Someone who spends $5 on a latte everyday, that would make you no happier than coffee from the break room, is likely not in a stable equilibrium of spending.
If better tasting drinks really did make you happy--something I don't believe--the rational thing would to be to brew your own coffee or tea. This has the added bonus of being a learning experience. The $5 latte drinker, at most income levels, is someone who hasn't evaluated his incentives rationally.
Thinking rationally about money is a muscle. Negotiating a $5000 salary increase then buying $5 lattes is the equivalent of going to the gym, then driving a ten minute walk home.
Or you assume that the coffee is the only part of the experience that counts. I gladly pay $5 for my morning coffee, because I really enjoy the shop. I could drink coffee at home, no problem, but I like going to the shop and reading the news and waking up there. I know I'll see people I enjoy. I actually have to get dressed/ready for my day to get out of the house so I'm not as likely to just be lazy. The window I sit in catches the morning light In a way that I find pleasing. In the warm months I can sit on the patio and enjoy the weather.
Or I could spend $1 or less on my morning coffe that doesn't taste as good, and not wake up in the same, refreshing way, and be overall less productive.
Oh, and I still manage to save 20-30% of my overall income (depending on the month). Lattes don't matter. Overall spending habits and and fiscal approach do.
Another important aspect to consider is that penny pinching will make you feel miserable and will often add so much additional hassle as to not be worth it.
For instance, saving 50 euro on airline travel ... not worth it if you can afford the extra 50 euro.
If better tasting drinks really did make you happy--something I don't believe--the rational thing would to be to brew your own coffee or tea. This has the added bonus of being a learning experience. The $5 latte drinker, at most income levels, is someone who hasn't evaluated his incentives rationally.
Thinking rationally about money is a muscle. Negotiating a $5000 salary increase then buying $5 lattes is the equivalent of going to the gym, then driving a ten minute walk home.