You Need to Sweat the Small Stuff


The other day at work my co-workers and I were viewing a webinar about the state of the economy and some of the things we can do to ensure that as times get tougher financially we have all of our asses bases covered. (Remember, I work as a credit analyst at an agricultural lending firm.)

Toward the end of the presentation, the speaker was talking about how different generations of our customers will handle financial adversity differently. They were all especially interested in how millennials and other new borrowers would handle the drop in commodity prices and the potential for financial loss. Some of the traditional ways to save money were mentioned: cut down on family living costs, give up non-income producing asses (boats, luxury vehicles, etc.), and then the presenter said the most interesting thing of all:

You Need to Sweat the Small Stuff

When I heard that phrase, I immediately thought of the latte factor which is mentioned so often throughout the personal finance community.

What is the Latte Factor?

Is the latte factor all about how often you visit Starbucks? Well, kind of.

The latte factor is more about monitoring and limiting the small purchases you make on a daily basis without any conscious thought, like your trips to Starbucks. It’s about watching those nickles and dimes leave you wallet and bank account, and making sure they are going toward things that either further your financial progress or make you inherently happy instead of just random purchases. It’s about being Financially Real and it’s about losing the “it’s only $1, what’s the harm?” mentality and kicking it to the curb.

Sure, making cuts to large categories of spending is important to help improve your financial bottom line, but it’s the little things that often make-or-break us during tough times. In fact, many of the stories you read around the personal finance community that detail how people got into debt are because they didn’t realize how quickly all those little purchases can add up to a huge mountain of debt.

How Do You Sweat the Small Stuff?

In order to help you get in the habit of sweating the small stuff and avoiding the latte factor, I suggest tracking your spending carefully for a month or two to see what you are really spending in each category. Often when we set up our monthly budgets we base them off of what we want to spend instead of a historical average of what we are actually spending. When we skip this crucial step we are setting ourselves up for budget failure, which is never a good way to get started on the right financial foot.

Although I still over-spend my budget in some areas, I did make an effort to base my budget off of historical spending. I wasn’t happy with my spending in some areas but instead of creating an unrealistic budget, I’ve slowly adjusted it down over time until I reached a level that I’m happy with.

After the presenter at my webinar said we need to be sweating the small stuff, he also said finding 1,000 things to do 1% better is way easier than finding only one thing to do 1000% percent better or even finding  two or three things to do 400-500% better. Doing 1,000 things 1% better will still improve your situation the same amount, but without making you feel deprived along the way.

Do you sweat the small stuff? Do you think we should sweat the small stuff?

*Part of Financially Savvy Saturdays on brokeGIRLrich, GoldBean Blog and Debt Free Divas*

Photo courtesy of: Vivian Evans

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6 thoughts to “You Need to Sweat the Small Stuff”

  1. I think it’s really important to be aware of the small stuff. When you’re just starting out, they can actually be budget busters, but even more – as you progress, if you’re conscious of where you spend your money, you can figure out ways to save and frugally enjoy them, either by joining discount clubs or frequent buyer cards or any other number of ways.

  2. What a great way to look at things, Kayla. We thought our budget was as controlled as it could be but were alarmed to find that we were “losing” over $100 a month to Starbucks and other fast food joints. When it’s not a $50 bill at Olive Garden I ay less attention to it…and that is the problem!

  3. I couldn’t agree with this more! I’ve always been pretty good about tracking spending using Mint, but for the next few months I’ll be doing it manually – receipts and Excel here I come! – to pay more attention to the little things. They definitely add up, and can have a huge impact on monthly savings. The one thing I found was helpful (and surprising) was how much I had coming out of my credit card for recurring payments I had forgotten about!

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