Updated on 08.10.10

How Not to Fail at Frugality

Trent Hamm

Yesterday, I had a wonderful conversation with an Associated Press reporter who was writing a story about teaching children how to be frugal. The discussion wound around through several topics, eventually coming back to the idea that many people (like, for example, Ramit) do not like frugality because it doesn’t give you the “big win” and that people don’t like giving up things like lattes.

She herself gave an example of this. She lives in a major metropolitan area and lives in a small apartment, which means that, in order to entertain friends, she has to do it outside of the apartment.

My response to her was simple: one of her key values is entertaining friends, so that shouldn’t be an area where she cuts back. Instead, she should cut other areas to the bone, and I mentioned making your own laundry detergent.

Why the “latte factor” has problems
David Bach has long been one of the most well-known personal finance voices out there. He’s written a small truckload of personal finance books and reached a lot of people.

One of his most well-known ideas is that of the “latte factor.” To put it simply, it means that if you simply stop buying a latte each day and save that $5, you’ll begin to build that into a great deal of wealth. $5 every day for a year adds up to about $1,800. Investing it at 8% interest and repeating for two decades gets you just under $83,000. That’s just from avoiding a single latte a day.

The math there is absolutely correct – and the concept works, too. If you cut something small out of your life and consistently save the money from that cut, you’re going to end up with some serious change over time.

The problem is what you’re giving up. The “latte factor” of course refers to coffee – something that’s inessential to basic life, something that’s purely a treat. Yet, for some people, a latte a few times a week is a significant part of their emotional happiness. They rely on that sweet flavor and that little caffeine boost and it fuels them throughout a challenging day.

When you take away that latte – from some people, mind you, not everyone – a very noticeable part of their spice of life goes away. The latte is the big treat in their day that really brings them a shot of happiness and makes the day easier. Taking that away makes their day much drearier.

That’s the inherent problem with the latte factor: when you apply it indiscriminately to everything in your life, you’re going to chop away things that are unimportant – but you’re going to also whack away things that are really important to you.

I prefer the “laundry detergent” factor
Everyone has different little things that make their life happy and bearable. For some people, it is that morning cup of coffee. For me, it’s having books to read and a game to play.

The trick is figuring out which of those little thing really does brighten your life – and which of those things don’t. What you’ll find is that when you really dig into this question, you begin to find that surprisingly few things really make you significantly happy (beyond the initial burst of pleasure at acquiring something). An awful lot of things we buy are part of a routine or done to make others happy or done because we’ve believed that it’ll make us happy when it really doesn’t.

That’s the reason I prefer the “laundry detergent factor” to the “latte factor.” Some people get a great deal of personal pleasure and joy from their morning latte. I’ve yet to meet someone whose life is made substantially better by their decision to buy Tide over another laundry detergent.

Thus, I usually tell people to make their own. You’ll save around twenty cents per load of laundry with a homebrew detergent, and it takes about ten minutes to make a batch that will handle fifty loads. Quick back-of-the-envelope math tells you that making a batch of this stuff earns you about $10 (after tax) in ten minutes.

Once you’ve done that and seen how easy it is to save money while living a little cheaper and not reducing your quality of life, start searching for other methods to do it again. Install a programmable thermostat to whack your monthly energy bill. Properly inflate your car tires to improve your gas mileage. If you don’t read magazines much, cancel your magazine subscriptions. If you rarely watch television, drop your cable. Make a simple price book and figure out the best value grocery store around you (unless, of course, you get deep personal value from shopping specifically at Kroger’s).

If something seems difficult or makes you deeply sad, don’t be afraid to back off. You’re probably hitting on something important to you and, unless you’re in deep financial straits, you’ll find more success by leaving those areas alone.

Good luck!

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  1. Laura says:

    For those of us with allergies/sensitives, Tide is worth it. (I buy fragrance free, some people buy it because other brands make them itch, etc) For the rest of the population, substitutions of one kind or another can easily be made.

  2. Kelly says:

    Good post! I like iced coffee from McDonalds. I get one every night on my way to work. It runs from $1.99 at the restaurant near my work to $2.75 at the McDonalds in my town. I commute 30 miles one way to work daily. Like you said, I cut back in other areas.
    A few months ago the CVS pharmacy had Xtra laundry detergent on sale for 2/$3, each bottle lasts for 28 loads. In one trip, I bought 4 bottles and in my next trip I bought 6 bottles which is the limit per visit. So we won’t be needing detergent for awhile and when that runs out,I’ll be making my own. I bought all the ingredients a while ago and never got around to actually making it!

  3. Johanna says:

    “That’s the inherent problem with the latte factor: when you apply it indiscriminately to everything in your life, you’re going to chop away things that are unimportant – but you’re going to also whack away things that are really important to you.”

    in·her·ent: (adj.) existing in someone or something as a permanent and inseparable element, quality, or attribute.

    What you’re describing is not an “inherent” problem with the latte factor, because the problem goes away when you stop whacking away things that are really important to you.

    And on laundry detergent: A lot of people have been commenting lately that they’ve tried making their own, but they’ve noticed that it doesn’t get their clothes as clean as the commercial stuff. It would be great if you addressed this in a post sometime.

  4. Annie Jones says:

    My take on this is that people make “being frugal” so much harder than it has to be, and/or they expect one-size-fits-all instructions for the lifestyle.

    My advice would be to pick something…anything…that’s insignificant and economize there. After that’s under control, pick another. After a while it becomes second nature to spend less on what’s not important. For me, it has also become second nature to re-evaluate habits and purchases and find that what I once thought was important no longer is.

  5. Tahlia42 says:

    Some times, though, you can’t tell from the surface if it is a latte or a laundry situation until you try it. It can be easier to let something go if you know it doesn’t have to be forever if it turns out you genuinely miss it and it’s not just part of your routine.

    I’ve found that only by cutting things out do I find what really matters to me. At one point I decided that my Diet Pepsi habit was taking up too much money. After 5 weeks of no soda, I realized that despite the fact that it is bad for me, my life was less pleasant without it.

    I did find, much to my surprise, however, that in the 4 months since I cut out cable, there has only been one time when I missed it.

  6. bb says:

    You can only save like… $10 a year there with one load per week. Latte costs $5 a day…

    A lot of people fail to live frugal because they don’t want to give up ALL luxury spending habits. But the fact is that it’s already effective by simply decreasing the frequency of those habits. Instead of having one latte per day, people can try to cut back to one latte every three days or a week.

  7. CB says:

    Where can I get that 8% return?

  8. Michelle says:

    Don’t knock the Kroger! They double coupons. ;)

  9. L says:

    There’s more to the “latte factor” than that. I realize that this is a bit off topic, but my sister has worked for Starbucks for years. Both when she was full time and even now as a part time employee, she has had a very good health insurance plan. That is not cheap for Starbucks but it is the right thing to do as a corporation, and that is part of why it costs extra to get a cup of coffee there. In the last five years my sister has had breast cancer come back three times and has had extremely aggressive chemo to treat it. All told, her insurance from her job at Starbucks has spent well more than $500,000 over the last five years for her treatments — and she is still working there, and they have not tried to hustle her out of there to dump her from the insurance pool. So, so I buy an overpriced latte from Starbucks? Yes, and I feel good about it, not just for the little jolt of sugar and caffeine, but because I’m supporting a company that does the right thing by its employees even though it doesn’t have to, in a world where it certainly could make an easier and cheaper choice. And that supports a very dear value to me, my sister’s health.

  10. Kathy says:

    I find my life significantly less itchy when I stick to All’s Free and Clear. I’ve had issues with other free and clear brands (and terrible issues with non-free and clear.) Sorry, I’m not willing to gamble that the homemade soap will work for me.

    So, congratulations… you’ve now found someone where laundry detergent brand matters.

  11. lurker carl says:

    @ #2 Johanna: Trent’s laundry concoction isn’t detergent, it is a soap mixture.

    It is similar to what our grandparents used, the soap takes particles and oils and redistributes it evenly throughout the clothes. Some of the dirt/oil leaves with the wash water, most is trapped in the fabric. The crud builds up over time and makes your clothes dingy. Collars, cuffs, armpits, waistbands and ALL stains should be pretreated and hand scrubbed before machine washing in order to get clean. After all that work, some bleach is needed to get whites white and colors colorful again.

    Detergents suspend particles (dirt) in the water and use soaps and enzymes to dissolve oils. Dirt and oils leave with the wash and rinse water, very little is redeposited onto the clothes. Modern detergents same time, labor and water.

    No one worries about ring around the collar any more unless they wash clothes with Fels Naptha flakes, washing soda and Borax.

  12. Kim says:

    I am also firmly in the ‘homemade detergent doesn’t clean my clothes’ camp. I tried it and absolutely hated it. I now have a triage system to laundry detergent. I have a bottle of tide (seems to be most powerful) that I use only for heavy soil. I buy All for the rest of our clothing (works reasonable well for a much lower price). I also have bottles of whatever I can get for next to free with coupons that I use for sheets and towels. I match coupons with drugstore sales for everything and pay very little to get my clothes clean.

  13. Maria says:

    @Kathy – I also use All Free and Clear and have issues with other brands. I guess that makes two of us.

  14. Jen says:

    An interesting frugal tip for magazine readers who don’t mind not actually having the magazines at home is to read them at Barnes and Noble. I wouldn’t recommend this, and in fact, felt pretty uncomfortable doing it myself until a Barnes and Noble employee told me that they want their customers to do that. That’s why they have all the chairs there. I rarely buy books, but you can bet that when I do, I buy them from B&N.

  15. Monica says:

    @Kathy and @Maria – Count me in as #3. I love All Free and Clear. Other detergents make me itch.

    I wholeheartedly agree with Trent’s premise that cutting back in an area that doesn’t matter as much is a great way to save costs. But I think it’s a variable that depends on the person.

  16. Leah W. says:

    #2 Johanna, Trent has done this before. Search “laundry detergent” in the search bar to the right of the blog logo header and look for the Apr 9, 2008 post.

    #12 Jen, if you do want the magazines at home, wait a month and check them out from the library! At my library, you can’t check out the most recent issue, but you can check out all others just like a book. I’ve cut my subscriptions down to one and I use the library for magazines of lesser interest.

  17. Stacy says:

    Another key to failing at frugality is failing to do the math. I admit I rolled my eyes at the mention of making your own laundry detergent, so I was glad to see the statement that it saves $x per load. A lot of people target-fixate on a few things that they mentally associate with frugality, which may or may not actually save money, while ignoring other things that would immediately jump out if they just did the math.

    Gas mileage is a good example. It never makes financial sense to replace a personal vehicle just to get better gas mileage, but every time gas prices spike, a lot of people rush out and trade in their cars. If they did the math, they’d realize that fuel costs pale in comparison to the fixed costs of a car (maintenance, insurance, finance charges)

  18. Tyler says:

    Using the “laundry detergent” route still doesn’t compete with the “big win” strategy, because it is nowhere near a big win! Using the example of 20 cents savings per load, a person who does two loads per week for a year (one whites, one colors) will have saved $20 at the end of the year.

    If I approach someone and say “use a soap mixture for a year that may or may not clean your clothes, or skip a morning coffee the first Monday for January – April for the same savings”, which is more realistic?

  19. Amanda says:

    We had to use Kirkland free & clear. Now using trents combo, less the water and boiling (just dry mix) and free & clear bar of soap (dove right now) we have no itchiness!

  20. Johanna says:

    @Leah W.: I’ve seen that post, and I don’t think it’s very helpful. All it shows is that neither Tide nor the homemade stuff can remove a mustard stain without pre-treating.

    For me, a truly convincing side-by-side comparison would have to show how they both do *with* pre-treating, how they handle several different types of stains (including something greasier than mustard), and something to address the “dinginess” issue that some people have mentioned.

  21. Crystal says:

    I actually am a fan of Tide, so it is my latte factor (I don’t like coffee), lol. Your key point is spot on though, prioritize and gain wealth without losing all the fun stuff in your life. Good reminder.

  22. JD says:

    @Kathy, @Maria, and @Monica – Me too. All Free and Clear is the only one that hasn’t given me any issues. I’m not going to take the time to make homemade soap, find out it also gives me a rash, then have to re-wash my clothes.

  23. RichHabits says:

    I think what David Bach meant with Latte Factor is not exactly you are potraying here. He gives an example of “Latte factor”, but what he says is we all have our own latte factor where we can minimize and save that money and invest.

    About “Laundry detergent”, I am not sure. I would not spend my time learning how to make detergent and make one. The time and money I spend on it is not worth investment. I would rather use that time to learn various investments, play with my son, read books, or go for running. I use detergent twice a week anyway.

    I love frugality. But I have be careful not be too cheap and foolish to spend my valuable time and money on something just to save few cents.

  24. Johanna says:

    Getting back to the latte factor: The point of the latte factor is not that you should never, ever buy lattes. It’s not even specifically about lattes: The latte is just a stand-in for any small expense that’s repeated often enough to become a big expense.

    And the point, it seems to me, is just that those little expenses add up. So if you’re finding yourself short of money for something that you really do value (saving for retirement, say), the solution is as likely to lie in cutting back on the little expenses as in trimming the big ones.

  25. prufock says:

    Ramit may claim to hate “frugality,” but I think he has a misconception of what frugality is. His advice has the same core philosophy: get the best value for your money. So when I hear someone, even Ramit himself, say they hate frugality, I kind of smile to myself and remember all his posts about negotiating, cutting magazine subscriptions and cable, and lowering your phone plan.

  26. Melissa K. says:

    I think you are taking the “latte factor” too literally. The “latte” represents anything that you spend money on that doesn’t give you as much satisfaction as you would like. For you, your latte factor would be books and video games. You have cut those out, or rather, cut out the majority of your spending on them.

    I think the point should be that you should spend money on stuff that truly brings you happiness, and do not spend money on something that won’t.

  27. sluggo says:

    Making my own coffee with a french press and drinking it out of a thermal mug has saved a couple or bucks every day, and a bottle of Tide has lasted forever since we started using less, but honestly, getting rid of that damn car payment is life changing. $450/month is going to buy an ocean of coffee and Tide.

  28. Maureen says:

    Lurker Carl, Thanks for the explanation of the dingyness due to using the soap recipe. My family and I noticed the increasing dingyness using Trent’s formula and went back to using Tide (which I usually buy on sale using coupons).

    We’ll find our Latte factor somewhere else.

  29. Russ says:

    I like the basic premise of the article in that you should cut to the bone anything which you don’t care about, but I hate the example of laundry detergent for a number of reasons.

    First, it isn’t that viable for anyone living in an apartment where space is an issue (like the reporter) and having a 5 gallon container sitting around isn’t really an option.

    Second, as has been mentioned before, using your own home made soap mix isn’t as effective as using a detergent.

    But most important to me, it just isn’t a big win. Unless you’re doing a serious amount of laundry the average person is only going to save around $20 a year. There has to be better ways to spend your time that are more efficient: Brainstorm on ways to increase your income, crunch numbers on refinancing your mortgage or pay off debts faster, review your credit card statements to see where you’re actually spending money to see what you can ruthlessly cut, automate your saving and investing etc.

    This might be useful after you have done all of the above, but this isn’t a place I’d start my frugal journey and it certainly wouldn’t be the best example of something that someone could do regularly to increase their wealth.

    I agree with Ramit that getting a big win will blow the latte factor out of the water, but I also agree with Trent that the best effect is gained by combining a big win with continual small gains, I just wish Trent had given a better example.

    And can we please now put the make your own laundry detergent topic to bed and never talk about it again? It seems to only work for those that have the space for storage and also a large family that does a lot of laundry.

  30. WendyH says:

    Re #19: Johanna is right, it’s not about the latte’s, but the idea of treating yourself to something special (little expenses) on a regular basis and how it is tied to your happiness and your overall financial situation (big expense).

    My example is eating out at work vs packing a lunch: my husband fought the idea of taking a lunch for a long time, but it was the area with the most financial waste. What he learned is that it wasn’t the food that was important, it was the getting out of the office and visiting with co-workers.

  31. gail says:

    one of your best post to date. you hit the nail on the head with “Yet, for some people, a latte a few times a week is a significant part of their emotional happiness. They rely on that sweet flavor and that little caffeine boost and it fuels them throughout a challenging day.”

    so, so, so true!

  32. ameliabedilia says:

    I am also getting tired of hearing about how Trent makes his own laundry soap.

  33. Maybe I missed the link between the title of the article and the content of the article. How is this about “not failing at frugality” more than it is just a rehash of old information?

    I know it gets hard to come up with new frugality ideas 365 days a year, two times a day, but we know about the laundry detergent and programable thermostat. It’d be nice to read something fresh and innovative and not always in defense of frugality.

    Sorry to be critical but I was hoping for something more, or different, from the title.

  34. valleycat1 says:

    #25 – I agree. I guess failing at frugality is not making spending decisions based on your actual lifestyle & priorities.

    However, as I see it, the key here isn’t WHAT you decide to cut, but in ” and consistently save the money from that cut.” I’d guess that most people who decide to implement the latte factor don’t actually start transferring that small amount into a savings account – it just gets absorbed into the nebulous category of miscellaneous expenses(aka ‘where’d the money go?”) – or factored in mentally or even subconsciously when deciding whether something else is affordable.

  35. Nansuelee says:

    #7 L I love your comment. We all should be learning more about the companies we purchase from and what they support or don’t support for that matter as well as how they treat their employees. By just asking the question “what do the stars represent on your apron?” at a Cracker Barrell one day I learned it had to do with training and that the employees had done what was asked by the company to earn insurance coverage. I am not sure if it was ever full coverage by the company but if I understood correctly the more stars the less paid by the employee. I like knowing they offer a way for employees to get insurance coverage if they are willing to put in a little effort. It shows initiative by the employees and a commitment to the company. Knowing this has made Cracker Barrell a place I like to go to not only for good food but also for it being a good work enviroment. I will add Starbucks to that list.

  36. I think a lot of people are missing the point. It seems to me that the ‘laundry detergent factor’ means, find something you can cut back on not ‘you can only cut back on laundry detergent if you don’t like cutting out coffee’.

    I use a lot of natural things instead of chemicals, like no shampoo but just a mixture of baking soda and water and instead of buying crazy house cleaning chemicals I use peroxide, or vinegar with baking soda. It keeps things simple too!

    I’ll soon be making my own detergent but from what I’ve seen asking around the best way to make it is dry, not liquid and it keeps things from getting dingy.

  37. Tracy says:

    Being Frugal is something that is very important and needs to be taught. Another thing that also needs to be taught is when to make the “big win” move. Understanding all aspects of what could very well be a life changing risk is so important and needs to be stressed to extreme measures. But people need to also understand that risks need to be taken under the right circumstance. Where would any of us be if we didn’t take any risk in our life.

  38. ed says:

    Buying items used saves a ton of money and you don’t really miss anything. I’ve had success buying electronics on craigslist. We buy our clothes used as well.

  39. Landon says:

    Great article, Trent. Since I started my own finance blog, I got into a mini debate with a friend. It seems like alot of people confuse frugality for being cheap. He kept challenging me on how being frugal would affect your happiness. I had to repeat literally 20 times to him: “YOU DON’T HAVE TO SACRIFICE THINGS THAT TRULY MAKE YOU HAPPY TO BE FRUGAL!”.

  40. Robyn says:

    For my family, it’s the “yogurt factor.” My husband used to eat two containers of yogurt each day at $.50 apiece. Not a big deal — he works hard and brings in more than enough money to afford it, so I certainly wouldn’t begrudge him that. But when our oldest child got old enough for yogurt, I had trouble finding what I considered an acceptable option at a reasonable price. All of the whole-milk yogurt I could find was either marketed for kids and thus full of high fructose corn syrup or it was organic and thus really expensive, or both. So I got frustrated and started wondering if it was really that hard to just make it myself. The math worked out, and when I started making yogurt for the baby my husband found he preferred the homemade stuff as well. We now pay approximately $.12 for a 6-ounce jar of yogurt (plus electricity for the yogurt maker), which is a huge savings even before you factor in the health benefits. The yogurt maker has long since paid for itself, since I make yogurt multiple times in a week. It’s hard for me to calculate the exact savings for us since we eat more yogurt now that it’s less expensive and healthier, but I know it’s well worth it.

    As for laundry detergent, we use All Free & Clear — it’s been what works best with our cloth diapers, which are a huge savings in themselves since they’re being used by child #2 and going strong!

  41. Rebecca says:

    I think the reason that people like Ramit don’t like frugality is because they are very self absorbed people. Take a look at his site. Its all ME ME ME all the time. He wants to be rich; I want to be happy. Actually I want my kids and husb and family to be happy, that will then make me happy. For me frugality happens not because I want to be rich, but because I want to give my kids the things they need and maybe a few things they want. We have one wage earner, one paid for but on its last wheels car, and we eat basic but healthy food so I can be a stay at home mom and have a fixer upper house with a fenced yard near a school that can give my autistic sons the best education they can get in WI. That is why I sacrifice everything I can, not just stuff that isn’t important to me.

    The thing about wanting to be rich is that those people never seem to be happy with what they have.

    Less can often mean more. I think we appreciate the things we do have and can splurge on more, though Ramit may find those things pathetic, because they are rare for us. But I bet we are happier than he is too. If we lost what we have, we could still be happy. I doubt he could say the same.

  42. cp says:


    I have some reservations about “earning” health insurance. This relies on the honest goodwill of each manager. Who is to say health insurance is not being leveraged to force employees to work overtime on no notice, work double shifts, even work overtime without pay? Before I thought that was great idea, I would like to know the criteria, and how objective that criteria is. There is definitely potential for employee abuse in a system like that. Or…is health care essentially a commission, and the more they sell. the more coverage they get? That would not be appealing to me as a customer at all. I like initiative programs, but I prefer rewards be extras, not essentials.

  43. Daniel says:

    Rebecca, not all rich people are unhappy. That seems like an unwise and uninformed generalization to me. Being rich might not make you happy, but the freedom that wealth brings might also bring happiness to some people. I’ll agree that celebrities often don’t appear happy, but I think that’s a separate issue altogether from money.

  44. BonzoGal says:

    @#25 Steven: Trent makes the title clear in the last paragraph of this article: “If something seems difficult or makes you deeply sad, don’t be afraid to back off. You’re probably hitting on something important to you and, unless you’re in deep financial straits, you’ll find more success by leaving those areas alone.”

    Failure vs. success. It’s there.

    My “latte(s)” are TV, new cars, brand-name OTC medicines, coffee, and new clothes. My “home-made laundry detergent(s)” are library books, used cars, generic OTC meds, tea, and thrift-store clothing. Trent’s right, start with the things you don’t value that much and it’s easy!

  45. Fran says:

    2) measure detergent – most people use too much (which co-incidentally spoils your clothing) – consider whether the clothes need to be washed – maybe just hung up and aired?

  46. Dawn says:

    I think this line of thinking can also be applied to environmentalism. Our family tries to make as big a difference as possible by using cloth napkins, recycling, composting, etc. However, we will probably never be a “Prius” family since we have an SUV and truck to haul our camper and other toys. Everyone should cut back in the area where it makes sense to them – not what everyone else or the media thinks you should do. If you can’t hack the homemade laundry soap, eat most of your meals at home to save money that way and splurge on what is enjoyable to you.

  47. laura in Atlanta says:

    “Thus, I usually tell people to make their own.”

    You can apply this to lattes, ya know. You can still have your daily latte, just make it at home.

    Poor latte, always getting beat up on. ;-)

    But yes . . nice article, Trent!

  48. Brian says:

    Great post Trent –

    re: #5 CB
    the whole 8% thing is sort of an interesting topic. not sure if enough there for a post, but it does seem to be a little problematic as I personally still see it used as the most common example to show the power of compounding interest. I understand that its just there to make a point, and even 4-5% interest would still give an impressive number in this example. But certainly looking out just the next couple decades, the question is whether we will see the pre-2007 growth of the last few decades repeat itself with enough force to justify using an 8% return as a benchmark or example, or whether the growth will be more flat or steady (steady probably actually being the best thing for the stability of the economy).

  49. WendyH says:

    RE #32 – I prefer “poor man mocha”, basically at work I’d make the cocoa with coffee instead of water.

    Regarding #7 and #27 “learning about companies we support” can also extend to your own company. My former employer actually laid people off before the corporate office decided to cut operational costs like getting less expensive coffee and stop subsidizing soda (was $.10 a can). Kind of showed where their financial priorities were.

  50. Molly says:

    Example: Why would I want to pay for bottled water when the tap water tastes delicious?

  51. “We have one wage earner, one paid for but on its last wheels car, and we eat basic but healthy food so I can be a stay at home mom and have a fixer upper house with a fenced yard near a school that can give my autistic sons the best education they can get in WI.”

    Hi Rebecca,

    Are you aware that you make more money than 90% of the people in the world, and thus are considered “rich”?

    I’m always curious when I read posts like that to understand what you think of as “rich”. Maybe it’s like my dad used to say: “How much money is enough? Just a little bit more than you already have.”


  52. Lisa says:

    I realized a few years ago that I should stop feeling guilty about buying expensive shampoo: my hair is short, I don’t wash it every day, and I am careful to use no more shampoo than necessary. A bottle of shampoo lasts me at least 3 months. So the difference between buying $8/bottle shampoo and $3/bottle shampoo is a whopping $20/year. On the other hand, I only buy lunch out once or twice a month (if that). It’s absolutely worth paying attention to how much money your frugality saves—unless you’re in a position where every penny counts, not all savings are equal.

  53. Rebecca says:

    #35 I do infact feel very rich and thank the LORD daily that we have a roof over our heads, clean drinking water and 3 meals a day. However, we are still on public assistance and I cannot buy my kids school supplies this year. I truly don’t mind doing without, but it kills me to not be able to provide for my children.

    I think anyone who lives in America as rich compared to many parts of the world, but there are many even in the US who go homeless and hungry every day.

    What makes me upset is people like Ramit (I don’t know him personally, just what he writes on his blog) but what he has is never enough for him. He always needs more, more , more. And that makes me sad, honestly. I pity him a little when I think about it. With all he has and he still wants, and thinks he needs, more. It will never be enough.

    We have many things in life, but right now in our life there is nothing left to cut. No cable, no going out, no hair cuts, no new clothes except what is absolutely needed and it comes second hand. If we had even $25 less a month we would not be able to pay all our utilities. My husb and I occasionally go without meals so my sons, who are on very restricted diets, can have the food they need. And I really can’t get my son the gym shoes he needs for this year.

  54. cp says:

    Rebecca, I feel for you! And few will understand that the care needed for 2 autistic children negates any financial advantage to you working outside the home. Good luck to you! Following a scary marriage, I as single mom of 2 for a while, and often went without food so my children could eat. Those days, for me, are over. Things will get easier! You might want to learn a skill like XML or web design (still in demand), so you can work from home when the kids are at school. I did, and got myself out of poverty. But I fully acknowledge it is not for everyone-its’ not easy! You can learn XML on your own for free via online tutorials- you just have to google search.

  55. jen1005 says:

    imo, when people begin to get concerned about how much they are paying for laundry detergent, there is likely much more going on – it’s like if they can save $3 on laundry detergent for the month, they will be able to pay for their maxed out credit cards. Price of laundry detergent should be at the bottom of anyone’s list of priorities….
    #37 there are usually some local programs that will provide for your childrens’ school needs. if not, please watch for some weekly sales. i have seen 10pk pencils for as little as 9 cents. please also look into the angel food network. they might be a great suppliment to your needs. i will keep you and your family in my prayers.

  56. Sara says:

    The problem is that a lot of people convince themselves that everything they buy is important for their happiness. They need a big-screen TV and premium cable because they value their TV shows! They need a big house because they value entertaining! They need the latest iPhone and a $100/month cell phone plan because they value keeping in touch with their friends! They need the trendiest designer clothing because they value being fashionable! And yes, they need that daily latte! It’s all crucial for their happiness!

    But seriously. Who values lattes so much that they need to spend $5 on them every day? It would be kind of sad if lattes were that important to anyone. I wouldn’t tell people they should never buy themselves treats that they enjoy, but you don’t need to buy a treat every day. You have to prioritize and limit your indulgences, and some people can afford to indulge more than others. If you’re spending more than you earn, that’s a big hint that you need to cut back on your treats, even if they make you “happy.”

  57. Jenny says:

    I absolutely agree with this post. I tried cutting out my morning Starbucks run but found I really missed not only the latte, but also the mental break from the office and the social break with my coworkers. I concluded that I was getting my money’s worth out of my daily latte and that I would be happier cutting back elsewhere. On the other hand I was not getting the same enjoyment out of lunch out and was able to cut back there by brown-bagging it every day of the week. Neither do I need cable TV or a fancy car. Others would obviously make different choices.

    Interestingly I find the same approach works with dieting – before indulging, ask yourself whether the enjoyment you get will really be worth the extra calories, and act accordingly.

  58. Claire says:

    Re #32 –
    I concur! My husband and I got a roommate (BIG savings in the apartment we realized we can’t really afford about 4 months after we signed a 2-year lease) and she brought an espresso machine with her when she moved in. Now I make my coffee exactly how I want it and I’m saving a bunch.

  59. Elinor says:

    I have read the comments from this article and I am a homemade laundry soap fan. It cost me $7/yr and cleans my clothes, not coating them light reflecting chemicals.

    I use the powered recipe, but I altered it to fit my beds needs. Tablespoon of tea tree is my secret!

  60. Eddy says:

    I’m always fascinated by the “8%” return that is always thrown around on these blogs. Where in the world can anyone get an easy 8% return per year??

  61. Jen says:

    Rebecca – if you aren’t able to afford school supplies for your children, and need public assistance, than you actually do not have “enough.” If you children are school-aged, perhaps you could get a part time job while they’re in school – maybe just earn enough to not be on public assistance, and not have to skip meals? Why does it bother you that someone like Ramit is always trying to have more and do better for himself? If you’re happy with so much less, that’s fantastic, but don’t pity him as a way to make yourself feel better.

  62. jay says:

    Back in the days… Amy Dacyczyn always advocated cutting back, tightwadding, to the point that it became uncomfortable, then add back to just where it was acceptable. She pointed out that over time, the comfort level would be reached at a lower and lower price point (for want of a better word). So while now, one needs a latte 4 days a week, maybe in six months, 2 days a week will do. The thing about being frugal is that its a dynamic process, and if one is aiming for ultimate savings, you don’t make a single set of changes, but are constantly reevaluate your practices.

  63. ML says:

    I think the overall point is that frugality does not take shape in the same way for each person. Specifically, each person has to put into place lifestyle choices that save money but also still allow them to enjoy life. For example, I think that making detergent is not a good use of my time (also, I have a high efficiency washing machine, the homemade soap would ruin it. I load up on All or Wisk HE detergent when it is on sale for $3.99 per bottle). I find other ways to save money that still allow me to have enjoyment in my life. Having a lot of money in the bank is nice but not doing fun things on occasion will make for a dull life.

  64. Systemizer says:

    The rural work-from-home family man with two cars in the driveway tells “Carrie Bradshaw” to make her own laundry detergent.


  65. Gretchen says:

    Where are you getting 8%?

  66. bobijub says:

    lattefrugal frugallatte – clean your clothes with milk.
    or evenso you can avoid using soap by cleaning your hands by brushing?
    lattefrugal frugallatte does really different meaning for each and every being.

    just a more extreme example:
    most of the people would gladly consider employing a driver for high-high-high level managers is carelessly wasting the money of the company.
    but a real owner should think that a high-high-high-level manager’job is to “manage” and not having fun with driving.

    a smilingfacecover “howto ….. in five short quick easy steps” book really is unable to give you the wisdom of properly selecting your own latte and laundry equivalents if you refuse the effort of thinking over your own economy, own soul and own existing habits.

    but anyhow. the introduction of the latte-laundry phenomenon is a good base to start thinking things over considering this aspect too.

    so start thinking. and do not refuse to learn new things. it does not hurt. it’s much easier to think if you do not have many aspects. but the outcome of the thinking can be more effective, if you really do know several aspects. one of an additional aspect can be the latte-detergent aspect.

  67. getagrip says:

    What kills me about the “latte” factor is that it’s just an example! People defend or attack it completely missing the forest for the trees. It’s just an example of how spending consistantly small amounts of money on something that’s become a routine habit need to be reexamined because they are costing you significant money, especially since most people have half a dozen such habits. It’s not just the latte. It’s the latte every morning, lunch out every day, dinner out every weekend, buying a couple of books every month, gym memberships you don’t use and haven’t canceled, subscriptions to magazines you don’t read, automatic fees to services you forgot to opt out of, etc. It’s not about the specific example, it’s about waking up and paying attention to the death by a thousand cuts you are taking in your financial life.

  68. Art says:

    Put me firmly in the “stop talking about laundry detergent” camp. I only buy liquid detergent on sale and my two person household does four to five loads a week. Making my own detergent would save us about $10-$15 a year and be a pain. Plus we wash in cold water and never had success with powdered detergent in the past.

    Unless you are doing a crazy amount of laundry or actually enjoy making your own detergent, I do not see the point with the possible exception of cutting down on packaging(we do recycle the containers).

  69. The main point of this article is very sound. Understanding what you spend money on and why is very important to becoming financially wiser. Never spending any money ever will get you out of a bind, but it doesn’t teach you how to use money and often leads to counterproductive spending binges. It comes down to making appropriate choices and recognizing that what is appropriate is an individual thing. (Much like the idea of being ‘rich’ or ‘comfortable’ is rather subjective.)

  70. Becky says:

    @#8 Kathy – DITTO to your response!!

    The latte factor is useful. However, when I heard about it, I felt, “well, how about for people to never had the daily latte…how about some other suggestions.”

    I did cut cable. Thrilled with not just the money saved, but the time I gained, and the improved sleep!

    I would say my problem lies in having so many people around me poo-poo the idea of how easy it is to make basic coffee at home. I have a hard time locating other “frugal people” for that support network, as opposed to being made to feel cheap. It’s an emotional downer. It’s not easy to just “change friends/jobs”.

  71. Stern says:

    Dude – good advice on being frugal – completely impractical on the 8% return tho…especially for people only investing their latte money.

    You gain credibility with your examples of how to cut back & save. Kind of ruin your credibility when you toss numbers out like that and no one can replicate. Just 2 cents bro…thanks.

  72. kate says:

    I’m good at being frugal…and then I suddenly blow it and treat myself. The mistake I make is to not put the money I save aside. And, the thing I don’t remember is that frugality is not an end in itself. Rather, if I don’t spend money on things that don’t matter all that much to me, then I have it available for things that do. Years ago, when I waitressed, I would take my tips and put them in empty cans – labeled with what I wanted to save for. I think I need to adopt a similar strategy with my paycheck and with what I save when I am frugal. Helpful article. Thanks.

  73. JP says:

    Suggested revision:

    “Investing it at 8% interest”

    Those days are long gone. Plug in something more appropriate for the next 20 years, like 4-5%.

  74. Thousand Pennies says:

    Great post–I linked it at:


    It’s a great insight into an established concept.

  75. Ryan says:

    8% over two decades? Good luck with that.

  76. Aaron says:

    According to this appliance repairman in the NYTimes, most people use 10-15 times the soap they actually need in their dishwasher and washing machines. So there’s no need to buy up ingredients to make your own soap . . . just use 1/10th the amount you normally would. Same stain and grease-fighting power, at 10% the cost.

  77. Amanda says:

    To defend the detergent I mix 1 c borax 1 c washing soda 1 bar soap, keep it dry and use 1 level tbsp. Takes a 15 min to make and simple to store.

  78. Carolyn says:

    I love what you’re saying in this article, because it’s SO TRUE! There are plenty of ways that people can save money, but at a certain point you have to also analyze what you’d be missing and how that would make you feel. If it’s truly important to you then you should find ways to incorporate it into your life, which it doesn’t seem like most frugal blogs take into account. Nicely written!

  79. Doug Warshauer says:

    I love the idea of the “laundry detergent factor.” That is a a tag that should stick.

  80. Belinda says:

    The premise of the “latte factor” is flawed, in my opinion, as a means of promoting frugality and responsible finance. The people who are buying lattes are generally middle income people who can afford them. It does chip away at their financial independence in small increments, and getting people to realize that is good.

    However, for most people struggling financially – the 10% of unemployed Americans, for instance – lattes are a luxury they never see. They are literally trying to put food on the table. It kills me that people would feel deprived by having to miss a daily cup of expensive coffee when others are struggling just to eat.

    For those in true financial straits, the “laundry detergent factor” is much more applicable. Teaching people how to make NECESSARY items that they are used to paying Proctor & Gamble for is very effective. Let’s continue down that path and quit harping about luxury lattes.

  81. Aaron says:

    Love the site!! I just found it through a GTD retweet for one of the GTD articles. In this one I have to comment about my own experience with homemade laundry soap. Horrible! The clothes after about a year are absolutely dingy. They just never would get “clean”. They were clean from a germ point, but not a visual point. So I got a box of GAIN and found that only 1/3 to 1/2 of the recommended amount actually works. So with a FULL load I just put in 1/3 of a cup. Our clothes are actually brighter and cleaner than with the homemade.

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