, there was the psychic reward that we were inching--albeit slowly--a bit closer to our goal of having more money in our savings accounts.
That said, the writer of the The Times article, Herrera, and the interviewee, Tara Siegel Bernard, also a financial writer for The Times, suggested instead focusing on bigger ticket items to make a real difference in net worth like the house you might be saving to buy or already own. Or you could also consider rethinking the type of automobile you drive and the vacations you regularly take. Maintenance on a foreign model and trips abroad certainly are more costly choices than an economy car and road trip to your parents’ lakeside cottage.
So, what’s a better plan to reach financial nirvana and still feel some daily or weekly bliss? We suggest balance, a wise choice for any investment portfolio. This helps put you in closer reach of having a healthy financial nest egg to sleep well at night but still find enough joy to make you smile daily, which can be achieved in many ways. Here are examples:
- If that morning coffee run gives you pleasure and a connection with your local coffee shop and the barista who waits on you daily even knows your name and what type of milk you prefer, isn’t that worth more than that $4.15 or whatever your coffee costs daily and yearly? After all, it may give you an important sense of community since you recognize and even get to know other consumers who are there all the time as you are. You occasionally chitchat and ask, “How are you?” And maybe you even sit down, talk and sip occasionally together. In doing so, you might help each other ward off loneliness that too many today express they’re feeling and, in the process, save money on a therapist.
- Or, if you just love having a date night and dinner out at the end of your busy, stressful work week to celebrate all those long hard hours you toiled, as does your honey or a good friend, isn’t that also something you sorta deserve? And, of course, you can stay home and cook—and save dollars--all the other six nights of the week.
- In addition, Barbara knows that her personal training sessions are good for both her mind and body. Yes, she could follow the regimen developed by her trainer on her own, but she knows herself and hasn’t. And her trainer works her harder than she might alone and checks that her form is near perfect when they’re together.
- Margaret knows too well that she could color her own roots or do it less frequently, perhaps wait six weeks instead of going every four weeks, but it makes her feel better to cover the gray--and to have a professional do it.
This brings us back to balance. There are alternatives to balance needs for security versus wants for instant gratification based around those tiny desires. Maybe, you might make coffee at home every other day and go to a less expensive restaurant occasionally and save the white-tablecloth fancy meal for once a month or special occasions.
The more important point is to look at the big picture and save for that house or condominium and any remodeling and maintenance needs first, or at least be on a steady course to reach those goals, if that’s a goal. Many millennials and even now boomers are quite content renting for a slew of reasons, but rent isn’t exactly cheap in more cities and even suburbs. On the other hand, owning a home has expenses that supersede the monthly mortgage payments like repairs. We also say put high on your priority list funds for healthcare, maybe long-term insurance, out of the blue emergencies and retirement.
And if you crave a “tiny need,” then set aside another pot for your coffees, chocolates, weekly hair blow dries, monthly colorings and highlights, nice bottles of wine, books, exercise classes, expensive pair of running shoes, trips to the garden, a few sessions with your favorite golf instructor and more that put a bounce in your step. If you have grandkids you might also set up college funds, though remember your important needs should come first.
Taking care of the big stuff will help you justify the small stuff and make you feel better about splurging periodically on whatever makes your spirits soar.
Our twist on “Go Ahead, Just Buy the Cup of Coffee” is do so but after you’ve budgeted for your home, healthcare, retirement and key expenses. In fact, if they’re in good financial shape and heading north, go ahead and buy a double or grande coffee and tip more generously. Better yet, buy a round for everyone who’s also a regular.