So how much do you spend eating out?
Maybe you spend $50, $100, or even $200. So what is the big deal? When I coach folks, I typically see the eating out in the $175 to $300 range. What I typically hear is “I didn’t realize how much we were spending until you made us put it on paper.”
For the record, I’m not against eating out; I’m actually okay with people eating out as long as they understand the overall potential impact to their budget and their personal goals.
How does eating out and other spending impact your long term goals?
Take a look at the chart. The chart is based on 9% return. I know, you are saying you can’t get 9%. You are correct, you cannot get that today…but I look long term. I’ve seen interest rates at 18%. Thinking short-term will get you into trouble but that is a topic for another day. So for the next few moments, think long term with me and let’s take a look at the chart.
If I’m spending $200 a month eating out, that means over the next twenty years I may have had the potential to accumulate $133,680. Have you ever said you can’t save for college? Maybe you are eating your college fund. This is why it is so important to establish your life goals and then build your budget around those goals.
So, how do you reduce your eating out expenses?
Here are a couple of ideas:
1. Drink water instead of a beverage. A family of four ($1.75 each x 4 people x 4 meals) = $28.00 monthly savings.
2. Better planning. Instead of hitting the restaurant after the game, have a crock pot or casserole cooking in the oven so it is ready to eat when your get home. A family of four ($30 per family x 4 meals) = $120 monthly savings.
3. Go out for lunch instead of dinner. Many times a $10.00 dinner meal is around $6.00 at lunch time. Family of four ($4.00 each x 4 people x 1 meal) = $16 monthly savings.
So you reduce your eating out expense by $164. Take $64 of this and move it to your grocery bill (since you are eating at home more) for a true savings of about $100 a month. Go back to the chart, what is the potential of saving $100 a month for 15 years? $37,870. How painful is the above? The bottom line is 1) you drink water, 2) you eat out one less time per week (eating at home), and 3) you eat lunch out instead of dinner once per month.
What if you double it?
If you double what we talked about above, you are looking at a potential savings of $75,740 over 15 years. That looks a lot like a college fund to me. Let me put it another way. For most families, the $75,740 is more money than they will bring home after taxes for an entire year. That is a lot of money, and we only addressed one category within the budget!
Modify and Reduce
We didn’t eliminate eating out. We modified it and we reduced it. The goal of a good spending plan is not to stop spending; it is to maximize your income by spending the right amount, on the right things, so you get to do what is important to you. You must set your life priorities and then build your budget around those priorities.
You have a choice, and the choice is yours.
My Financial Life Coach, LLC
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Balance Up is different than most other programs because it combines Goal Setting, Financial Management, Prioritization Management, Time Management, and Life Balance into a single program. In the mid 90’s Bryan developed and delivered corporate training in the areas of Goal Setting, Action Planning, and Time Management, so he understands adult learners. Bryan has combined that experience with his experience in financial coaching to create Balance Up.
- Groundhog Day (myfinanciallifecoach.wordpress.com)