Your Latte Isn’t Why You’re in Debt, and the People Who Say It Is Are Lying to You
Behold the Starbucks latte. The delicious mix of espresso, steamed milk, foam, and add-ons to taste is ubiquitous in our culture.
Warren and Tyagi demonstrated that buying common luxury items wasn’t the issue for most Americans. The problem was the fixed costs, the things that are difficult to cut back on. Housing, health care, and education cost the average family 75 percent of their discretionary income in the 2000s. The comparable figure in 1973: 50 percent. Indeed, studies demonstrate that the quickest way to land in bankruptcy court was not by buying the latest Apple computer but through medical expenses, job loss, foreclosure, and divorce.
Giving up a latte or another such small extravagance in this environment wasn’t going to be enough. Yet the personal finance shills continued to tell people their problems were mostly of their own making.