Does It Really Pay To Be Frugal For Coffee/Lunch?

Our son is working at a software development company this summer. It’s his first professional job and he has one more year of college before he is finished with his computer science degree.

We took him out for dinner last night and asked him what he was doing for lunch each day. He said most people in his group go out for lunch every day, but he was going to limit it to a sensible 2x a week.  He said he simply brought a PBJ sandwich in a bag lunch today.

This got me thinking about how much a Starbucks ($3) and lunch out ($8) adds up to over time? That is, how many years longer do you need to work in order to afford these everyday pleasures?

I assumed $11/day and 220 work days a year across a 28 year career. I pegged the opportunity cost being a 7% rate of return since it is a long time horizon. These inputs resulted in a cost of $2,420 a year, which, if invested well, would appreciate to an amazing $195,000 by the time a college grad turned 50 years old.

Since the average college educated person in the US earns an average of $62,400 a year, the opportunity cost of coffee and lunch out each day represent a full THREE YEARS of extra work to enjoy the same retirement nest egg.  On top of that, if you add in things like a big morning muffin, a premium parking spot, or frequent cocktails after work each day it could add up to a full decade of extra work.

I have to confess that while I’m not a coffee person, I ate out for lunch almost every day for my entire career.  I’m sure I had NO idea of how much of a big impact it was having on our savings, although having relaxed time with coworkers can also be valuable.

How frugal were / are you with everyday costs like these?

Image Credit: Pixabay

6 thoughts on “Does It Really Pay To Be Frugal For Coffee/Lunch?

    1. Yeah – I’m not sure how much they pay for lunch. I looked at my old MegaCorp lunchroom prices and $8 seemed about right. It depends if they go to Subway, or something nicer.


  1. Like you, I spent a small fortune over my career on lunchesand afterwork dinner and drinks. I actually think it’s a balancing act in the corporate world. Let’s face it, you have to do a certain amount of networking to survive and advance in the corporate world. Lunches, dinners, and drinks are how you strengthen those networks in many companies. However, I’m also convinced a lot (certainly not all) of those costly meals more than paid for themselves in better promotions, raises, bonuses, etc. But I’m also convinced I wasted a lot of money over the years.

    Late in my working career, I finally decided to start eating lunch in my office more often. I made a conscious decision to use the majority of my lunch hours to learn and research real estate investing. It was the best use of lunch time, that I ever spent. I actually started my real estate investing career and built my entire portfolio, while still working (during lunch breaks and after work hours). We still own well over fifty rental units, that I bought during that late career period. It’s the cashflow from those very rental units, that I use today as early retirement income. Fortunately, we don’t really need to tap our retirement accounts at all, but we will likely increase travel, spend some on eventual grand kids, and build out our legacy options with those retirement accounts. So I’d definitely say, balance your lunch time use, not only to save money and improve networking, but also consider the time as a great opportunity for building a side hustle that could result in FIRE.

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    1. Yes – the career aspects of going out for coffee/lunch are certainly important. As I reflect more on it, it brings to mind that many, many of those lunches were ‘working lunches’ with boxed salads and sandwiches, or ‘entertaining lunches’ with suppliers/colleagues paid for by MegaCorp.

      I did have a clever boss who announced on his first day leading our group that there were to be no more MegaCorp paid lunches. It wasn’t so much a money thing – he just saw them as a waste of time. Instead, he went out for lunch every day at a number of quirky places off campus. It was his way to ‘get away’ and break up the day. He’d often grab whoever was around and we’d almost never talk business. It worked great.


  2. There’s additional value to consider, which is building your professional network. Establishing connections and building personal relationships is an important activity early in your career, but also true at many points along the journey. Leveraging your network to find a opportunities that pay more could easily offset the years of lunches and even make FIRE possible. I think that’s the perspective… go to lunch whenever there’s an opportunity to expand your network, but manage as you would any other expense or investment. If it’s an investment, go. If going is a waste, PBJ is a pretty tasty option.

    Liked by 1 person

    1. Definitely agree. Lunch is a huge conduit for networking and keeping up with what is happening in other parts of the your organization or industry.


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