We may not like to admit it, but we all spend small amounts of money every day and never think of what it adds up to. These small amounts we call the latte factor.

The key to the latte factor is that so many people waste large amounts of money on small things. If you have completed the cash diary correctly, included everything you spent for at least a month and not changed your spending habits to make the diary look better than it should be you will see the latte factor.

The trick to getting ahead financially isn't being cheap and boring. It's watching the small stuff.

The latte factor can be called many things it just depends how you waste large amounts on small things.

Cigarette factor, Beer factor, Pokies factor, Take away food factor, Clothes factor, Car accessories factor, Don't be dumb with your money factor.

The trick to getting ahead is watching the little spending habits you have that you'd probably be better off without.

If you don't believe you have any extra money to be saved from watching the little stuff and haven't completed a cash diary try this. Visualise everything you do in the course of a normal day. That is from the time you get out of bed to when you get back into bed. Think about what you do at different times and see if the small amounts start adding up to be large amounts! Try this on a non normal day as well which may be a weekend.

What are they costing you? Instead of spending, if you invested in a managed fund $150 pm ie $5 per day at an 8% return in 20 years you would have $88,353 and in 30 years $223,553! Not bad hey? Of course traditional savings accounts provide little or no interest and that is why the money would have to be invested regularly into a growth investment. See our savings section for more details.  

Saving small amounts of money can make you rich. And the sooner you start the better!

What about inflation you ask? This will certainly affect what the value will be in future years. The amount will most likely be worth more than you expect. The benefit of regular saving is that the rewards will propel you to increase the amount saved as the years go by.

The miracle of compound interest is the power tool for building of wealth.

What is your latte factor ?