Money Saving Tips – Part 2

If you are doing lunch outside everyday, you are pouring money down the drain. Let’s take a look at the cost of doing lunch outside (instead of packing lunch from home) daily. Work-day lunch usually costs from $8 to $12. Let’s assume your daily lunch costs you $10. I am using $10 to make our examples simple. If you eat out everyday, your cost would be as below:

Weekly Cost = $10 * 5 = $50

Monthly Cost = $50 * 4 = $200

Yearly Cost = $200 * 12 = $2,400

$2,400 annually is a lot of money. If you are in a 42 per cent tax bracket, you keep 58% of each additional dollar you earn. When you consider all the taxes and costs associated with earning that after-tax $2,400, saving $2,400 annually means actually saving of $4,000 in pre-tax savings. Let’s put it another way – if you can brown bag your lunch, think of it as you are giving yourself $4,000 raise annually.

Above example looks good but it may not be possible for you to cut eating out everyday. What you do in that case? Cut above number in half. It means instead of eating out 20 days a month, brown bag your lunch for 10 days and eat out the remaining 10 days. You still will be saving half of the amount you were spending before.

Let me stop here today. I will be discussing how you can save money on phone next time.