Latte Factor Calculator
Calculate how small daily spending adds up over time. What your daily coffee really costs. Free calculator.
The Latte Factor Concept
Coined by David Bach: small daily spending habits ($5 coffee, $10 lunch, $15 subscription) compound into massive amounts over decades. $6/day invested at 8% for 30 years = $268,000. The principle is not about deprivation — it is about awareness. Most people cannot account for 20-30% of their spending. Tracking small purchases reveals where money quietly disappears.
Beyond the Latte
The latte factor is a starting point, not the entire strategy. The biggest savings come from the "big three": housing (30% of income), transportation (15%), and food (12%). Optimizing these three categories saves 10-100x more than cutting coffee. But daily habit awareness builds the financial mindfulness that leads to bigger optimizations.
David Bach, who coined the term, does not actually recommend giving up coffee. His point: track ALL small habitual spending, then consciously choose which habits are worth keeping.
