Cheap luxuries, pricey necessities: Why Americans are really going broke

The so-called Latte Factor. It’s a pop culture metaphor for how much money consumers waste on small, frivolous goods. It was first coined by personal finance author David Bach. But then Oprah got a hold of it, and it became a guiding principle for people on cutting back small to save big. Unfortunately, it doesn’t work, says Helaine Olen, financial journalist and author of the book, "Pound Foolish."