The aim of this Crushing Costs series is to summarise shortcuts to Financial Independence, so you can work out what actually works well and which of these tools will help you achieve your goals. We also want to cut out some of the myths that people say will make you richer.
Can taking a lunch box to work make you rich?
Can you reach Financial Independence quicker by taking a lunch box to work? Do packed lunches actually save you money? Are packed lunches worth the effort? I have read lots of articles over the years saying you will save a ton by packing your own food. However, with a meal deal at your local supermarket only costing around £3.00 do the numbers really stack up? Let’s unpack it and find out.
I always find it easier to use real world examples that are relatable. I’m going to use two fictional employees to see how the numbers compare.
Meet Jennifer and John:
Jennifer typically goes to Costa Coffee for lunch or picks up a salad from Pret-A-Waitrose. Jennifer has an income of £30k per year. She is health conscious and looks for quality lunches, in line with her life goals.
John usually goes to Tesco for lunch and buys the £3 ‘meal deal’. John has an income of £20k per year. He tries to keep his lunch costs low by sticking to what’s in the offer.
Let’s compare our two lunch buddies.
How much do they spend on lunch per year?
Jennifer’s typical meal is a healthy salad or wrap (£3.95) washed down with a skinny caramel latte (£2.45). Seems reasonable at £6.40 for the both? How about £1,484.80 per year?
There is a meal deal at Costa for £4.95 however, none of the options fit with Jennifer’s healthy lifestyle (they know this, you know) and so she cannot take advantage of this.
Top tip: Bring a reusable cup and save 25p per drink. This would save Jennifer £58 per year.
Jennifer’s after-tax take home is around £23,780 per year. She is therefore spending over 6% of her income on lunches alone.
John sticks to his Tesco meal deal and spends £3 per day, totalling £696 per year.
John’s after-tax take home is around £16,980 per year. John is spending around 4% of his salary on lunches.
According to the numbers, it looks like sensible John is winning. However, Jennifer still takes home more than John, even after taking out her more expensive lunches. Depending on how Jennifer spends the rest of her money, she could still be on a quicker path to FIRE (Financial Independence, Retire Early). This is the power of a higher income, but we we’ll save that for another day.
Jennifer could save money by simply swapping her lunch destination but let’s consider what impact taking a lunch box could have on her bank balance.
How do packed lunches compare?
Well, by comparison, they can be cheap. I usually cook a £5.00 chicken on a Sunday evening, shred it, pick the bones clean of meat and use this all week to make sandwiches for me and my kids. If I add on the cost of bread, butter, some snacks etc we are probably at about £15 per week for 3 people, let’s say about £5.00 each. If you are only making lunches for yourself then the cost per lunch may be higher. This equates to around £232 per year for my lunches, or £1 per working day.
If Jennifer gave up Costa and packed a lunch, she could save £1,252 per year, that’s over £100 per month, or over 5% of her take home salary. If John swapped to packed lunches, he could save £464 per year, or 2.7% of his take home salary. For Jennifer this is the equivalent of getting paid nearly £2k extra per year. How hard would you have to work to justify a £2k pay rise? If you are like Jennifer, you don’t need to ask for a pay rise, simply change your lunchtime habit!
Are packed lunches worth the extra effort?
The impact taking a lunch box to work depends on your starting point. I was very much like Jennifer; I didn’t stick to the meal deals, I bought other snacks and I didn’t plan ahead as I didn’t think it was worth my time. I used to work out how much I got paid per hour and then work out if the time I spent making a sandwich each day was worth it. One flaw with this mindset was no one was paying me when I was at home so that time wasn’t actually worth anything. If I had a side-hustle that generated income in the evenings, then this might not be the case. Once I’d crunched the numbers, I realised I needed to get better at planning ahead. This is a key pillar of the Financial Independence mindset, you must prioritise this ahead of non-productive activities. I now make lunches while listening to music or podcasts to double-down on that productivity.
In our example, John’s annual saving over 20 years, after compounding at a conservative 4.5%, could equate to over £15k. Jennifer’s swap to packed lunches, over the same period, could be greater than £40k (see chart below).
They are both significant numbers. For me, I estimate this allows me to save around £1k per year. Not crazy savings I know, but this is just one area and when combined with others it soon adds up. Another way to look at it, is that Jennifer currently takes home £23k per year. By making packed lunches over a 20-year period, she saved nearly two years of take home pay! If she added this to her pension, and avoided paying income tax, the benefit could be even greater.
Other benefits of packing a lunch
One of the biggest benefits for me was that I no longer wandered to the shop at lunch. This usually ended up with me adding additional items to my basket. Some days I was spending £10-£15 extra per day when I only planned to grab a sandwich. According to the Express (I know not the best source) lunchtime spending is on the rise with 31% of Brits admitting to shopping during their lunch break. The average millennial spends £245 shopping per year while on their lunch or study break. By packing a lunch, it can stop you from being tempted – why put yourself in that situation?
Why not go for a walk during your break, get some fresh air? Exercising, even if it is just a short walk, can help clear your mind and give you additional energy. It also takes you away from your computer screen. If you have a sports centre nearby you could get 30 minutes of gym time in or a quick swim. I used to swim about a mile in my lunch break, which was a great way to break up the day and stopped me having to go work out before or after work when sports centres are typically busiest.
3. Personal Development
You could use this time to read a book, learn a skill, develop a business or like me, write a blog! An hour a day can be squandered walking around the shops. This is the time you have off the clock to do what you want, so why spend it looking at shoes? Get out there and learn something new, make yourself better. Don’t have enough time for a side hustle? Now you have.
You could use your lunch break to socialise with friends, colleagues or family. Call people you haven’t spoken to in a while, develop relationships. I use my lunch break to call friends and organise my evenings and weekends.
Maximise your lunchtime savings
Don’t forget about weekends. I took my brother and my two children for a coffee and a cake over the weekend and it set me back about £25.00. This one “treat” cost me a week of the savings I made on my packed lunches. I typically pack a lunch for weekend trips as well. This saves a fortune, especially when taking the kids out. It ensures I control exactly what me and the children eat so we are not consuming junk, and we eat when we want without waiting in queues.
One thing to check and monitor is the cost of making your lunches. Lots of fancy ingredients and additional snacks will increase your meal/day cost. Just because you make it at home it doesn’t mean it will be cheaper, so keep track of how much you spend.
Packed lunches have worked well for me, especially as I was spending like Jennifer. I have personally gained from all the above. I pack my lunches nearly every day and I use my lunch breaks to walk, read, chat to friends and now, write a blog. It feels to me like I have more time in the day to do “me” stuff. One hour per working day is 20 hours a month and you’d be surprised how much you can get done in that time.
Lunch box ideas
If you want to make packed lunches check out the links below for some inspiration:
For some healthy lunch box ideas (read Instagram worthy) try Cosmo’s page.
For some cheap lunch box ideas why not get some inspiration from Student Eats.
For kids lunch box ideas and alternatives to sandwiches head on over to the BBC website.
If you are worried that friends and colleagues are going to judge you for bringing in a cling film wrapped sandwich, first remove these thoughts from your head. If you want to add a bit of style, then try out some of these items from my wish list:
Bento boxes are so “on trend” right now, said me never, but these will make you look like you know how to lunch in style.
Want to know what’s cooler than a Bento box? A tiffin box. Originally used to carry Indian meals, hipsters are now taking them to work. At £35 this one is going to eat into (man, I am so funny) your lunch time savings.
Practical and cost effective meal prep containers will do nicely if you want to maximise your gains.
Please be aware how crazy it is to buy stuff in order to save money! I take my lunch in a bag but, when people ask what I want for Christmas and birthdays I head to my Amazon wish list which contains items like those above.
Packing lunches will not make you rich alone, but they are part of the marginal gains required to build your wealth over a period of time. They are another weapon in your arsenal, but they cannot be used exclusively; to be effective, combine them with other tools to ensure you get maximum benefit. For those of you starting out with the concept of Financial Independence, once you are into the habit of making lunches it gets much easier.
PS. I have written this whole blog during my lunch break! Go me!
This has been the first blog in our “Crushing Costs” series. The series aims to give you practical examples of how to lower your costs. If you liked the article please share, comment and follow us for more.
This article is part of our “Crushing Costs” series. If you enjoyed reading this please like and share using the links below. If you would like to find out other ways we have saved money, please follow us. We generally hang out on Twitter and Instagram. Alternatively, leave your e-mail address to get notified when we release new content. See you next time.
“There is no such thing as a free lunch” Martin Friedman
How did you work that out CashCurrator:
For the purpose of this exercise we will assume each worker spends 232 days at work per year (52 weeks minus 4 weeks holiday minus 8 bank holidays)
To work out salaries i have used The Salary Calculator and not deducted for pensions, student loans or any salary sacrifices.
Compound interest calculator courtesy of Monevator