Where Am I Wasting Money & How Does that Impact Me?- Part 1-Eating Out
Something I hear frequently from clients is that they are making money, perhaps good money, but don’t have anything to show for it. Why is that? Often when I work with them, we find that a lot of money is being wasted. By wasted money, I mean money that’s being spent on items that don’t have value to them. As a result, things that do have value to them, their priorities (retirement, college, travel/fun, etc.), are not getting funded. Therefore, they don’t have anything important to show for their hard-earned money.
The first step to discovering where money is being wasted, is to complete a monthly budget. If you want to know more about budgeting, click here. Once you have a budget, there are several categories that may contain wasted money. I’m going to discuss one of these categories today, “Eating Out”. I’ll discuss other categories in future posts.
I must first state that there’s absolutely nothing wrong with eating out. If we plan our monthly budget & include an amount for eating out, it’s all good. Where people get into trouble is either they don’t have a plan for eating out, or they exceed their plan. Therefore, they (pun intended) eat into their priorities. So, things like retirement, college, buying a house, travel, paying down debt, etc. don’t get funded as they should be funded.
For many people, going out and socializing over a meal is an important activity. Going out with friends, having a date night, etc. are great social activities. But the reality is that a lot of eating out isn’t that. Some, or most of it is likely “convenience” eating. I don’t feel like cooking, I didn’t shop at the grocery store, or I don’t know how to cook, so I go grab something. How much does that cost people? The average American spends $300/month on eating out. I’ve been doing this long enough to know that many people spend quite a bit more than that. $500-800/month is pretty common for a family, and over $1000/month isn’t uncommon. So, let’s say that someone spends $600/month on eating out. If they were instead to spend $300/month on eating out, then they’d have something like $250/month (I’m assuming grocery costs would go up by $50) to spend on priorities. $250/month is $3000/year. What if you had that $3000 to put into retirement, save for college or for travel? Let’s use the example of retirement. Saving $3000/year for 20 years, making 8% return, would yield over $137,000!! I hope those Olive Garden rolls were worth it! 🙂
So, to keep your eating out budget in line, have a plan. You know that you’re not going to feel like cooking every night, so have some easy quick meals ready to go. When you cook, make extra. So, then you can have a leftover night, or two, where all you need to do is reheat the meal. Maybe have some frozen dinners that need to be popped into the microwave. Maybe have some easy “go to” items like quesadillas or smoothies or whatever. So, when you don’t feel like cooking, you don’t have to drop $10-12/person at Chick Fil-A or Moes. Or $25-30/person at Olive Garden, Chiles or something similar (or better!). And those numbers are pretty conservative. With the current inflation & its impact on eating out, restaurants are getting more and more expensive!
As I continue to write this series about where we waste money, some of you will be called to action & make changes to your spending habits. Others will look at these posts as moderately interesting, or even not that interesting. So, I have a question for you. What are your priorities and are you actually funding them? Are you going to retire comfortably? Do you know what that looks like? Are you able to send your kids to college? Do you know how much that costs? Are you able to travel and enjoy life without adding to a growing credit card balance? Am I paying down my credit card or student loan debt? If you answered “no” to some, or all of the above, something needs to change. Things don’t get better with time. They typically get worse if they’re not addressed.
If you take my posts as a call to action, then great! If you’re not sure where to start, not sure how to put together a plan, how to budget and how to make changes. Then perhaps I can help. Click here to setup a Complementary Consultation. We’ll get to know each other & discuss your financial situation. Then we can see if coaching is a fit.
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