Is The Frugal Movement Over?
I smell doom for the frugality movement in the air. Like Donald Trumps hair, it was only a matter of time before the whole thing blew over and exposed some bare flesh beneath. Two years ago when the economy tanked, everyone rushed towards coupons, the size of newly built homes actually fell for the first time in decades and Americans began saving money. But that all seems to be going the side of the do-do bird. What am I talking about? Well, Starbucks has announced that its quarterly profits are up by 20% in the second quarter.
Ouches! I want to crawl back into my micro home and clutch my blanket because we are slowly going back to the actions that led us into this global financial mess in the first place. Okay, maybe I’m overreacting, but have you heard of the latte factor? I know that you probably have since you’re a smart cookie and you visit this blog regularly…but just in case you haven’t let’s do a Yes, I Am Cheap definition of the latte factor for you. It’s basically the impact that small purchases have on your bottom line over time. They’re little things that add up the big things when you’re not paying attention. They’re often made up of life’s little luxuries, such as a $3.50 Tall Chai Latte at Starbucks (so I’ve heard, so I’ve heard) when a $1.00 cup of coffee will do or a $0.50 cup from your home is just as good. If you have that $3.50 latte every weekday for a year it adds up to $910 a year and you probably didn’t even notice. That’s just for a cup of coffee. Now add to that the lunch that you buy every day, a magazine from the news stand every month, a couple of drive through meals every month, buying clothes that you don’t need and we slowly lose lots of money every single year.
Starbucks announcing that their profits have jumped by 20% and that foot traffic has increase significantly is the harbinger of doom. Compare this to a 97% drop in quarterly profits back in 2008. If you’ve been tightening your belt for two years and have gained some confidence that we have reached rock bottom with the economy and are back on an upswing, adding back that $3.50 latte is one of the first things that you will do. Then the big things will start to go. You’ll stop clipping coupons. You might hate the price of gas but you won’t be so conscientious about how much you’re really driving. Your savings rate will dip. Then you’ll start spending more on your credit cards. Arrrrrrgh. It’s enough to give a cheap girl nightmares. Or maybe it’s just a cup of coffee?
How’s your latte factor holding up? Better yet, what’s your favorite latte? Mine’s a tall pumpkin spiced whole milk, extra whip, latte. Mm dessert in a cup…or so I’ve heard.
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