It’s a Wednesday night and your friend texts you, “Want to grab a bite tonight?” Without much thought, you say yes and walk or drive over to the restaurant to meet your friend. You both get just one entree each, but heck, it was a long day, so you grab a Bloody Mary to go along with your carne asada. Once the meal is finished and you're about ready to get the check, your friend looks over mischievously and suggests a shot of tequila to top off the meal. How could you possibly resist! One or three shots of tequila later, you finally get the bill. Ouch. (This actually just happened to me this week.)
Carne asada - $13
Bloody Mary - $9
Well tequila x 2 - $8
Total - $30
Now add tip on top of that and you're looking at a $36 hole in your wallet. Yikes, that wasn't what you were expecting to shell out when you agreed to grab “a bite.” But hey, it was just this one special occasion. A hard day and all that.
It Doesn't Stop There
What if this happens maybe three times a week? Now you're out $108! Just for three meals! But hey, you're a hard worker, you totally earned the right to be a bit loose with your money. Now let’s take a look at an average work day.
If you're one to order lunch every day at work, you might be used to paying around $13 for a prepared meal. Add a special coffee into the mix and you might be up to $16 per workday. That’s not too terribly crazy - $80 in an average workweek.
The Devil's in the Numbers
At this point, we're shelling out $188 weekly on food we could easily prepare for a fraction of the cost. Let’s extrapolate this cost out and see how much it’s really costing us:
Daily - $26.85
Weekly - $188
Monthly - $817.80
Yearly - $9,813.60
Ten grand a year! That’s not a negligible amount. If we invested that amount into an index fund every year with an average of a 7% return, we would have $430,475.30 in twenty years (see my article on investing for more details). Nearly half a million in cash for eating out! That’s reason enough for me to eat in more often than not. And prepare my own lunches.
That sounds terribly boring and antisocial, though. You don't want to deny every offer to go have a meal with a friend. Instead, though, you could counter-offer with an invitation to cook a meal together. With bulk groceries and liquor 1/6 the price than at a restaurant, you could have a great time preparing and eating a meal in the comfort of your own home.
So when you're walking by a restaurant next time, don’t think of it as a place to get fed. That’s what your fridge is for. Instead, see it as a social place for special occasions only. If you get into the habit of doing that, you'll find yourself with more and more money in your wallet (and index fund!).