Why the latte factor is all froth

By Lisa McCormack

Financial prosperity is all about the latte factor; just buy fewer lattes, invest the money you save and you’ll retire rich.

Ask the financial gurus who smugly share their wisdom on Oprah and write books with titles like “Everyone Can be a Millionaire” and they’ll tell you it comes down to living beneath your means and controlling your discretionary spending. In other words: If you can’t make ends meet, it’s your fault.

But that philosophy appears to be all froth, at least here in Vermont, where gasoline has hit the $4 mark, home heating oil is hovering around $5 a gallon and grocery prices are escalating so rapidly that even weekly specials and double-coupon deals don’t help much.

Given that the median household income in Vermont was $47,665 in 2006, most would still struggle to fill their gas tanks and heat their homes even if they swore off lattes forever.
The reaction generated by an article I wrote last week about roiling home fuel prices brings my point home.

Heating fuel dealers I interviewed for the article were still crunching the numbers to determine if they should offer pre-buy plans, and if so, how much should they charge. One dealer said his customers “should prepare to be shocked” when they received their new contracts.
The subject came up Sunday at a barbecue I attended. Within our group were service workers, state employees, a social worker, business owners. retirees, and a recently laid-off single mother.

Although the weather was a steamy 90 degrees, all voiced a common concern: How would they be able to heat their homes this winter?

Most have already cut back their spending this year. They’ve eliminated family vacations. They’ve curtailed shopping trips to Burlington and road trips to visit out-of-state relatives. They’re eating less meat and forgoing takeout pizza and Chinese food in favor of an occasional potluck with friends.

Vermonters are resourceful people and my friends are finding extra money wherever they can. One man whose construction business has sputtered as real estate prices have cooled started a lawn-mowing business. A woman with four kids ages six and under has started a home daycare business to boast her family income.

Those who used to spend their weekends at yard sales are scouring their basements and barns for anything they can do without and are holding their own yard sales to generate some quick cash.

My friends who garden are planting extra rows to freeze and can and a few who have never gardened have planted backyard plots.

These days, financial survival isn’t about cutting back on lattes, or fancy vacations or other luxuries. It’s about stretching already thin paychecks to cover the escalating costs of essentials: fuel, food, heat.

Most at the barbecue were hopeful that things would eventually turn around. My friend, Anne, was laid off from her manufacturing job several months ago. She has sent out a few dozen resumes and is optimistic that she will find work in the service sector soon as the local resorts gear up for the summer tourism season.

“In the meantime, I try to look on the bright side, she said. “At least I don’t have to worry about not having enough gas to get to work.”