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Comment by Swizec | Hacker News Reader

Ramit Sethi's advice on this really rang true with me "Stop saving on lattes, that doesn't matter, negotiate a $5k+ per year pay increase instead"

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Someone who spends $5 on a latte everyday, that would make you no happier than coffee from the break room, is likely not in a stable equilibrium of spending.

If better tasting drinks really did make you happy--something I don't believe--the rational thing would to be to brew your own coffee or tea. This has the added bonus of being a learning experience. The $5 latte drinker, at most income levels, is someone who hasn't evaluated his incentives rationally.

Thinking rationally about money is a muscle. Negotiating a $5000 salary increase then buying $5 lattes is the equivalent of going to the gym, then driving a ten minute walk home.

Some people feel stylish with their $5 coffee. It's not all about the taste.

There is a word that describes perfectly these kind of people - snobs.

I could understand someone that tells me his 5$ coffee tastes "better". But if you drink your 5$ coffee just because you are feeling stylish ...

To quote Tim Ferriss, "It's OK to want [a motorbike] because it makes you feel like a cool dude.".

If something makes a person happier, it makes them happier.

Or you assume that the coffee is the only part of the experience that counts. I gladly pay $5 for my morning coffee, because I really enjoy the shop. I could drink coffee at home, no problem, but I like going to the shop and reading the news and waking up there. I know I'll see people I enjoy. I actually have to get dressed/ready for my day to get out of the house so I'm not as likely to just be lazy. The window I sit in catches the morning light In a way that I find pleasing. In the warm months I can sit on the patio and enjoy the weather.

Or I could spend $1 or less on my morning coffe that doesn't taste as good, and not wake up in the same, refreshing way, and be overall less productive.

Oh, and I still manage to save 20-30% of my overall income (depending on the month). Lattes don't matter. Overall spending habits and and fiscal approach do.

Another important aspect to consider is that penny pinching will make you feel miserable and will often add so much additional hassle as to not be worth it.

For instance, saving 50 euro on airline travel ... not worth it if you can afford the extra 50 euro.

I read stuff from both of them and they both have good stuff. MMM says that your marginal utility from a salary somewhere above $100,000 is ridiculous and Ramit disagrees. MMM actually did a case study post on how saving was more effective than salary increases: http://www.mrmoneymustache.com/2012/11/14/doubling-your-sala...

Why wouldn't you do both?

This would represent a sea change in your perception though. If you can get to the point where you're actually "spending on your retirement" then you're good to go, sort of "paying down your retirement mortgage."

But you have to be perceptive enough to see you are "buying" a retirement, not "denying" a Latte.

Even better, buy someone else a latte, sit down and talk with them and learn something new. Then with that, go earn more.

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