more on spending habits-1 of 4 obstacles to creating real wealth

[Rich Weese]

I was going to add to a previous, earlier post, but decided to just post new. Story-
A few years ago, one of my 6 kids called and said her car was dying and she needed a new car but couldn't afford payment. I asked her what the payment would be(used car) and she said around $300 per month. I know how much her and husband earn, so I found this hard to believe.
I told her I'd help her out on one condition. Prior to the help, I wanted her to carry a small ledger book in her purse, and write down every single expense she had for 30 days. She agreed. Utilities, house, clothes, fast foods, movies- popcorn etc.etc etc.
She called after a couple weeks and said"I don't want to do this any more". She had realized that she had spent almost $200 on just crap! Movies, 7-11, fast foods, coffee and doughnuts, her husbands' paper, and on and on.
They made some changes, got another car and learned something about budgets. If you don't think you have any money for investing, I'd suggest you try the same ledger for a month. My guess is, you'll be shocked at the waste. Rich

[Steve Babiak]

On this same topic, there are a couple of authors who wrote about this in their books.

One of Rich Weese's recommendations (and now mine too): "The Truth About Money" by Ric Edelman has a section dedicated to this topic.

Another book has a chapter called "The Latte Factor": "The Automatic Millionaire" by David Bach. Here is a snippet from that book chapter (sorry, I'm not shouting, the book uses bold uppercase for this statement):
"... MY LATTES ARE COSTING ME NEARLY TWO MILLION DOLLARS!"
[said by class attendee upon discovering that $5 per day could add up to $1,742,467 - if placed into 401K with 50% employer match, 10% annual rate of return]

And this is also from the Bach book:

USE THE POWER OF THE LATTE FACTOR
$5 (average cost of a latte and a muffin) x 7 days = $35/week = approx. $150/month. If you invested $150 a month and earned 10% annual return, you'd wind up with
1 year = $1,885
2 years = $3,967
5 years = $11,616
10 years = $30,727
15 years = $62,171
30 years = $339,073
40 years = $948,611

That same chapter also has a great table of "The Time Value of Money", as well as a form that is to be used to log daily spending (like what Rich recommended in his post).