This Week in Your Wallet: September 4, 2012
In honor of our kids going back to school this week, I have a question for you: when you were a kid, didyour mom give you lunch money so you could buy your lunch from the cafeteria, or did she pack you a brown bag full of goodies? My mom did the latter. The brown bags she gave me had better (and cheaper!) food than I could get at the cafeteria, and sometimes even a little note reminding me she loved me. (I think the lunchbox note is a rite of passage, no?)
I’d like to think that my affinity for homemade lunches stems from those early brown bags, but I know a big reason that I still like lunch from my own kitchen is that it saves me money. I can use up whatever ingredients are around the house (the other day, for instance, I snacked on a fruit salad that had been leftover from the night before), which often makes for a healthy meal, too. And many days nothing makes me happier than a good old (cheap old) PB&J.
I’ve been thinking about my lunching habits thanks to a recent article in Time’s Moneyland blog, which noted that many people eat out for lunch three times a week. If they’re spending $10 per lunch, thishabit is costing them a little over $1,500 per year. If you live in a pricier city (like New York), you might even be spending $15 per lunch. According to one calculation, New Yorkers who brown bag it to work could save over $30,000 over the course of ten years.
Curious to find out exactly how much you could save? Try using this great online calculator, which lets you personalize the numbers to fit your lunching habits. This tool is especially useful because it calculates what these lunchtime savings could bring to you if you were to invest it. I did my own example, where I told the calculator that I eat out three times a week and spend $8 each time. I then told it that I would brown bag my lunch (for a grand total of $2 per homemade lunch) for ten years. The calculator told me that in doing this, I would save $936 per year. Invested at a 5% rate of return, those brown bags could make me $12,112.02 over ten years. Not too bad, right?
For more information on what you can save through brown bagging your lunch, I recommend reading the full Moneyland article, linked above. To get you in the “homemade” state of mind, it even has a few cost-efficient meal ideas.
And now, here are the other headlines for the week:
Be cool, go to school
While we’re on (somewhat) of a back-to-school theme, I wanted to share this article from Marketwatch with you. It talks about why, in the midst of scary stats about the soaring cost of college and the staggering price of student debt, going to college is still far and away better than the alternative. According to the article, recent studies have found that high school graduates who do not obtain some additional schooling have an unemployment rate of a whopping 31.1%. What’s more, college graduates earn an additional $1.2 million more over the course of their lifetime than do their high school-only counterparts.
How fuel-efficient cars affect our buying habits
Forbes is reporting that strict new fuel efficiency rules have been finalized, and that these rules will have an effect on how America buys its cars. According to the new fuel efficiency standards (which go into full effect in 2025, so still a few years away), cars will have to get an average of 54.4 miles per gallon. As a result, the sticker price of a new car will increase by $3,000. This may sound steep, but when paired with the fuel efficiency standards, a driver will make up in fuel savings within 3.3 years of the purchase. Plus, there’s the fact that I’m telling you all of this now, so you have 12 years to prepare!
Are your grown children like boomerangs?
Have you heard of the phrase “boomerang kids”? It’s used to describe kids — well, adult children, really — who are moving back home after having “moved out.” It’s a growing trend, and an increasing problem for parents who just want to focus on preparing for retirement. (And rightly so!) According to a recent Pew study, three in ten parents of adult children said that at least one of their children returned home because of the economy. This Wall Street Journal article has some great tips on how to deal with an adult child who has come back to the roost (among the most important: discuss your expectations for household contributions), but in the meantime, I’m curious: are any of you in this situation? Do you have adult children who have moved back home — and can’t seem to move out? I’m looking to profile a family for a segment about this, so if you live in the New York or New Jersey area and would be willing to share your story, email me at jean@jeanchatzky.com. I’d love to hear from you!
Have a great week!
Jean
