Save for retirement. Save for an emergency fund. Save for your kids’ college educations. Pay your bills.   

Exhausting, isn’t it?

Yes. That overwhelming list makes it so easy to say, “There are too many buckets and not enough money to fill them all!”

What if you could find your extra money and stuff all it into your vacation fund, or your rainy day fund, or invest it, for heaven’s sake?

You may be thinking, “But I don’t have any extra!”

Oh, but you do.

David Bach, author of the book The Automatic Millionaire, coined and trademarked the term “Latte Factor.” Simply put, it’s the idea that your small purchases daily can add up to a lot of money over time. In fact, he even has a calculator on his website that totals up extra expenses and how much they cost you.

So, what’s your Latte Factor? Yes, your Latte Factor can quite literally apply to a $3 latte—or it could be something else that you waste money on, sometimes daily. Here are some ideas:

  1. Lottery tickets: Please, please, please don’t buy lottery tickets. Your odds of winning the jackpot in a typical 6/49 game are 1 in 13,983,816. If you spent a $1 a day on a lottery tickets, you’d have had $365 a year that you could have invested instead.
  2. Cigarettes and other tobacco: If you live in the state of New York, cigarettes cost $12.85 per pack on average. Most other states’ cigarette prices are between six and eight dollars. Do you even want me to add up the numbers on that one—or, for that matter, total up what tobacco does to your health? I will anyway. If you’re a pack a day smoker and live in New York State, you could easily waste over $4,600 a year on your habit. That would have been a nice chunk of retirement savings for a year. Ay, caramba!
  3. Going out for lunch: I know McDonald’s seems cheap, but if you think about what you spend on a pound of ground beef—let’s say, $3.50—you’d get four hamburgers out of that pound at $0.87 each. Heat ‘em up in the microwave at work the next day, add an apple and you’re good to go. Trust me, brown-bagging it is so much cheaper. Imagine spending $6 every day on lunch—or investing in a mutual fund instead. You’d have a cool $1,560 in that mutual fund at the end of the year—not counting your return on investment!
  4. Vending machine snacks: I have a colleague whose husband stocks up at the vending machine daily. What an overpriced waste! What if you saved your vending machine change for an entire year? Could you save $390? I bet you could!

You get the idea. The only way to really examine what you need to eliminate from your life is to track your expenses for a week and see what unnecessary purchases crop up.

Look for trends in your spending—and examine closely! For example, I see how people can get sucked into the $1 rack at Target, or maybe it’s getting hit with ATM fees, or excessive amounts of drinks after work with friends. And don’t forget about that morning coffee…It’s different for everyone.

With that, good luck, and happy saving!