No, the lottery isn’t the answer, nor is thinking positive thoughts. If you want to save more, you have to spend less. Let me explain.
Stay home more. It’s that simple. I don’t mean stop going to the park, walking your dog or even going to the library. Just go out to eat and drink less. It really adds up.
The latest bankrate.com survey lays it out: Nearly four out of 10 Americans polled go out three times a week to eat or for coffee or drinks. They spend more than $2,400 on restaurant meals and takeout meals alone. Let’s break it down:
- Each week, the typical American on average buys takeout or restaurant food 2.4 times, buys 2.5 prepared beverages (like smoothies and brewed coffee) and spends $17 on lottery tickets, according to a Bankrate survey. In total, Americans spend $2,944 a year on these financial vices, on average.
- Households in the lowest-income bracket (earning under $30,000 a year) spend 13 percent of their income on the financial vices included in the study.
- Meanwhile, the highest-earning households (with an annual income of $75,000 or more) spend just 2.6 percent of their income on prepared drinks, restaurant food and lottery tickets.
What do you need to do? Cook more meals for yourself. Even going to a butcher shop and buying and cooking quality meat is cheaper (per person) than buying a restaurant meal. You can buy an entire bottle of reasonably priced wine or beer for a single restaurant serving.
Then there’s the coffee issue. I need my java in the morning, but I’ve found that I can make a better cup of coffee myself by purchasing my favorite dark roast in the supermarket and making it at home with my french press.
Most coffee shops will serve you whatever they have in their pot. My coffee is fresh and robust. I go to a coffee shop maybe once a week, mostly to socialize or for quick meetings. I generally avoid their overpriced food.
What can you do with the savings? Automatically deposit it in an emergency savings account and 401(k). You can’t spend what you can’t get your hands on.
John Wasik speaks and writes about innovation, investor protection, money management, economics, college financing, retirement and social issues. His latest book is “Lightning Strikes: Timeless Lessons in Creativity from the Life and Work of Nikola Tesla,” a revealing look at the disruptive innovations of one of the world’s most ingenious inventors. He also co-written “Waging War on Wall Street,” a guide to investor protection. All told, he has written 17 books including “Keynes’s Way to Wealth” and “The Debt-Free Degree.”
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