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Habits

Latte factor calculator

A small spend, repeated. What it adds up to, and what it could have grown to.

By Nabeel Mustafa. Updated .

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$
5

A weekday coffee is 5. Two a day is 10 or 14.

10 years
%

Leave at 0 to see only what you would keep. Any number here is an assumption, not a promise.

After 10 years

$11,700

$1,170 a year, not counting any interest

A week
$23
A month
$98
A year
$1,170
Year 1 to year 10, starting from zero

A calculator answers once. If you want this number to move over months, that needs a record: a free habit tracker that shows the whole month on one screen.

Track it as a habit

Where the name comes from

The latte factor is a phrase from the personal finance writer David Bach: small daily spends, the coffee on the way to work being the famous example, add up to more than people think. The arithmetic is simple and still surprising. A 4.50 coffee five times a week is 1,170 a year.

It has fair critics too. Cutting coffee alone will not fix a budget where rent is the problem, and treating every small pleasure as a leak is a quick route to a joyless spreadsheet. Use the number to choose, not to feel bad.

The growth box is optional for a reason

The return rate starts at zero. Any positive default would be a forecast, and a forecast of investment returns does not belong on a page about coffee. If you do enter a rate, the page compounds monthly and shows the growth separately from the money you kept, so you can see how much of the big number is your saving and how much is the assumption.

Figures are before inflation, and prices change. Treat the ten-year number as an order of magnitude.

Swap, do not just stop

The habits that are easiest to cut are the ones with a cheaper version that scratches the same itch: coffee made at home and drunk on the same walk, a packed lunch twice a week instead of five. Track the swap for a month. If it holds, move the difference somewhere you can watch it grow, or it will be spent on something else by week three.

Work out what a small habit costs

  1. Enter the cost each time

    What you actually pay, including the pastry that comes with it.

  2. Set how many times a week

    Be honest about weekends.

  3. Choose how many years

    Ten is the usual comparison.

  4. Optionally add a yearly return

    Leave it at zero to see only what you keep.

Questions people ask

How much do I spend on coffee a year?

Cost per coffee times coffees a week times 52. At 4.50 five times a week, that is 1,170 a year.

What is the latte factor?

The idea, popularised by David Bach, that small repeated spends add up to large sums over years, especially if the money is invested instead.

Which return rate should I use?

There is no right one, which is why the default is zero. If you use one, use a rate you would be comfortable planning on, and read the result as a rough guide.

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Numbers are easy. Doing it every day is the hard part.

A calculator tells you where you are once. If the thing you actually want is to keep something up, that takes a record rather than a result.

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