Daily coffee, snacks and taxis are quietly reducing Ukrainians' budgets. The “latte effect” explains why small expenses pose a serious threat to savings.
Small daily expenses add up to significant amounts over time. Ukrainians spend thousands of hryvnias a month on coffee, taxis, and snacks without even noticing it.
How to recognize the “devourers” of your personal budget and start saving – read the article.
What is the “latte effect” and why is it important
The “Latte Effect” is a financial trick popularized by American financier and entrepreneur David Bach. Its essence is that small amounts spent on daily unnecessary things become significant losses in the long run. The financier drew attention to the fact that a cup of coffee daily gradually “eats away” the savings of the average American. Giving up cafes in favor of home coffee can save money for further important investments.
This concept can work in Ukrainian realities as well. Daily unnoticeable expenses on coffee, snacks in cafes, taxis and impulsive purchases can take about 50 thousand hryvnias a year.
The most common “devourers” of the Ukrainian budget
A cup of espresso in Ukraine costs an average of 36 UAH as of February 2025, according to Opendatabot. Depending on the establishment and the type of drink, the price reaches 120 UAH.
If the average Ukrainian buys coffee five times a week, it will cost him from 700 to 2400 UAH per month. Annual expenses can reach 12,000-28,800 UAH – an amount sufficient for purchasing a home coffee machine that will serve for several years.
Light snacks or fast food will cost from 70 to 200 UAH per meal. For five working days a week, this is 1400-4000 UAH per month. Over the year, the amount will be more than 16 thousand UAH. With these savings, you can buy kitchen appliances that will come in handy for preparing snacks at home.
Taxi instead of public transport “eats” the lion's share of the budget. Since mid-2024, prices for a trip have increased by 10-25% depending on the city. In large cities, a standard economy class trip costs 150-200 UAH. By choosing a taxi three times a week instead of public transport (usually 8-25 UAH per ticket), you additionally spend 1800-2400 UAH per month.
Unplanned purchases – hidden costs
84% of all shoppers make impulse purchases, without a prior plan and being subject to an immediate desire to buy a product. A shopper makes an average of three unplanned purchases out of every 10 visits to a store, according to statistics from a study by the American consulting company Invesp.
This also applies to Ukrainian realities. Especially during wartime, the number of such purchases increases due to chronic stress. Psychoanalyst Elena Borovik explains that fear of an uncertain present and future affects the desire to consume, because purchases give the illusion of control. Promotions “1+1”, “2+1” or a 50% discount often encourage buying something that was not in the plans. For an average Ukrainian family, this can amount to about 2,000 UAH or even more per month.
Practical ways to rationalize costs without compromising quality of life
An effective method is to track costs.
“At first, it is useful to write down all expenses by hand for one or two months to better understand where the money goes. Then you should switch to mobile applications that automatically categorize expenses. It is important to regularly, once a week or two, spend 15-30 minutes analyzing your finances. It is not enough to simply install an application – you need to systematically review and analyze your expenses,” recommends financial literacy and investment expert Yulia Banit.
After analyzing your expenses, you can enter a shopping plan and budget for the week that will be rational and optimal for your family.
There is also a method of postponing decisions about an unplanned purchase, especially if it costs more than 500 UAH.
“An avoidance strategy and search for alternative sources of dopamine are effective in combating impulsive purchases. Complicating the purchasing process also helps – for example, postponing the purchase for a few days or promising yourself to come back for the item later. This often reduces the desire to buy, since it no longer provides quick satisfaction,” notes Elena Borovik.
As for finding alternatives to daily expenses, it is important to understand that this is not about strict savings, but about rationalizing the budget. Experts emphasize that instead of completely giving up coffee in cafes, you can optimize its consumption – prepare the drink at home and buy a thermos mug.
Reducing unnecessary expenses is not a panacea, because you need to simultaneously look for opportunities to increase your income. This approach will allow you to maintain the pleasure of life, while improving your financial situation.
Author: Anna Shimko