Smart Food &Beverage Spending
After sharing my first post about money management last week, I was excited to see that there's so much interest in this particular topic! So let's dive in some more, shall we? This time, I'll be going over one specific category of spending + saving in order to give you some actionable steps towards making your financial goals a reality. Because most of the time, small steps are much easier than shaking up your entire budget. This category, however, is a big one: food + beverages.
As humans, we need both food and water to survive, but many have the opportunity to enjoy more than that. I'm talking things beyond actual (need to live) essentials, like a morning coffee, multiple happy hours a week, long evenings at fancy restaurants, and more. These things aren't necessarily a bad thing, and I absolutely have no intention of diminishing the lifestyle of others. But it does raise an important question: what do you actually need to live?
Now, before I dive in, just a quick heads up: I'm about to share a bunch of "average" numbers with you all. All of these have been found through available data online, so please do not take them as absolute, as location and lifestyle will be a huge factor. These numbers are used to prove a point and open your eyes rather than outline official statistics.
LET'S START WITH DRINKS
I realize that cutting out coffee or alcohol can be a huge "no way" for some, so instead of offering up that advice, I'm going to propose something else: that you observe your habits for at least one month. In that month, write down how much money you spend on coffee, either at home or away. Same with alcohol. After a little digging, I found that it's not uncommon for the typical US consumer to spend $30 (and often more) on these two items alone, each week, for a grand total of $1,560 per year. If you were to cut spending on these items by at least half, you'd be left with an extra $780 annually, which could easily go towards the downpayment of a house or retirement. It's a small step, but one that provides lucrative results.
For example purposes, I'm going to paint a picture of how my husband (Michael) and I approach this particular category. I am not a coffee drinker, but Michael enjoys a cup or two every once in awhile. Because of this, we don't keep any coffee in the house, but Michael will grab a cup if we happen to be out for brunch. So overall, we spend maybe $5 per month. That's it.
Alcohol is slightly different, since we both enjoy it. But again, we limit our intake. I typically have about 2-4 glasses of alcohol per month, while Michael may have 1-2 beers per week. We mostly enjoy these drinks at home (which saves money), but aren't opposed to going out either. We just don't do it a lot, and often order only water at restaurants. These habits keep our alcohol expense down to about $40 per month.
So if you consider the numbers I shared above versus the average US consumer, we're each saving $1,020 annually, if not more. In just one category of spending: beverages. Do I miss out on life by not drinking a glass of wine everyday? Absolutely Not. I can always order a glass of water if I'm out with friends and when I do have a glass, it remains special, versus the "new normal." Plus, I haven't built up a tolerance (ha), and thus, don't need to keep ordering more.
AND NOW, FOOD
Food is another biggie. But again, it's easy for spending to spiral out of control in this particular category because eating out is easy and fun and tasty. And it's a simple way to socialize with others. It seems like a win win, until you realize just how much you spend on food each month versus what you could actually get away with. Current statistics suggest that the average US consumer spends about $150 per week on food, or $7,800 per year. The only reason, in my opinion, that this number stretches so high is because of how often people opt for fast food and restaurants.
In order to further explain, I'm going to outline how Michael and I approach this category so that you can see the difference. We'll start with groceries. Our budget allocates $50 towards food each week. For two people. And before you call us crazy, here me out: meal planning has changed everything. Seriously. Every Saturday morning, I sit down and come up with meals for the next week. This way, I'll be armed with a carefully crafted list that stops me from over buying or grabbing random food at the store. Other things that help keep costs down:
— We don't eat a lot of meat (0-1 times per week) — I know where food is cheaper at certain stores and shop accordingly — Our lunches are commonly leftovers — I refrain from buying a lot of snack-y food and opt for nuts + fruit instead — I overlap ingredients when possible (ex: use veggie stock twice!) — I (usually) avoid recipes that call for fancy ingredients that we'll never use again
And even with $50 a week, we still shop organic and buy good for you food (quinoa, free range eggs, local milk, etc.). It's kind of amazing how little you can spend if you're mindful about planning the week ahead. I used to shop and grab boxes of pop tarts or frozen meals, just in case we needed a quick fix during the week. But nowadays, it's all about intention, and our wallets have been so thankful for that. ;)
Eating out, on the other hand, is where things get tough. Our goal is to only eat out once per week, but that doesn't always happen. So overall, we typically spend around $65 per week at restaurants. I would love to get that number down eventually, but it's simply where we're at right now.
Spoiler alert: We don't always hit the magic $50 and sometimes it's more like $70. But on the flip side, it can also be as low as $40, which helps even everything out. Travel also messes with our weekly spending, so the above numbers are a reflection of our average spending at home.
- - - - - -
I know that I've already spit out a lot of numbers throughout this post, so now, I'm going to simplify things below with a few key numbers.
THE AVERAGE US CONSUMER SPENDS:
— Coffee + Alcohol: $1,560
— Food (groceries + eating out): $7,800
— That's $9,360 total, per person, per year
— Coffee + Alcohol: $540
— Food (groceries + eating out): $5,980
— That's $6,520 total OR $3,260 per person, per year
If you look at the per person totals, the difference is $6,100, which is a nice amount. With that, you could travel, save up for a house, invest, and so much more, all because you've saved in just two categories: food and beverage. This is honestly where Michael and I are able to save the most, since the amount we eat out and drink are all scaleable and non-essential. We still treat ourselves, but in a way that's fruitful and not harsh on our bank account. A true win win.
Now, I realize that our lifestyle will not be the same or doable for everyone, but as I mentioned above, a lot of these items are variable, meaning that you can cut back here and there and be absolutely fine. Think of it this way: if you kept the majority of your current habits the same, but cut down on the amount of times you eat out per week, you'd experience a noticeable improvement in savings. By changing just one thing. And if you're more daring, think about what life would be like with two less cups of coffees per week. Or two less glasses of alcohol per week. It may be a little tough to adjust, but the concept is simple and worthwhile on your wallet (and let's be honest, body).
Give it a try and let me know how it goes! And if any of you have other tips that haven't been shared above, leave a comment below. I'll be diving into other categories (like credit cards, rent vs. mortgage, business expenses, etc.) in the future. But for now, this is a good first step!