David,

Here is how I put the latte factor into play in my life. First I needed to get a car as well as establish some credit of my own.  I killed two birds with the same stone.  Using the “latte factor”, every time I considered purchasing something, I asked myself, “Which do I want more, this ‘latte’ or the car?”  Naturally the car was more important, so I put the purchase price of whatever I had thought I wanted, plus the sales tax amount, into a savings account.  I was amazed to find that I saved $2,000 in two months!

Six months after that, I was given yet another 60 day notice to leave a rented home.  Tired of the endless pursuit to find a landlord that would accept a large family, I opted to talk to an older real estate agent in Napa, California about the possibility of purchasing a home.  I was amazed at the options that he was aware of.  He set me up to meet with a loan broker and we were able to work closely together.  Finally we found one that was affordable, and, as he said, “not too rough”.  Within the sixty days that I had to leave my rental, I had become a home owner!  My mortgage broker added the remaining portion of my car loan into my mortgage and advised me to send my car payment in with my mortgage payment.  For the next three years, I made a payment that included my mortgage amount and car payment amount as well as what I had accumulated in “latte factor” money savings account.

As my children grew, so did the need for a bigger car.  I talked again with the broker and she recommended a refinance to pay off some of my medical bills and then purchase the bigger car.  In the refinance, I was able to pay off all accrued debt and the purchase price of a small van.  Further more, I received the benefits of an even lower interest rate.  I continue to send in the car payment with my mortgage payment.  My current mortgage amount is less than the former monthly payment, even with the car payment amount figured in.  Now, I have been in my house for six years.  I originally purchased the home for $163,000, my balance on my loan is around $130,000 and the house is valued at over $400,000.  My goal now is to pay off my loan by the time my youngest daughter graduates from high school.  I am also thinking of purchasing a second home and renting it out.