How much money are you spending on food?

                            How much money are you spending on food?

Whenever I speak to someone about their finances, most conversations start by the person complaining about how they don’t make enough money and that is why they can’t invest or save for a better future. The conversation then leads to them talking about how a raise would help them start investing or saving money. The first question I ask is “How much money do you spend on food every month?”

Before I got on the path to financial freedom, I too thought that the only way I was able to save money would be to get a raise. That’s what everyone else says. I quickly learned how inaccurate the statement is.

I decided to march into my Bosses office and demanded a raise (Lies! I sent her a well worded, respectful email) and she accepted. She gave me a 10% raise. I was ecstatic until I realized that even though 10% is more than the average raise, a 10% for a 50K salary is only $5000. Because we have to pay taxes on those earnings, which are about 25% (Give or take). That leaves you with $3750. Now if you divide that $3750 into 26 weeks assuming you get paid every two weeks like me that is a paycheck increase of $144 per paycheck.

Once I realized this was my reality, I knew I had to find another way. After reading some books on personal finances like Set for Life by Scott Trench, The richest man in Babylon by George S. Clason and Rich Dad Poor Dad by Robert Kiyosaki I realized that I needed to begin investing my money on assets and things I actually care about.

The first thing I decided to do was to track my expenses. I did this by downloading the personal capital app and creating a spread sheet. I didn’t give myself a budget. I just wanted to know where my money was going. After the first month of tracking my expenses I realized that I was spending too much money on food. I spent $840. There are families that I speak to that don’t spend that much money a month on food, let alone one person.

I knew where I needed to begin. When I took a closer look at the numbers, I realized I was spending about 20 dollars a day on food ($5 for breakfast, $7 for lunch, and $8 for dinner). In a span of 30 days, that’s about $600 a month. The rest of the money I was spending on food would be in restaurants. In response to these results, I decided to change how I go about my food expenses. I decided to start going to supermarkets every Sunday. Not just any supermarket though. I found Trader Joe’s. A great supermarket that sells their products at great prices. I was essentially eating the same things I was eating before. The only thing that changed was the extra hour I was now spending once a week to prep my food for the week. Now in terms of going out to restaurants to go eat sometimes, I decided to give myself a cap of 200 dollars a month. Even though I want to save money to have more money to invest, I am not willing to sacrifice some of the things I do that make me happy. So if you like going out to restaurants and eating out with your friends, go for it.

The next month I took a look at my food expenses for the month and there it was at the bottom line of my spreadsheet. A positive cash flow! I broke even last month in terms of my expense/income statement but because I changed the way I bought my food, I was able to save $440 bucks. I don’t know about you but for me, that is a lot of money. All I did was invest 2 hours a week on buying and prepping the food for the upcoming week and I paid my self $440 to do it.

Food might not be something you are willing to compromise. That’s OK. It doesn’t have to be food. But if you are interested in creative ways to save money, track your expenses and take a look at where your money is going. Most people have no idea.