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Happy Money Series | How to Spend Well and Enjoy Your Money More  There's a personal finance cliché that has been running for decades: stop buying lattes, invest the money instead, and you'll retire with an extra $170,000. David Bach, a renowned financial author who coined "The Latte Factor," was not wrong in pointing out the massive effect of compound interest over a long period. Skipping the morning coffee run can indeed save us thousands over the long run, but the argument fails to address an even larger problem. Buying a latte every single day costs more than a few dollars — it costs us the enjoyment of the treat itself! When that $6 coffee becomes an everyday habit, we slowly kill the dopamine boost that made it worth buying in the first place. Your Brain Is Tuning You Out Our brains tend to return to a stable emotional baseline regardless of what's happening in your life. This is known as hedonic adaptation.¹ Research suggests that within a year of winning the lottery (yes, literally winning the jackpot) people's reported happiness typically reverts to where it started. Coffee runs can be categorized by this same mechanism. I’ll elaborate: My favorite coffee shop is San Francisco-originated Philz Coffee. As the father of a 3-month-old, in the mornings I crave a Mission Cold Brew from Philz more than sleep itself. But even in the sleep-deprived trenches, I’ve realized that if I let my favorite drink become a daily reflex, it loses its power to rescue my morning. Our brains are mighty efficient at adapting. Once something occurs on a daily basis, our minds stop registering it as a meaningful event. That cold brew, ordered every morning without thinking, stops being a treat the moment it becomes a default. Many Small Pleasures Trump A Few Big Ones One of the most striking insights from the research paper 'If money doesn't make you happy, then you probably aren't spending it right' is the hidden power of adaptation: our brains possess a relentless ability to get used to whatever surrounds us, no matter how exciting the shift feels at the beginning.² A new iPhone feels miraculous for all of two weeks, then reveals itself to be just a phone. The brain adapts to its best features and stops noticing them. But that weekend coffee shop visit you've been looking forward to all week long? That's still a big deal for the brain. Small, somewhat frequent rituals resist adaptation better than big-ticket purchases. Because no two experiences are exactly the same, the brain stays curious rather than settling into a rut. The secret is finding the 'Goldilocks zone': frequent enough to sustain happiness, but rare enough to remain a treat. Take A Page from European Coffee Culture If you’ve ever been to Paris, Rome, or really any European city, you’ll notice that people treat coffee (espresso) a little differently. They order at the counter, pay with cash, actually converse with the employees, and then sit down to enjoy their drink. Sure, they may be desperately lacking in the iced coffee category (in the summer especially), but they easily make up for it in coffee culture. The entire experience is intentionally slow and deliberate. It has been like this for generations, which means European citizens purposefully don’t let the process of buying an espresso become mundane. Stateside, it’s the complete opposite: loyalty apps, mobile orders, DoorDash, and coffee on the run. Our desire for convenience and easy access facilitates emotionless consumption of our coffee. Our pivot to impersonal consumption is really just an act of sensory deprivation. You’ve removed the anticipation, the scent of the coffee beans, and the human interaction — all things that tell our brain something special is happening. We’ve removed any and all friction from basically everything we enjoy, yet wonder why that enjoyment starts to feel flat. Friction, it turns out, is the secret ingredient to joy. Our brain needs contrast in order to register an experience as an event instead of a default. The Latte Factor Got the Villain Wrong David Bach had the right idea in villainizing auto-pilot spending; however, he misdiagnosed the symptom. Purchasing coffee is a joyous experience for those who truly savor that specific, $6 sensory experience. Why would we villainize something that brings us joy? That’s like, the whole point of money. Still, buying coffee should be a decision, not a reflex. Daily purchase should certainly be addressed but not eliminated in its entirety. Depriving yourself of these small rituals creates frugality fatigue, a kind of pressure that builds until it releases as "revenge spending" on something much larger and less considered.³ The goal is intention, not elimination. Fun Coffee Friday Works Like a Charm Here's how I like the reframe the coffee argument: we want to protect the things we enjoy from becoming joyless habits. Try something like this: make coffee at home four days a week, and save your favorite drink for Friday (or Thursday if it’s been a long week!). It’s not a punishment for poor spending habits. Instead, you are just building up anticipation for the ultimate payoff of having that delicious treat. When “Fun Coffee Friday” comes around 52 times a year, take your time and order it at the counter. You are now intentionally present for the experience of buying a coffee. Neuroscience backs this up. Stanford neuroscientist Robert Sapolsky found that when monkeys received a food reward every time they completed a task, dopamine spiked in anticipation. But when the reward came only half the time (unpredictably), their brains released twice as much dopamine. The guaranteed daily treat produced less pleasure than the occasional one.⁴ The same applies to buying coffee. Same $6 treat, completely new perspective!  This is what I mean by intentionally using friction to prevent the brain from tuning out pleasure. You're designing your week around a small, reliable reward and protecting it from the adaptation that would otherwise kill it. This obviously isn’t unique to coffee, either. Maybe it’s your favorite take-out restaurant. Maybe it’s a glass of wine or a cup of ice cream. Whatever it is, the key is not to ruin through overexposure. When the Finance Nerds Are Right A caveat worth making: if your rent, debt, or car payment is crushing you financially, optimizing the frequency of your coffee purchases isn’t worth much thought. Shrinking a car payment by $400 a month is the equivalent of cutting 80 lattes. It's not even the same playing field. Don't major in the minors. The "Make it a Treat" principle works best when your fundamentals are in reasonable shape and you're trying to figure out how to actually enjoy the money you spend. It's a quality-of-life tool, not a financial rescue plan. Conclusion Instead of heeding the advice of the unnecessarily frugal, try spending less often on things you love for the purpose of loving them more. This frame of mind protects small, pleasurable experiences from your brain's tendency to render them routinely mundane. It turns a habit back into a treat and it only costs a little patience. This week, try picking one thing you consume on autopilot and put a few days between yourself and it. No need to eliminate it; just make it wait. See how your brain reacts when the payoff finally arrives. Next in the Happy Money Series: The Secret to Maximizing The Joy We Derive From Travelling
More Reading: Why Americans Are Still Grieving Over High Prices Retirement Calculators Give You One Number. Reality Gives You a Range. The Scarcity Mindset Is Costing You the Best Years of Your Retirement References ¹ Frederick, S., & Loewenstein, G. (1999). Hedonic Adaptation. In D. Kahneman, E. Diener, & N. Schwarz (Eds.), Well-Being: The Foundations of Hedonic Psychology. Russell Sage Foundation. ² Dunn, E.W., Gilbert, D.T., & Wilson, T.D. (2011). If money doesn't make you happy, then you probably aren't spending it right. Journal of Consumer Psychology, 21, 115–125. ³ Sharma, E., & Alter, A.L. (2012). Financial deprivation selectively shifts moral standards and compromises moral decisions. Organizational Behavior and Human Decision Processes, 119(2), 201–212. ⁴ Sapolsky, R.M. (2017). Behave: The Biology of Humans at Our Best and Worst. Penguin Press.
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