There’s a piece of conventional financial wisdom called the Latte Factor. It goes like this: if you’re looking to save money or pay off debt, start by skipping small luxuries like lattes and instead put that money toward your financial goals. The single digit savings will add up to a significant amount over time. All because you had the fortitude to practice a little self-control. It’s a simple, effective way to find some wiggle room in your budget and a great first step toward living a frugal lifestyle.
The Latte Factor is both virtuous and practical. It gives its frugal practitioner a sense of self-righteous superiority over those who continue to waste their money on overpriced, over-sweetened, caffeinated beverages every day. And because it’s such a simple solution, those preaching the gospel of frugality peddle it like a magic elixir. Can’t seem to save money? Just skip the latte! It works miracles!
Yet to those who truly struggle with systemic poverty, getting advice about the Latte Factor feels horribly condescending. In fact, being told that skipping a small luxury here and there will raise you up out of your low-income status feels downright cruel and deliberately ignorant. Because in cases of economic disenfranchisement, a lack of frugality is not the root of the problem.
In fact, dispensing advice about the Latte Factor to those who live one late paycheck or medical emergency away from homelessness or complete financial ruin sounds a helluva lot like poor shaming.
The Latte Factor isn’t bad advice. It’s actually great advice for a simple reason. Limiting your spending automatically increases the amount of money you have at your disposal. And that increases the amount of money you can potentially save or invest. And arguably, the less money you make, the more relevant being frugal becomes. So we are definitely not saying that “Be more frugal!” is bad advice. But it is not the most applicable advice for all kinds of people who live in all kinds of poverty.
What we mean by “poor shaming”
Let’s start with an example:
This meme showed up on the Mr. Money Mustache forum recently, on the Anti-Mustachian Wall of Shame and Comedy. And the point-missers came out of the woodwork. They lamented how it enabled bad financial decision making and perpetuated a life of wasteful spending. (To be fair, some people eventually brought the conversation around to admitting that the Latte Factor had literally nothing to do with the problems of systemic poverty.) They’re totally right that being frugal and deploying the Latte Factor can help you save money by leaps and bounds! The problem is, that’s not what the author of the meme is talking about. Like, at all.
Income inequality is a thing. Wage stagnation is a thing. Skyrocketing cost of living, real estate prices, and tuition are a thing. Lack of opportunity is a thing. And if you’re starting the financial race with all of these albatrosses tied around your neck, then it’s going to be much, much harder to get ahead simply by being frugal. You need other weapons in your arsenal as well. Touting the Latte Factor as a solution to all of these problems not only misses the point, it avoids the problem entirely.
It’s like telling your dentist, “I never had access to dental care as a child. Now I have all these cavities that need to be filled,” only for him to tell you, “No you don’t. You just need to floss every day.”
Here’s more on income inequality:
- It’s More Expensive to Be Poor Than to Be Rich
- Why Are Poor People Poor and Rich People Rich?
- Is Gentrification Just Artisanal, Small-Batch Displacement of the Poor?
- On Financial Discipline, Generational Poverty, and Marshmallows
- Bitchtastic Book Review: Hand to Mouth by Linda Tirado
- Coronavirus Reveals America’s Pre-existing Conditions, Part 1: Healthcare, Housing, and Labor Rights
The Latte Factor is a middle class concern
Of course it’s a good idea to be frugal. No one’s disputing that fact! Half the articles we Bitches write are about how to cut back on monetary output by buying shit secondhand, canceling gym memberships, taking advantage of free stuff, and not spending money on literal shit. We believe in frugality because it fucking works.
But cutting back on wasteful spending is a tactic for those who have money to waste in the first place. In other words, the Latte Factor is a fundamentally middle class concern. If you’re already at rock bottom and barely scraping by, then you’re dealing with bigger problems than a few dollars here and there spent on coffee.
The poor don’t need anyone to tell them to cut back on wasteful spending and give frugality a try. (For the purposes of this article, people living at, near, or below the federal poverty level.) They’re already shopping the almost-expired manager’s specials at the grocery store and turning the heat off at night. And they are making enormous sacrifices to feed their children or keep a roof over their heads. They’re working like dogs for wages that would make anyone with options laugh out loud.
They don’t need anyone to remind them that they could save a little money by not buying a latte. They are already painfully aware of the value of that money every second of their lives.
The comfortably middle class, on the other hand, could stand a reminder about the snowballing value of latte money. I remind myself of this often when I’m considering my savings or plans for early retirement. It never hurts to trim the fat! My life is comfortable, especially now that I’ve paid off my student loans. I can afford decadent indulgences like a fancy, frothy, barista-crafted drink every once in awhile. Or a new book. Netflix. Craft beer. Concert tickets. Lunch out with friends. All of this stunning luxury is easily within my grasp and I can cut back on it at any time.
But what if that small latte was the only extravagance I could afford? The only thing that made me feel hopeful and human all week? Well then I’d feel righteously furious at anyone who zeroed in on that one morale-boosting latte as both the root and the cure for my financial ailments.
Practice compassion instead of shaming the poor
When I was determined to pay off my student loans years ahead of schedule, I lived as lean as possible so I could put every dollar toward my student loan debt. I deployed the Latte Factor with fantastic results.
When my coworkers invited me to walk to the coffee shop with them, I’d join them on the walk and not buy anything. After several weeks my coworkers stopped asking why I never paid for lattes anymore.
One day I had a particularly fucktastical day at work. I was cranky and tired. I wanted a little something to make me feel better. So after months of deprivation, I bought myself a goddamn latte. A big one. With extra everything. This thing was a creamy, sugary mountain of decadent self-indulgence. It cost less than $5.
And one of my coworkers, who knew about my financial goals, gave me shit for it. “Wait a minute, should you be buying that latte when you still have student loans to pay off? What a slacker.”
Friends? I lost my goddamn mind. I let him have it. Chewed him out right then and there in the coffee shop in front of everyone because I. Was. Tired. I had gone without simple, cheap luxuries for months. I had poured everything I had into my debt. And god fucking dammit, I was going to spend $4.25 on a latte and I was going to do it guilt-free because I deserved one tiny taste of happiness and luxury after being so fucking disciplined for so long.
He was teasing me, of course. And my reaction was more about my stress than about his silly comment. But it fucking hurt to feel judged for something so small when in every other aspect of my life I was working my ass off to be as frugal and financially efficient as possible.
The exhaustion of grinding poverty
I often think of that moment when I see people shaming Food Stamp users for buying something other than beans and rice. Or when people talk about how the poor wouldn’t be “quite so poor” if they’d just stop drinking, smoking, buying McDonald’s, paying for cable TV, buying their children toys for Christmas, [insert harmless human luxury here].
Because if I got that offended and exasperated while I had the option to pull back on my large debt payments… how must it feel to be scolded for a latte when that is the one humanizing treat you can ever afford to give yourself?
How must it feel to be told that your hourly wage of $7.25 and your rent that is 40% of your annual income are not what’s keeping you poor, it’s that small hot coffee you bought at Dunkin’ Donuts this morning? What does it feel like to be told that your poverty is a moral failing that has nothing to do with systemic income inequality and everything to do with your lack of intelligence, virtue, and willpower? How must it feel to be told that you should be ashamed for trying to feel some small comfort in life when you’ve just been served an eviction notice?
Being frugal works to build savings and kill debt… when you have enough money to survive. Otherwise it’s just a method of treading water.
The Latte Factor is not going to solve the fact that inflation has vastly outpaced wages in recent decades. It’s not going to solve the education gap, or the gender and racial wage gaps. It’s not going to stop soaring housing and healthcare prices or gentrification. And it’s not going to save someone with no emergency fund who just got a $100,000 hospital bill.
Do not shame the poor by oversimplifying their financial situation to money wasted on lattes. Let them buy the $7 chocolate bar without your fucking commentary. They know it pays to be frugal. In fact, they know no other way.
39 thoughts to “The Latte Factor, Poor Shaming, and Economic Compassion”
Yes, yes, yes!
And the real messed up thing is that poverty can affect the way you think — not having money can actually make you worse with money; it’s a horrible cycle. If you do not currently listen to Bad With Money with Gaby Dunn, you have to right this second. http://www.stitcher.com/podcast/panoply/bad-with-money/e/gaby-gets-her-head-examined-aka-plan-bay-46138591
Another really messed up thing is people thinking they got where they are based purely on skill/hard work – that luck had nothing to do with it. There are some studies where two people play a game, and one has a significant handicap. When the “rich” person beats the “poor” person, they attribute it more to skill, rather than luck, despite the fact that the game started off rigged (and in a very obvious way, no less)!
tldr: humans have stupid brains that make us mean. Grrrrr.
Well hello, new favorite podcast! Felicity, I knew we were going to get along. 😀
I find those kinds of studies fascinating, particularly because I got out of the habit of making those erroneous luck vs. skill (ie. privilege vs. hard work) judgments myself only a few years ago. It can be tough to recognize internal biases and shift direction towards a place of compassion instead.
Haha, I knew with a site name like “Bitches Get Riches” I’d like you guys. Then of course I started reading articles and was hooked!
Bad With Money is definitely my favorite podcast right now. Season 2 coming out soon!
It is really hard not to judge sometime, or not to look at your own privilege – sometimes especially so if you are liberal and realize privilege exists. It’s like “I can’t be racist, I have black friends!” XD
Wow yes! I remember reading a story about a teacher who had kids throw paper balls into the trashcan at the front of the room and earning a reward. Obviously the kids who were sitting at the front made more shots in the basket but then attributed their success to skill.
I love that metaphor. What a perfect illustration of financial privilege for kids!
Being broke is exhausting. I have never been poor and never truly broke, but the times where money was a struggle were a BITCH. I cannot imagine living like that for any length of time.
I grew up in a lower middle class family and never really broke out of it. As an adult and a blogger, I write about my frugal lifestyle, which was born from necessity more than choice. Sometimes I have problems figuring out what I’m going to write because I’m writing for a demographic that I’ve never been a part of.
This is a great post. I really appreciate someone who tries to see things from something different than the middle class perspective.
Thank you so, so much. Your comment means the world to me.
This was a tough one to write. I really worried that people who have never experienced an upbringing like yours just… wouldn’t get it. But I’m so grateful to hear that it is being appreciated in the way I intended. Thank you, and I can’t wait to check out your blog!
I agree with the poor mentality being real and them feeling trapped and worse with money. It does take compassion and education to help them begin to feel normal and have a way out. We have food stamps and some assistance to keep them going along but no real education programs to teach these people how to better themselves. If only there was a place that actually bussed these people in free of charge to teach them life skills like budgeting and interest calculation instead of standardized test material….
Also, little treats are fucking fantastic for people of all budgets. When my family was poor growing and my room was a cold unfinished basement full of spiders, we got McDonald’s maybe once every few months. This was AMAZING. It also got us a free toy from the Happy Meal so killing two birds by my parents there!
It all is an exercise in moderation and understanding that while you may not be able to have a $100 night out every week, A fast food run or delicious Iced White Chocolate Mocha with an extra shot and light whip for $6.72 once a month can be fantastic for a person.
As always, great post and thanks for the perspective.
Yussss. This post is so on point. I happen to love the Latte Factor – but I am a middle class white person. For me, cutting out a few five-dollar lattes a month means I can throw some extra money at my student debt, or toss it into a vacation fund. Talk about privilege.
Cutting out a few lattes a month has never been the difference between me being able to make my rent or not, and it is ridiculous and condescending to apply the Latte Factor to low-income people who face genuine poverty.
This post also takes me to countless experiences I have had with friends and acquaintances basically any time we encounter a homeless person downtown. I like to chat with them, give them a couple bucks. It’s always inevitably met with “You really shouldn’t give them money, they’re just going to go spend it on cigarettes or drugs.” Yep, maybe. And I don’t care. They are an autonomous human, they can spend it on whatever they damn well please. It’s not my business. It’s not my place to judge. I don’t understand this person’s life or situation – who am I to dictate what happens with those dollars? Those dollars are given freely because homeless people are PEOPLE – they are people who need compassion, empathy, and a better fucking system than the one that we have. If my dollars can get them a coffee or a smoke, and make them feel like a human again for a few minutes, that is money well-spent. Ugh poor shaming is SO real.
Thank you for this incredible post.
And thank YOU for commenting and sharing your experience. I love this story. It takes so little effort to treat other people like people, with compassion rather than judgment. You’re doing it right.
Wow, this article is great and I LOVE this comment Kate. Can I be honest and say I’ve been one of those people judging the homeless? After reading your thoughts here, I’ll definitely think about this differently!
As someone in the middle class, it’s important for me to recognize my privilege and not judge those less fortunate than me.
Thank you both for the new point of view!
Thank you so much for reading and for this sweet comment! There are few things I admire more in a person than the willingness and ability to change their mind based on new information. I think you’re awesome. 😀
Yes – this! Just let people make their own choices.
You know this is interesting. So, we have “professional panhandlers,” in our area. These are people that are out at a stoplight just collecting money. They even have a dog. I currently work three jobs. One of which is a “wine associate” at a local wine/liquor store. (Because I don’t need a FUCKING LATTE … I NEED WINE – forgive, slight rant.) Anywho, our local panhandlers come into the store on a regular basis. They are very nice. One of my co-workers asked them about possibly working part-time. They politely declined. You see…one can make $70 per hour panhandling. My husband and I have debated it, and we have said, that if our heart tells us to give a dollar or two we do. At the same time, our charity of choice is Salvation Army. They have some amazing success stories to assisting those from poverty into self-sufficiency.
The vast majority of panhandlers make less than $50 a day. Less than $25 is common.
The most successful panhandlers in the country, according to research, can make $50 an hour on a good day. Those top panhandlers do often include a dog and a war veteran to get the best results.
I completely believe that your professionals are earning more than minimum wage for their efforts, but I’m dubious about them routinely earning more than the most successful beggars in the country – and if they actually did, why on earth would they SAY that to your coworkers? That’s just asking to be hated, campaigned against, or robbed.
If they actually were earning $70 an hour, they’d already be doing an amazing job of getting themselves out of poverty! But I suspect you misheard and it was more like $70 a day.
Sorry folks but the latte factor is a thing. Do the math. $20 a week is over $1000 a year, and wouldn’t we all like to have an extra $1000 at the end of the year?
I’ve been very poor. Like, buy blue or grey sneakers so when they started to look worn, get 2 Sanford’s markers and color ’em black – they’d look sharp again.
I live on a bit over $12k a year right now and I get by OK by avoiding recurring expenses like the plague. No gym membership, no storage unit, no smartphone with its $50-$75 a month contract. I get around by bike whenever possible. Otherwise it’s the bus. I have a hobby (music) that pays me, and is a possible back-up vocation.
Yeah guys rolling in money like Mr. Moustache come off as douches because they did have numerous advantages, but saving snips and string really does work.
Yep, we totally agree.
I’ve also been “buy blue or grey sneakers so when they started to look worn, get 2 Sanford’s markers and color ’em black – they’d look sharp again.” level poor… And you know what I wasn’t doing at that point… Like… Ever? _Buying enough Lattes a week to spend $20 a week buying lattes_; the “latte factor” is not, in fact, actually a thing for one glaring reason: When you’re so poor you can only marginally afford the barest and most basic of necessities, you can’t spend money on lattes that you don’t have available to spend in the first place.
But you know what? Even if someone trying to save money did manage to come into $5, and they decided to spend it on a latte… I’m still not going to ride their ass about it for one equally glaring reason: Lattes are not the problem… Lack of living wages, job stability, and affordable food + housing are; pinching every conceivable penny you can will not make any leaps or bounds in saving for an emergency fund you needed like two months ago. So that $5 in their bank will do literally nothing for them if they’re already so strapped for cash that having a measly $5 is a miracle in the first place.
Really appreciate this post.
Thank you so much for reading!
PIGGY I FUCKING LOVE YOU! I do. Understanding the true challenge of the poor is more than a latte – or in my case – – wine. (Yes, I’m a wine o – if you get bored, I have a twitter account – @A_Wine_O). Anywho…it is a matter of putting food on the table – LITERALLY! It is about survival. Those who have only lived in the middle class will never understand. My mother taught in a low income school, and would come home crying because of the challenges that parents faced. Kids without a pencil, is not because they weren’t careful or wasteful, because they had to sleep in a car and the sister needed it to take a test. There is a great challenge, it is called the $29 a week food challenge (http://goop.com/my-29-food-stamp-challenge-and-the-recipes-brouhaha-that-ensued/). Plus to quote Eminem “Food stamps don’t buy diapers!” I also hate, why don’t they get another job? OMG seriously, yes I have three jobs, but I also do not have children, and I have an education. Jobs (unlike many think) are NOT a dime a dozen. They are hard to come by. Compassion is important in life. Thank you!
AND I LOVE YOU!!! Thank you so much for reading and for such a sweet comment. I kind of want to try the Food Stamp Challenge now…
Hey, I like your blog but I feel like sometimes you talk about the way the world is too much and not enough about practical solutions for people who are in this bad situations regarding how they can get out of them. I also don’t agree with the frugality concept. I agree with WSP philosophy more. I believe that it’s more important to focus on maximizing income rather than on minimizing expenses (so I don’t really agree with the latte argument for middle class either).
Thanks for the feedback!
Bless you, Piggy, honey! (I’m also beaming with a bit of pride because I can’t help but feel like my article and our Twitter snark inspired this a little and good on you for putting it so much more eloquently than I could have).
The problem here isn’t money, it’s privilege. A $5 specialty coffee is a “nice thing,” and there’s a huge pervasive cultural idea in North America that people below a certain income point aren’t supposed to have nice things. We’re supposed to buy low quality stuff for low prices, as a reflection of our low net worth.
The point of frugality is to improve your quality of life on the income you have. Often this looks like buying less but better, and people can get really rude and judgmental about the “better” part. Especially if it’s something the more affluent person is pretending they can’t afford while they hemorrhage money on literally everything else that you don’t buy.
Very, VERY well said.
Fantastic article, Piggy! Really glad you mentioned medical debt. A $4 coffee is nothing compared to $20,000+ dollars of medical debt incurred with a healthy pregnancy & complication-free delivery.
I highly recommend the book Scarcity. It explains how “lack of” hard wires our brains. As someone who has lived in extreme poverty as a child (and I mean extreme, rural, no transportation, food was touch and go, disabled single parent with 5 kids – 2 dropped out of high school, etc.) but is now in the 1%, this sort of “advice” to the poor is just ignorant and cruel. Systemic problems prevent upward mobility in a way they didn’t 20-30 years ago (poor schools lack resources, cost of higher education, stagnant wages, rising housing costs, health care costs). It’s been exacerbated in the last 10-15 years. Thank you for speaking out to educate those who cannot imagine a reality at the bottom of the economic spectrum but think it’s just a matter of “willpower” to magically change their situation. I also recommend the book Winners Take All by Anand Giridharadas.
Thank you so much for reading and for the book recommendations! “Scarcity” has been on my to-read list forever. I think it’s time I read it.
So, I’m a new reader of the blog and stumbled across this older article and I think it’s hilarious (and quite disheartening) that the dude who popularized the Latte Factor now has a new book by that title and has gotten a write up on several sites I frequent. It makes me so goddamn angry to see it being promoted and to just read his condescending statements as if every day lattes or meals out or whatever are a thing for people struggling with finances. I’m lucky that my husband and I make decent money put together together, but that still doesn’t mean we have the funds for such frivolity while we’re trying to dig out of the hole that 5 years of law school, moving to a different state with few job prospects, and the doubling of our rent within a year put us in. There were definitely some different and possibly better choices we could have made, but we did the best we could with what information we had. Fuck these guys and their privileged pomposity. Reading their bullshit is how we got into this situation in the first place.
This is exactly the comment I needed to read today. Thank you so much for chiming in!
I will cut them some slack: for some people, cutting back on the Latte Factor IS the solution to their problems. But those people have adequate incomes and aren’t drowning in debt. For everyone else, it’s condescending to suggest that the Latte Factor will fix cost of living on minimum wage.
I’m so glad you commented today. I needed a boost of positive reinforcement after some harsh criticism. 🙂
Oh, good! I always feel a bit nervous commenting on older posts, but I’m glad I was able to provide a boost. I do agree that the Latte Factor can be a thing for some people and genuinely do hope it helps someone out there. Maybe it’s just been so long since I was in that group that I’ve forgotten what it feels like! I’ll need to work on maintaining perspective. 🙂 It’s hard when I’ve read so many articles recently that have gotten under my skin, like some of the Refinery29 Money Diaries. Where’s the representation for people who are really struggling?! But that could also just be my fault for not seeking out other sources actually in line with what I like to read and what makes me feel represented (like I’m finally doing here!). Thank you!!!
I want to believe most people are aware by now, at least on a DEEPER level, that being poor has nothing to do with too many lattes in a week. They just refuse to admit it. So “the Latte Factor” becomes a form of gaslighting against the poor.
EXCELLENT point. And those who use it as a weapon of gaslighting get pissed off when you point that out.
The systemic inequality of opportunity really pisses me off! If all basic needs were met, including housing and food security, children and adults alike could spend their efforts on actually helpful pursuits and society as a whole would benefit. The policies seem to be in place to ensure that a tiny fraction of the population profits fabulously from the current situation at the expense of humanity as a whole.
I think of reaching financial independence as gaining the ability to contribute in the best way I know how (and ways I learn how later!) without worrying about being able to survive. I’ve had a long struggle to get to the point of having a large emergency fund and the mental affect that has is huge.
This post has me thinking of actual ways to contribute to solving these problems. Here’s a list of what I could come up with, let me know if you have any recommendations to add to the list:
1. Donating to responsible charities (that you showed how to investigate to be sure they’re responsible)
2. Directly helping people in the community with financial assistance
3. Setting up after school programs that provide educational support, a warm place to be, and free food. Maybe making these 24 hrs would be helpful in the case of people living in their cars. I think there are laws that make a 24hr service like this much more difficult to set up than an after school program.
4. Setting up specific programs to educate children and adults on financial literacy
5. Be a foster parent
6. Whenever you have the urge to chastise someone for purchasing a latte or $7 chocolate bar, treat them to it instead
7. Figure out how to contribute in the best way possible to change the laws and systems that create inequality and support new laws that work towards eradicating it
POOR PEOPLE DON’T BUY A DAILY LATTE IN THE FIRST FREAKING PLACE!!! We hate being told we can save $ by “skipping that daily latte” and “brown bagging lunch instead of eating out.”
THIS ONE OF THOSE THINGS RICH PEOPLE AND FINANCIAL ADVISORS JUST DO. NOT. GET!!!! People who are desperately counting pennies don’t do those things – if they EVER have – in the first place! The average working mom wishes she could grab a Starbuck’s once or twice per MONTH.
Too many people think you can’t “really” be poor unless you are filthy and dressed in rags with your hair in snarls. They see our nice clothing (especially if it has a designer label) and don’t realize we bought them at garage sales, eBay, consignment stores or a swap meet. They see our beautifully-manicured nails (you can get nail polish at Dollar Tree) and styled hair (we use a curling iron at home) and iPhones (mine was free with a two-year contract and saved points) and conclude we must just be thoughtless consumers who are short on money because we toss it here and there on trinkets and pricey food treats.
Many homeless people actually have a job, but let Those People see them using a cell phone and POUNCE! (a mobile is a convenience for you; on the street it is a lifeline)
It is not just insulting, it’s frustrating and CLUELESS on your part!
We completely agree.