The honest version of the latte factor
Let's be straight about this: nobody gets rich by skipping coffee alone, and anyone who tells you otherwise is selling a book. Joyless budgets fail, usually by February. If a $4.50 coffee is the best part of your morning, keep the coffee.
The useful move isn't cancelling everything. It's running the numbers on your three biggest recurring habits and deciding, with the total in front of you, which ones actually earn their keep. Most people find one habit they'd happily pay double for and one they forgot they were paying for at all. Keep the first, kill the second, and you've done more than any latte lecture ever managed.
Worked example
Take the defaults: $4.50 every day is $136.88 a month; over 20 years that's $32,850 spent, but invested at 7% it would be $71,301.84, more than double. The gap between those two numbers is what the habit really costs. Whether it's worth it is a separate question, and only you get to answer it.
Frequently asked questions
Is the latte factor real or a myth?
The maths is real, the moralising is optional. Small recurring costs genuinely add up to large sums over decades, and investing genuinely multiplies them. Whether your particular habit is worth it is entirely your call, and nobody else's.
Why does investing double the number?
Compounding. Invested money earns returns, and those returns earn returns of their own, so the longer the timeline the wider the gap between what you spent and what it could have become. The compound interest calculator shows the same effect in more detail.
Should I cancel everything?
No. Joyless budgets fail, usually within a month. Cut the things you pay for but barely notice, keep the things you genuinely love, and make the boring stuff in the middle argue for its place.