Tuesday, March 31, 2009

Money (and Fitness) Tips - There's No Such Thing As A Free Lunch....So Bring Yours!

Ramit Sethi has an interesting post about how getting rich is not about trying harder. I tend to agree. Although it is difficult for me admit, since I attribute many things I have accomplished in my life to hard work, I think I have to agree that personal finance hasn't really been hard work for me. First off I enjoy learning about the topic so that helps. I think that getting my finances in order has had more to do with educating myself and developing good habits. We are creatures of habit and finance is no exception. If you develop good habits they become "the way it is" and less of a struggle to make to the right decision.

One habit that has worked well for me over the years is one that is multifaceted in its benefits. Bring your lunch to work! It sounds so simple that I shouldn't even be writing about it, however I can't tell you how many people I know or see that go out to eat every single day for lunch. 

Let's assume that you are 'frugal' in your lunch purchases and you spend a mere $5 per day on lunch. Most people would agree that going out to lunch and getting a meal for $5 is a pretty good deal. I would argue that it is a good deal, relative to the times you are actually going out to eat. However, when compared to bringing your own lunch $5 is pretty steep. Bringing your own lunch is a fraction of that cost per day. 

Let's run some numbers. Five days a week at $5 a pop comes out to $25 a week, or $100 per month. That's roughly $1,300 a year! If you invested that $1,300 at age 22 and earned a measly 6% return, you would have roughly $13,371.43 when you retired at age 62. And that is just one year of not going out to lunch every day. Imagine if you invested that much every year. Imagine if you got a larger return that 6%. Imagine if you were honest and admitted that you spend more than $5 per day on lunch!

The numbers don't lie and bringing a lunch is such an easy habit to form. That is why, as stupid as the recommendation sounds, I think it really is powerful to see the monetary benefits of simple daily habits. The same people who go out to eat everyday are the same people who haven't started investing yet because they have to do X excuse first. They are the same people who are missing out on a company matching 401K plan. They are the same people driving our nation's savings rate further and further into the negative. To be honest, they are probably the same people who are complaining that they can't lose weight.

Do you see a little bit of yourself in the description above? Good. You should. Going out to eat is enjoyable. I personally love to eat. And typically when I go out I eat and order twice the amount I would had I just brought my lunch. I am well aware of the social benefits of going out to eat lunch with co-workers and clients. The key is to make bringing your lunch the norm and going out to eat the exception. Is someone having a going away luncheon? Great go splurge on that day. Are you friends going out for their daily pizza and sandwich run? Not so great. Bring your lunch along, and recommend that you eat outside or back at the office.

I treat my work week as my monetary/dietary regimen so that I can treat my weekends like a vacation. This post is not about self denial, it's about setting yourself up for success while still enjoying your life. I hate the frugal approach to getting rich. I can't relate to the bloggers and columnists that say to cut up all your credit cards and live on sardines. What's the point of being wealthy if you cannot enjoy your life on the journey there? I go out to eat all the time on the weekends with friends. I probably eat and spend too much on the weekends. However I know myself well enough to know that I have formed good habits during the week. Know thyself, be realistic, set good habits, and enjoy your progress.

Don't beat yourself up for not working hard enough just form a simple habit and start building your wealth, who knows you might lose some extra weight in the process!


ajewett said...

Yo!!! Great blog!! I only wished I played hockey like a 26 year old has been college player!!! I don't want to be a jerk but your math is wrong. $25/wk x 52 weeks = $1300, not $5200. But the point is still valid & one I agree with - bring your own lunch - not to mention the health benefits that come along with it because, let's face it, the only thing you'll get for a fin is the Dollar Menu or a few slices of pizza.

Matt Bader said...

Haha thanks dude. I accidentally multiplied the $100 per month by 52 weeks. Thanks for the correction! I know how to save it not how add it! Glad you enjoy it. Let me know if you ever want to post a guest blog for me. See you at dangles this weekend.