There are two ways to save money. A person can earn more, or they can spend less. Since there are some things that a person must spend money on, food for instance, the option in that category is to simply cut back.
Have you ever taken the time to analyze how much is spent on food? If you are like most people (most people know they should make a budget, but they don’t) you have a vague idea, but no solid numbers to work with. Think about how often you eat out, now consider the fact that eating at home (or packing a lunch to work) costs half or one-third that price (even less if you eat cheap meals). This means you are spending two to three times as much on food than necessary.
For instance: suppose lunch costs $10 with a drink. This means the person who eats out every day of the week for lunch spends $50 each week (not including tip). Assuming the average worker has 50 weeks during the year, that means over $2,500 is spent on lunch alone. That is half the amount of a fully funded IRA for the year (not exactly, since there still will be SOME food costs). By not eating out every day of the week, a person can pocket a significant amount of money. For those who grab breakfast on their way to work, that number is even higher.
Dinner is a whole other game. Since entrées during the evening meal run a bit higher, and many people dine as couples, the cost to eat out is even more. For a single meal, no drink, no alcohol, no tip, and no desert, one can reasonably expect to pay $15. Eating dinner out five nights per week will run a person as little as $3,750 per year. Add a few beers and the tip and that number just doubled.
While most people do not eat out every single meal, every single day of the week, the concept still applies. Cutting out just a few meals on the town, and replacing them with a meal at home (which is usually healthier) a person can not only see an increase in their financial health, but see a change in their physical health. Taking the money saved by packing a lunch or dining in now, and investing it into a retirement fund can assure many years of eating out after the working years are over. Of course some people love to eat out. There is nothing wrong with spending money on hobbies and things you love, just make sure to cut the expenses somewhere else. For most people, cutting down food costs is the easiest and most straightforward way to go.
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