Make Big Changes to Save Money/ February 8th, 2016
This may be an unpopular opinion, but the “Latte Factor” is dumb financial advice.
If you’re in a lot of debt and are struggling to make ends meet, you probably already know that spending $3 to $5 on your morning coffee isn’t a good idea. And, even if you’re not in a dire financial struggle, that money could certainly be spent better elsewhere.
But chances are it’s not the coffee breaking the budget. Five dollars isn’t much for a small indulgence, and it’s not the spending cut that’s going to fix your problems, particularly for the thousands of Americans struggling with outsize student loan debt.
More practical advice would include bigger changes: moving to a cheaper apartment, cutting unnecessary monthly bills like cable, and, maybe most crucially—earning more money.
Up your income
Upping your income no longer means waiting tables or taking a retail job that consumes your whole weekend. The Internet makes it possible to earn money from blogging, babysitting gigs, selling your handmade goods, renting an extra room to out-of-town guests, or becoming an Uber or Lyft driver.
Finding a side hustle does more for you than helping your financial goals. It can help your career by giving you the chance to earn more money outside of your day job, while simultaneously sharpening a new skillset.
Working on the side also provides you the opportunity to get paid for doing what you love, such as painting or making car repairs—which you might not experience at your day job.
Take heed, however, and remember to keep solid records for tax time. Additionally, remember why you developed a side hustle in the first place. This extra income is aimed to get you financially free, not fuel bad habits.
Put your extra money toward debt and emergency savings, invest in an IRA (individual retirement account), and don’t forget to enjoy a small indulgence from time to time—like your morning coffee, for instance.
Your wallet, your future self, and your mental health will thank you.