<prompt> Human: For those unaware of the latte effect Is the belief that cutting small luxuries from your life will help you save lots of money. In the last year my wife has been laid off and then one of her part time jobs unfortunately moved out of state. Because of this and her substantial credit card debt that she had before we were married that she is still paying off weve had to adjust our lives and move in with her mother to save on our mortgage and bills. When we sat down to do our finances a lot of attention was given to my personal luxury of about 40 a month in beer. And amount Ive tried to insist is not making or breaking us. My wife herself has stopped buying Dunkin Donuts coffee because she feels like its too extravagant. If I didnt buy beer for year we wouldnt even save enough money for one month of daycare. I think all we are doing by cutting these things out is making ourselves more miserable given the situation. Am I wrong? Is it better to save money then to get those little things that sooth our souls?  <response>: 480year isnt a ton. The latte effect is ususally geared towards people who buy lunch every day or get a coffee every day. A 10 lunch every work day is 200month or 2400year, significant. Similarly with coffee. A 5 coffee every day is 1200, significant. A lot of it scales with your income as well. To some 2400 is 10 of their income and to others its 0.1, much less significant. 