April 23, 2010
Look Beyond the “Latte Factor”
You often hear about money management strategies that suggest you run a fine-toothed comb through all of your expenses, down to the penny.
There’s nothing wrong with doing this – in fact, I encourage it for lawyers who are looking to get a handle on their spending (and saving) with an eye to someday leaving the law.
However, unless you have a serious caffeine habit, expenses of the Starbucks variety probably aren’t what’s keeping you locked in your golden handcuffs. Sure, you may be able to pare away a few hundred or even a few thousand dollars a year by cutting back on the little things, but a dramatic reduction in your spending is probably going to require more dramatic measures.
What are you spending on your mortgage every year? Your car? Your child’s private school tuition? These are the big-ticket sort of items that probably account for a large percentage of your outflow, and the sort of things you need to be looking at if you want to dramatically reduce your expenses.
Cutting back in these areas is far more difficult (emotionally, logistically, you name it) than passing up a few lattes each week, but it’s the tough choices that lead to the biggest changes.
