This as-told-to essay is based on a conversation with Rob Mallernee, the CEO of Eton Solutions, who teaches a class in private wealth management at the University of North Carolina Kenan-Flager Business School. Business Insider has verified his employment. This piece has been edited for length and clarity.<\/p>\n
I teach a wealth management class<\/a> at the University of North Carolina, where I show students how being intentional about their spending can shape their finances long term.<\/p>\n The vast majority of people, especially those without financial training, underestimate how much they could save over a lifetime by avoiding these common spending traps.<\/p>\n Most people don’t think about spending in such a systematic way \u2014 but the ultrawealthy<\/a> do.<\/p>\n Buying a coffee every day is a bad financial habit<\/strong><\/p>\n Let’s say you go to Starbucks<\/a> every morning and buy a $4 cup of coffee. Calculate what that costs if you do it every day from age 22 to 65, and how much less you’d have compared to buying a Keurig<\/a> and making coffee at home each morning instead.<\/p>\n The difference in numbers will be an astonishing amount of money \u2014 thousands that you could otherwise invest and grow.<\/p>\n It’s easy to make poor decisions when buying a car<\/strong><\/p>\n A while back, I was looking at SUVs. At a Honda showroom, I took a picture of the sticker for one of their models, and later did the same at a Mercedes showroom<\/a>. When I compared them, the features were almost identical, but the Honda cost about $50,000 while the Mercedes was $125,000.<\/p>\n That’s not to say a Honda is a Mercedes, but both will likely get you where you need to go, while one is $75,000 cheaper.<\/p>\n Then, there’s also the matter of how often you replace the car. It’s worth running the numbers to compare the lifetime costs of buying a new car every eight years versus every three.<\/p>\n If you do the math, you’ll see that over the course of a 45-year working life, you’ll end up with enormously more money at the end if you hold onto your cars for longer.<\/p>\n