Simple Way to Save $3,000 a Year: Brown Bag It

Every Tuesday is Finance & Family Day at Zen Habits.

Every day at work, my co-workers go out to lunch at various restaurants in our area, while I stay in the office and eat my brown-bagged lunch. I man the office, answering the phones and any visitors that come in, while they go and have a good time at lunch.

Why do I do it? Several reasons:

My lunch, being home-made, is healthier than theirs, which is usually processed or fried or rich in extra calories.
The food I cook is also tastier than that I can get at restaurants, fast food or not.
I get to read my blogs and email while they’re out, making me more productive during my lunch hour.
If I want, I can take off early because I work through lunch.
I save a ton of money.

I submit that I save at least $3,000 a year (and possibly more). How? Well, my co-workers often spend $10-15 per meal on lunch. A brown-bagged lunch costs between $1-3. If you save $11-12 every weekday, for 52 weeks of the year, you get about $3,000. Now, if you also eat out a lot for dinner, eating in for dinner would save you just as much. And if you eat out on weekends, your total amount saved by cooking for yourself could reach $7,500 or more.

As always, here are my suggestions for brown-baggin’ it to work:

Make it great. I like sandwiches a lot, and I’ll add slices of fresh tomato, some fresh basil, spinach, sprouts, French mustard … mmmm. Spruce up your homemade lunch with some tasty extras, like condiments.
Leftovers. Sometimes my favorite lunches are great meals I had from the night before. When I make the Best … Soup … Ever, or my veggie chili, for example, I pack a whole bunch in different containers so I can just grab them for lunch during the week. When the food’s this good, I don’t mind eating it all week long. It’s delicious and I look forward to it.
Snacks. I don’t just eat one meal during the middle of the day. I’ll usually prepare two sandwiches, to be eaten a couple hours apart, so I don’t get to be starving by dinner time and make a pig of myself. I also pack snacks, such as nuts or fruits or yogurt (I use soy yogurt and granola and berries) or pretzels, and I can eat these whenever I get hungry.
Canned foods. I don’t take this route often, but I’ll usually have a can of Amy’s spicy vegetarian chili or baked beans or something that I can heat up at work if I don’t have time to prepare lunch.
Prep the night before. Mornings can be crazy, so I often prepare my lunch the night before — by packing up leftovers, for example, or getting my snacks ready. Then I just grab and go in the morning.
Be sure to save the savings. Saving money on lunch doesn’t really matter if you don’t actually save the money. It’s easy to just absorb the savings in your other spending. Calculate exactly how much you’re saving by brown baggin’ it, and deposit that much extra into your savings every payday. Make your effort count.
Designate your lunch time. If you eat lunch at your desk, you’re probably saving at least 30 minutes of driving time along with the time you wait for your food — so designate that extra time for something productive, or relaxing. Don’t let that time slip away too.

Here’s the clincher: Put that $3,000 a year into an index fund and continue to contribute to it every month for 25 years … and you’ve saved $500,000! Make one other similar change in your spending habits, and you’ve found the easy way to a million dollars.
Good articles on this topic elsewhere:

See also:

Simple Way to Save $3,000 a Year: Brown Bag It

Every Tuesday is Finance & Family Day at Zen Habits.

Why do I do it? Several reasons:

My lunch, being home-made, is healthier than theirs, which is usually processed or fried or rich in extra calories.
The food I cook is also tastier than that I can get at restaurants, fast food or not.
I get to read my blogs and email while they’re out, making me more productive during my lunch hour.
If I want, I can take off early because I work through lunch.
I save a ton of money.

As always, here are my suggestions for brown-baggin’ it to work:

Make it great. I like sandwiches a lot, and I’ll add slices of fresh tomato, some fresh basil, spinach, sprouts, French mustard … mmmm. Spruce up your homemade lunch with some tasty extras, like condiments.
Leftovers. Sometimes my favorite lunches are great meals I had from the night before. When I make the Best … Soup … Ever, or my veggie chili, for example, I pack a whole bunch in different containers so I can just grab them for lunch during the week. When the food’s this good, I don’t mind eating it all week long. It’s delicious and I look forward to it.
Snacks. I don’t just eat one meal during the middle of the day. I’ll usually prepare two sandwiches, to be eaten a couple hours apart, so I don’t get to be starving by dinner time and make a pig of myself. I also pack snacks, such as nuts or fruits or yogurt (I use soy yogurt and granola and berries) or pretzels, and I can eat these whenever I get hungry.
Canned foods. I don’t take this route often, but I’ll usually have a can of Amy’s spicy vegetarian chili or baked beans or something that I can heat up at work if I don’t have time to prepare lunch.
Prep the night before. Mornings can be crazy, so I often prepare my lunch the night before — by packing up leftovers, for example, or getting my snacks ready. Then I just grab and go in the morning.
Be sure to save the savings. Saving money on lunch doesn’t really matter if you don’t actually save the money. It’s easy to just absorb the savings in your other spending. Calculate exactly how much you’re saving by brown baggin’ it, and deposit that much extra into your savings every payday. Make your effort count.
Designate your lunch time. If you eat lunch at your desk, you’re probably saving at least 30 minutes of driving time along with the time you wait for your food — so designate that extra time for something productive, or relaxing. Don’t let that time slip away too.

See also:

Posted on 25 April 2007 in Finance & Family, Simplicity |
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Comments (29)

mickeyckm Says:

April 25th, 2007, 6:51 am

I wonder how you come out the figure 500k in 25 years with only 3k per year.

Ain’t 3000/year * 25years = 75,000

AsmoB Says:

April 25th, 2007, 7:10 am

mickeyckm:
I’m guessing Leo’s guesstimating ~15% annual return on the index fund.

Leo Says:

April 25th, 2007, 7:21 am

Good question, mickey (and thanks for the input, AsmoB) … I should have made that a little more clear. The reason I chose an index fund is that historically they tend to have a pretty good return on investment if you stick with them for the long term, as in this 25-year example. I used 12% annual return, which isn’t super high.

You could play with the numbers yourself using a calculator like this:

http://www.hellodollar.com/archives/2005/08/savings_growth.html

As you can see, you put in about $75,000, like you said, but the return on your investment is well over $400K.

Hope this helps!

Bill Says:

April 25th, 2007, 7:26 am

You are right, eating out is expensive. One way that our family still gets to live a champagne life on our beer budget is that we mystery shop restaurants. We just mystery shop restaurants about once a week, and that way we are getting a free meal, get to enjoy a new experience, and do it without breaking our budget. We have been doing it for about 10 years, so it has become a normal part of our routine. But it is a cool and creative way to enjoy a meal out without breaking the budget.

Balfour Says:

April 25th, 2007, 10:25 am

$10-15 per meal for lunches — wow, that’s nuts! I try to always bring my lunch, but sometime will get something in our cafeteria - cheap, pretty healthy - and on rare occasion, go out for a special lunch, which will be more in that high priced ball park.

My downfall is snacks. I can bring all the healthy afternoon snacks in the world, but I get bored/stressed/grumpy/feeling sorry for myself and want my trashy snacks from the machine or the store, running up my $$.

Jim Says:

April 25th, 2007, 10:45 am

Your equation on lunch cost should also factor in opportunity cost. What do you lose by not making connections with co-workers, friends and potential business partners outside the office? Most successful people in business work methodically to make meaninful connections on a regular basis. It doesn’t have to be five days a week, but taking the lead to invite others to lunch (at places with a healthy menu) and really connect with them can be a great investment.

Ryan Says:

April 25th, 2007, 10:45 am

My time is incredibly pressed and found myself constantly slipping up when trying to prepare food ahead of time.

Now I just keep a collection of microwaveable meals & quick grab snacks handy. Not as much of a savings as if I made all of it from scratch, but considering I can get small LeanCusine meals that I really like for $2-4 a pop its still a decent bit of savings if I just don’t have the time in the morning.

Balfour Says:

April 25th, 2007, 11:57 am

I think the need for using lunches to network depends on the job. At some jobs, it’s great to get away from everyone at lunch time. I try to allow for networking opportunities, while having lunch at my desk most days, so I can use my lunch hour for the gym or to take a walk outside. I generally have a lot of opportunities–social, committees, or work-related–to get to know people at work without using lunch hours for this. But, interestingly, I just made a decision to try to do a lunch about once a week to get to know even more people casually, either by attending a weekly Team brown bag or by making lunch dates with people, not so much for networking, but to have more friends and allies in the workplace, which I recently read adds to one’s happiness on the job.

Pril Says:

April 25th, 2007, 12:12 pm

i guess it depends! I cook but i can’t stand to eat left overs even if it’s not for lunch! lol
but it is overall cheaper…
here is a tip

make large meals on the weekends like a huge batch of soup.. freeze it in ziplock bags for a serving for each take with you to work by the time lunch gets there it’s halfway defrosted!

The Daily Saint Says:

April 25th, 2007, 12:47 pm

Leo, I find that prepping a lunch the night before also helps to anticipate the day and it definitely cuts down on early morning stressors.

Thanks for the post,
Mike

Andrew Flusche Says:

April 25th, 2007, 13:49 pm

I was on my way here to talk about the importance of networking during lunch. But I see that people beat me to it.

I think a good balance can be achieved between bringing lunch and going out with the gang or potential clients, etc. Isn’t life all about balance?

Great post, Leo!
Andrew

Julie Says:

April 25th, 2007, 14:23 pm

I like the idea but for me, given my schedule and abilities, making lunch the night before has rarely worked out. Here is my lazy variation on your advice that may also help others: I bring all the raw ingredients to work and assemble my lunch at work.

If you’re lucky enough (as I am) to have a full-sized fridge, microwave and sink at work, and you can stand eating the same thing for a couple of days in a row, this method is for you. On Sunday, I put in a bag a loaf of bread, packages of cheese and deli meats, tomatoes, a bunch of lettuce, and condiments. Also a bag of apples or several yogurts. I keep the shopping bag in the work fridge all week. At lunchtime, I assemble my meal from scratch.

SD Says:

April 25th, 2007, 15:41 pm

The part where the author counts blog-reading (during lunch) as a productive activity made me laugh. I guess it depends what blogs you read. :)

Leo Says:

April 25th, 2007, 18:44 pm

Great comments, everyone. I understand the need for people in some fields to network, but I’ve never done it, at least not in the “let’s do lunch” sense. I network through working with people on different projects, which seems to be sufficient for me. I don’t judge others — it really depends on their job. I think it would probably do me some good to have lunch with people in my field, but the truth is, I like my home-made lunches, and I like to read quietly as I eat, and I don’t like going to restaurants anymore, unless it’s with my wife. I also like the fact that I’m saving a lot.

This tip won’t work for everyone, as no tip can do that — it’s definitely something to consider, though.

Brian Says:

April 25th, 2007, 19:41 pm

Depending on where you work, it might be possible to brown-bag and network. I teach at a university that has a big cafeteria with multiple food concessions. When I go to lunch with colleagues I usually bring my own meal. I can grab a table while they pick up something to eat, and sometimes, when I want a little extra or don’t have time to make lunch, I’ll buy something there too.

stayfly Says:

April 25th, 2007, 20:56 pm

awesome post and just what I needed.

not only will this save me money but it is sooo much healthier

great stuff!

mickeyckm Says:

April 25th, 2007, 21:20 pm

thanks for the explanation. ;)

Gary Says:

April 25th, 2007, 23:03 pm

how about having lunch with other co-workers who bring their lunch too? i definitely think that eating with others is important. It’s not just about networking but it also builds friendship. Eating is one of those rituals that bring people together.

Jon Says:

April 26th, 2007, 10:17 am

Very good point. I think a lot of people get into the habit of buying lunch every single day, without taking a moment to realize just how much they’re really spending.

However, I’ve found a nice median between making lunch every day, and picking it up. I usually take-out lunch 2-3 times a week. I found that when I tried to make lunch for myself every day, I ended up wasting a lot of food. Why? Well, I’d buy deli meat, lettuce, cheese, and bread to make sandwiches, for instance. But then some days I would have leftovers to eat, or a co-worker would invite me out. In the end, I found a fair amount of my ingredients going bad when I tried to buy enough food to make lunch every day.

Of course, those days when I go pick up lunch, I always spend a reasonable amount of money. I can’t believe some people spend $10-$15! My lunch is a 6″ sub, chips, and soda for $3.99 from Subway, which in theory only costs an extra buck or so than making my own lunch.

Maxine Says:

April 26th, 2007, 11:15 am

To weigh in on the ‘brown bag it’/'network’ argument, I brownbag most days but set aside 1/2 days a fortnight to ‘do’ lunch. I’ll usually go to a restaurant that’s a little nicer than the norm so it really becomes a nice treat. Quality over quantity…

The other thing is that it usually takes me 10-15 minutes max to eat my lunch - then I sometimes meet people for coffee. I still get to socialise and save $ and have a nice coda to my meal.

I find being frugal actually makes me enjoy my little luxuries even more.

Michael Langford Says:

April 26th, 2007, 16:00 pm

> Your equation on lunch cost should also factor in opportunity cost. What do
> you lose by not making connections with co-workers, friends and potential
> business partners outside the office?

Jack and Squat:

1. People who eat in at the office *also* are potential business partners

2. Eating with co-workers is what brownbagging prevents. I *occasionally* eat with co-workers, but I’ve scheduled lunches with old acquaintances who run businesses or friends I’ve not seen in awhile. I do this one a month or so. Guess what, this meal is *always* fruitful. However eating 22 lunches with the same people I could socialize with by the water cooler is useless: they’ll tell me the cool idea anyhow, just not while we’re eating overpriced, poorly cooked food.

3. Want to network with important people you respect and will do you well? Organize social activities like a drink at a bar/coffee shop, outing to a play with dinner beforehand, a mixer at a lounge, a game night at your house where you make dinner, or an outing to a sports event, especially a weird sport (because then no one is a psychofan, but people who dislike sports will go as this one might be different). I’ve hosted a sunday dinner at my house for a year now (50+ times that is), and it is *still* cheaper than eating out every day during the week, and that’s feeding 8-15 people, especially considering my wife and I both get to network that way, and that there are leftovers for lunch to brownbag :o)

All and all, eating out with co-workers is *easy*. Its a little bit of social cocaine that revitalizes some people in the middle of the day. It is *not* an effective way to build valuable connections.

Join or take a leadership position in a group, volunteer, host real events, write a blog, do some professional events. These are all effective things to do to increase your connectedness in a vital way.

Paul Says:

April 26th, 2007, 18:19 pm

My wife and I did some budgeting a while ago and discovered that a 2 cup a day cafe latte habit worked out to be $4368 annually (for two people). Now I’m not about to give up my coffee but I am capable of cutting it back - with a an adequate (not great) coffee machine at work and a little willpower I now pay for no more than 1 coffee every few days but also put the coins I would have used to buy coffee into a jar at my desk, along with all the other gold coin change I get during the week (Australia has gold $1 and $2 coins).

Bagging those coins every month or so and putting an extra couple of hundred dollars into our savings leaves a better taste in my mouth than a coffee ever would.

Leo Says:

April 26th, 2007, 20:22 pm

Great job, Paul. That’s a great example of how a little thing can add up over time … as long as you put it in the bank, like you are … and better yet, invest it in an index fund and leave it there! I especially love the gold coins. I think I need to move to Australia.

Cheryl Says:

April 30th, 2007, 11:22 am

Great article! I am a brown bagger also, and about 6 months ago, also started making my own coffee for the commute in. Used to stop at Dunkin Donuts daily, and was spending approx $32/month on JUST coffee!!! By making my own at home, I only spend about $8 month! I even converted a coworker to bringing his own as well just by talking about the money I was saving!

Leo Says:

April 30th, 2007, 18:30 pm

Thanks Cheryl! I appreciate you sharing your experiences! I love how you converted your co-worker — you’re a frugal evangelist. :)

tehnyit Says:

May 1st, 2007, 19:42 pm

This is a great article on lunches. I just published a post on similar topic just recently, mainly focusing on what can be done with money saved.

http://cheap-as-chips.blogspot.com/2007/04/uhmmwhat-do-i-do-for-lunch.html

Keep great articles coming along.

Kode Says:

June 21st, 2007, 10:26 am

Leo
Eating out should not always be looked at as throwing away money. I make it a habit of going out for lunch atleast a couple of times a week even though my wife could pack me lunch. In today’s world where we are already restricted to our cubes and computers, eating out is one the ways to keep ourselves connected with the people around us. I believe saving every penny will do more harm than good in the long end. In the end we will not know what to do with all the money we saved.

Joe Says:

January 2nd, 2008, 15:49 pm

I pack my lunch 4 days of the week. Not only do you save money, but it also helps the environment.

Lily Says:

January 16th, 2008, 7:40 am

$10-15 per lunch?! I manage to spend €5 to get a lovely and plentiful pasta/sandwich + water. €7 if I want to splurge, then I get a complete meat and vegetables dish. And I work in one of the most expensive cities in Europe. You have to look for the most convenient place.
Yes, I’d like to save some bucks by eating in the office but I don’t like the company…