I have heard of it, I have read about it a year ago, or maybe more. Latte effect, as I understand, is a term used by financial analysts which means cutting back on extra expenses, like things that we can actually live without, and by doing so, we can save up the money that we normally (unconsciously), out of habit, spend on a regular basis, on lattes, or coffee in general, for coffee-drinkers (or caffeine addicts), cigarettes for smokers, spa treatments mostly for women, and any other "vices" or wants.
Last year, I tried to cut back on one of my "vices" (not that I have a lot). I used to buy my favorite fashion magazine, Preview, every month, since 2007(?). If I remember it right, it was P110 per issue back then, now, it's P140. I did start not to buy every issue since last year, what I do is to read first the cover which gives a preview of what's inside, if I really like the issue and the "cover girl," I would buy it, if not, I wouldn't, but the thing is, I was not able to set aside the money that I saved from not buying an issue so nothing happened, latte (or more appropriately "magazine") effect in this case has no effect on my consciousness and savings.
This time, starting today, I will not only cut back on magazines, but I will cut back on of any of my vices/wants and I will call it "out-of-necessity-zone" effect. I will consciously set aside the money that I will be able to save from resisting Preview(140 a month) and any other fashion magazines, I also stopped ordering, since the start of this week, my daily calamansi juice (P240 a month) and all other vices/wants that I will be able to get rid of such as my occasional craving for Starbucks caramel macchiato and tumblers, hair treatments, manicure/pedicure and other spa treatments, shoes, bags and clothes. Aside from P380 (P140+P240) of automatic savings, any amount that will be left in my wallet (before the wallet gets replenished every payday), will go to what I will call "out-of-necessity-zone" savings. This means, I will cut back on my wants to be able to save for the more important things, things that I "desire!"
The vices/wants that I indicated above are easy for me to resist (I think ;)) if I will just focus on four things that I truly desire, these four things, at this time, cannot be categorized as necessities, but since I really desire them, I am very much willing to give up all my vices/wants just to get these things.
These four things are (1) Nook ebook reader, (2) Kate Spade case for Nook, (3) Europe trip, and (4) LV bags. Item 1 goes hand-in-hand with item 2 while item 3 goes hand-in-hand with item 4.
Nook ebook reader, as you may know, I love books and now, I actually find time to read them. ;) But since I don't have yet my own space, much more, a space for books or a mini-library, it is more practical to buy or download ebooks to save physical space, and for sure, a Nook is lighter than a book. In my case, I always bring a book with me, so I can read on my way to work and on my way home, it's ok if the book is light and thin, but if not, I have to consider carrying a bigger bag (or a second bag) just to be able to bring a book. I hope I was able to convince you that this is more of a necessity for someone who loves to read. ;) Though I have to exempt some books which have very pretty cover and which definitely deserve to have a space in my future mini-library. ;)
Kate Spade case for Nook, I guess, I will not be able to sway you that this particular case is a necessity because there are lots of available casing that are cheaper for Nook. I love this case because the front print is pretty, and the fact that the inside (and back) is red! ;)
Europe trip, well, I think this is self-explanatory, who wouldn't want to have a vacation on this part of the globe. Travelling to atleast 5 European countries is one of my greatest dreams and I am very positive that it will become a reality. Going to Europe means saving lots of money especially when I would like my husband(and kids), parents and sister to travel with me. ;)
LV bags(I commit to buy an LV bag only when I'm in Europe), obviously, this is not a necessity, it is very possible that after some time I will become more practical and instead of buying an LV bag, I would prefer to put the money on stocks or mutual fund or other investment facilities. Though, they say, owning a luxury bag is also an investment! ;)
For visual reinforcement, I will look for a piggy bank for my "out-of-necessity-zone" savings and I will label it "Europe+LV+Nook+Kate Spade." Each time the money reaches P5K, I will get it and most probably invest it on stocks or mutual fund so it will grow or if I'm feeling conservative, I can just deposit it in a bank, atleast it earns a few interests than to keep it long term in the piggy bank.
Today, 30th of the month, there's P350 left on my wallet from my 2-week allowance. This directly goes to piggy! ;)
Last year, I tried to cut back on one of my "vices" (not that I have a lot). I used to buy my favorite fashion magazine, Preview, every month, since 2007(?). If I remember it right, it was P110 per issue back then, now, it's P140. I did start not to buy every issue since last year, what I do is to read first the cover which gives a preview of what's inside, if I really like the issue and the "cover girl," I would buy it, if not, I wouldn't, but the thing is, I was not able to set aside the money that I saved from not buying an issue so nothing happened, latte (or more appropriately "magazine") effect in this case has no effect on my consciousness and savings.
This time, starting today, I will not only cut back on magazines, but I will cut back on of any of my vices/wants and I will call it "out-of-necessity-zone" effect. I will consciously set aside the money that I will be able to save from resisting Preview(140 a month) and any other fashion magazines, I also stopped ordering, since the start of this week, my daily calamansi juice (P240 a month) and all other vices/wants that I will be able to get rid of such as my occasional craving for Starbucks caramel macchiato and tumblers, hair treatments, manicure/pedicure and other spa treatments, shoes, bags and clothes. Aside from P380 (P140+P240) of automatic savings, any amount that will be left in my wallet (before the wallet gets replenished every payday), will go to what I will call "out-of-necessity-zone" savings. This means, I will cut back on my wants to be able to save for the more important things, things that I "desire!"
The vices/wants that I indicated above are easy for me to resist (I think ;)) if I will just focus on four things that I truly desire, these four things, at this time, cannot be categorized as necessities, but since I really desire them, I am very much willing to give up all my vices/wants just to get these things.
These four things are (1) Nook ebook reader, (2) Kate Spade case for Nook, (3) Europe trip, and (4) LV bags. Item 1 goes hand-in-hand with item 2 while item 3 goes hand-in-hand with item 4.
Europe trip, well, I think this is self-explanatory, who wouldn't want to have a vacation on this part of the globe. Travelling to atleast 5 European countries is one of my greatest dreams and I am very positive that it will become a reality. Going to Europe means saving lots of money especially when I would like my husband(and kids), parents and sister to travel with me. ;)
LV bags(I commit to buy an LV bag only when I'm in Europe), obviously, this is not a necessity, it is very possible that after some time I will become more practical and instead of buying an LV bag, I would prefer to put the money on stocks or mutual fund or other investment facilities. Though, they say, owning a luxury bag is also an investment! ;)
For visual reinforcement, I will look for a piggy bank for my "out-of-necessity-zone" savings and I will label it "Europe+LV+Nook+Kate Spade." Each time the money reaches P5K, I will get it and most probably invest it on stocks or mutual fund so it will grow or if I'm feeling conservative, I can just deposit it in a bank, atleast it earns a few interests than to keep it long term in the piggy bank.
Today, 30th of the month, there's P350 left on my wallet from my 2-week allowance. This directly goes to piggy! ;)
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