[cafogleman]

This is closely related to the idea of being "penny wise and pound foolish." For instance, you are actively depriving yourself a $5 coffee per day (or substitute your vice of choice) but you're leasing a new car every 2 years. In this case, you are not only cutting the wrong indulgences in the name of savings, you are giving yourself a false sense of accomplishment when there are much more beneficial steps that could be taken.

Finances are a hard thing to recommend to anyone else, as there are so many variables in personal finance. But very generally, it's worth considering where the largest single expenditures (or categories) are, and looking at how to lower those numbers first.

[rflrob]

I assume that the Suze Ormans of the world would tell you to be not just pennywise but poundwise as well. The $5 latte is emblematic: once you start thinking about that $100 monthly expense, you sit and look at your $90 cable bill or your $200 car lease and think whether there are ways to cut back on that as well. The value of cutting out lattes is that it's easy to ask, on a regular basis, "is this making me $5 worth of happy?", whereas a big car payment you can more easily justify as "I need it to get where I'm going", even though a cheaper vehicle could do just as well.

I agree it's more efficient to start with the big expenses and work your way down, but it's sometimes easier, especially if you're just starting to turn your finances around, to start with the little stuff and build your way up.

[compiler-guy]

Getting your car and house right makes up for many, many latte-level mistakes. And this is what Suze Orman misses.

It's like Ahmdal's law for finance: Don't sweat the small stuff until you have optimized the big stuff, and even then, the work to fix the small stuff might not be worth it.