During the last few weeks we’ve talked about money traps that keep us from becoming wealthy. Purchasing more home than they could afford put many people under during the housing crisis. While buying a new car every few years, keeps many Americans in perpetual debt. Yet, despite the prevalence of the housing and automobile wealth traps, there is an even more pervasive wealth trap ensnaring millions of Americans.
It all has to do with food. You see, we eat out way too often. In fact, according to the U.S. Bureau of Labor Statistics, we spend nearly 44% of our food dollars outside the home. And despite what mega-marketing campaigns tell us, this food isn’t particularly cheap.
Even with “dollar menus” and “value pricing” a typical family of four can easily spend between $20 and $25 on a single meal. For that price you could cook up a mean batch of chicken and biscuits and still have enough money left over for a pot full of beans and rice, enough food to last for several meals.
The problem is that we eat out so often that we don’t realize the financial toll it’s taking on us over the long haul.
I once worked at a company where it was customary for the office to go out for lunch. It was the “social norm” everyone followed. But how much was that costing me financially? Besides the lines, the rush, and unhealthy choices, I was easily spending $8.00 or more each afternoon when I could have packed a delicious and nutritious meal for $4.75 or less, saving myself nearly $3.25 a day.
Now saving $3.25 a day by brown-bagging it may not sound like a big deal, but consider this: Saving $3.25 per day by bringing your lunch to work will net you nearly $780 a year. Investing these savings in a retirement account returning 8% a year would earn the average 25-year-old $216,882.12 by retirement.
This is if just one person in the family works. A two career family could save over a half a million dollars for their retirement just by brown-bagging it instead of eating out for lunch every day. But let’s not just stop with lunch.
Consider eating out just one less night a week. A family of four easily spends $25 or more, even at McDonald’s. Cooking a family dinner one night a week, instead of eating out, would save a family of four $15 or more each week. That’s $60 a month.
Again, invested in a retirement account returning 8% a year, a young family would see this $60 per month savings balloon into a $200,198.88 retirement nest egg forty years later.
So how do you break the restaurant or fast food habit? Consider these tips:
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