UNPOPULAR OPINION: The “Latte Factor” is not good financial advice.
Sure, if you’re in a lot of debt or are struggling to make ends meet, you may already know that spending $3-$5 on your morning coffee isn’t a good idea. And, even if you’re not in a dire financial struggle, your money could certainly be spent better elsewhere.
But let’s go back to that first point. If your best friend—let’s call her Susan—came to you and lamented about savings struggles and debt repayment, you might sit down and look at her spending with her.
Chances are, Susan isn’t breaking her budget on coffee. Five dollars isn’t much for a small indulgence. More practical advice would be moving to a cheaper apartment or getting a roommate, cutting unnecessary expenses like cable (Netflix is WAY better, anyway), eliminating monthly bank fees by switching to a credit union, and earning more money.
Yes—that’s right. It’s time to get a side hustle! Gone are the days of picking up a bartending or retail job that takes up your whole weekend. The Internet makes it possible to earn money from blogging, find babysitting gigs, and sell your handmade goods.
Side hustling 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, all while sharpening your skills. Working on the side also gives you the chance to do more of what you love, like painting or making car repairs, that 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 towards debt and emergency savings, invest in an IRA, and don’t forget to take a small indulgence here or there. Your wallet, your future self, and your mental health will thank you.
Do you have a side hustle success story? We’d love to hear all about it below!