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Innovation Insights
by Stephen Shapiro

Continue Buying Those Lattes

The way you ask a question will have a profound impact on how you answer it.

This is a fundamentally critical concept in the world of innovation. If you are working on a problem/opportunity, changing just one word can influence the types of solutions you get. I’ve discussed this concept extensively on my blog.

But did you know that the way you frame your New Year’s Resolution (if you set one) will have a huge impact on the actions you take towards the achievement of that goal?

According to a survey I conducted a few years ago, over a third of people set financially related goals each year.

For many this means, “save more money.”

Paradoxically, the goal – “save more money” – can have unintended consequences that might leave your bank account with less money in the long run.

When we want to save, we look at where we currently spend money, and how we can reduce those expenditures. For many, their daily stop at Starbucks is one of their guilty pleasures.

As a result, there are many financial advisors who will tell you to “stop buying lattes.” If a latte costs $4 a day, you could save about $1,500 a year by cutting them out. That’s a lotta lattes!

But cutting out your lattes requires a lot of willpower. And as it turns out, willpower is not an unlimited resource.

Let’s examine some scientific research on this.

Imagine individuals tasked with solving a complex problem. In the room where they are sitting wafts the aroma of freshly baked chocolate chip cookies. On the table in front of them are two dishes: one with the cookies and another with radishes.

Although the combination of the olfactory and visual stimulation made the cookies irresistible, some individuals somehow managed to use their willpower to stay clear of the gooey chocolate.

Kudos to them. They win. Right?

Well, as it turns out, the people who resisted the cookies performed significantly worse on problem solving and other tasks. The willpower it took to resist the delicacies robbed them of their ability to perform a variety of activities. Researchers call this “ego depletion.”

What this implies is that the energy it takes to save $4 may in fact be robbing you of your skills required to make even more money.

What if, instead of focusing on saving $4 a day, you put your energy into finding ways of making an extra $10, $100, or even $1,000 a day? What if you used your latte as fuel for making more money?

There is of course nothing wrong with saving money. I am certain that all of us could do a better job and would benefit from it. But it is important to recognize there is a hidden cost.

As an entrepreneur, I would rather spend money on the guilty pleasures that energize me, help me stay focused, and in the long run enable me to make even more money.

P.S. Of course there are health implications of too many lattes. At 200 calories each, this may add an extra 30 pounds to your waistline each year. Other than bacon, my guilty pleasures are usually healthier (or at least lower calorie) alternatives.