40*365 * 5/7 -10 = work days in a year = 104228 days packing (did you take into account only working 5 days out of seven?)

104228 / 6 = 17371 hours spent a day packing (those are groggy morning minutes) (ten minutes per day, this doesn't include time spent buying the food!)

581,826 / 17371 = 5.58 per hour.

Is your time (17371 hours) worth more then minimum wage?

Good point. Time is often more valuable than money.

But for me, I still try to pack lunches; I try to do the whole week's worth in one day--I spend less time that way & never end up with odd amounts of any of the components I use to make the lunches.

It often takes less time to brown bag at your desk then to leave your desk and wait in line or for a table and then to wait to get food and then to wait to pay. If you are getting something freshly prepared, you'd also end up waiting at least as long for them to prepare it as it took you to bag your lunch.

On the other hand, all time is not created equal. If its right before a deadline, and I'm running late, I might pay more than $100 for an extra hour of time. But right now, when I'm being an insomnaic and surfing the 'net, my time has very little value.

The key to packing lunches is to do the packing at a low-value time.

Side note: The $500k is in future dollars, which are worth much less than present dollars. Gotta factor in inflation.

If we're assigning dollar values to ALL time, don't forget to include the 10 minutes that it takes to get through the line at the cafeteria or local fast food joint. Not only would this be an equal or greater amount of time compared to packing a lunch, this time comes during prime working hours as opposed to the early morning when lunch packing takes place. The argument based on assigning a dollar amount to all time starts to lose traction because most people don't really have the opportunity to take a part time job during the time that one would be packing a lunch.

Well said, all. It reminds me of a story that I hear every once in a while that says something like, "Bill Gates makes so much money that he would it would not be worth it to take the time to bend down and pick up a $100 bill."

The thing never mentioned is that Bill Gates doesn't lose any money by taking that time. The $100 is extra.

And yes, the $500k is in future dollars, so we have to take that into account. But another thing I didn't mention is that the amount of money you're saving each year also goes up with inflation. So it's not that bad.

Nice analysis, I've tried packing and eating out.

Actually getting to know your co-workers can be a valuable investment.

I've more likely than not, gone to a restaurant with a server, and so the tips have to be factored in as well.

I think the math in the first comment is incorrect:

~250 working days/year * 40 years is 10,000 days (104,000 is nearly 285 years).

10,000 days * (10 minutes packing/60 minutes per hour) = 1667 hours

$500,000 / 1667 hours = almost $300/hr.

So unless you're making half a million a year, brown bagging it is worth your while.

Assigning dollar values to time only works if you can actually convert *that* time into money. Can you actually get paid for the time in the morning when you'd be packing your lunch. If so, why aren't you already paid for it? By the logic that an hour is an hour, making $20 an hour should gross me $175,000 and I'm wasting 6.5 hours every day sleeping. During that time, I'm not saving ANY money and using up $130 worth of time! Any tradeoff should only be evaluated on the terms of what you either *would* or *could* do or spend on the other side. What would the time otherwise be spent on. If you are actually sacrificing work hours (meaning you get paid for 7.5 hours instead of 8 by making your own lunch), then you are probably making a bad decision if you make over $6/hr. Otherwise, you're not.

The simple reality is that time and money are the currency of modern culture. They can be exchanged, one for the other, on the open market, but there are daily limits, market conditions, physical realities, temperment, etc. that limit the amount of trading you're allowed to do, particularly the time->money conversion. Your time limitations have physical limitations that you will never break beyond, while money can scale to ridiculous levels. 24 hours is it. However, as a result, using your time more effectively to allow your wealth to scale gives you more resources to trade in a given day. Saving $500,000 by bringing your lunch and using time that would otherwise be used sleeping, watching the morning news, etc. gives you lots of trading fodder in the future, including the salary for your own personal chef in retirement to make ALL of your meals for you. Think of the time that will free up :).

Unless you are already working and being paid for every waking hour, you've already traded some of the time for absolutely no money at all.

I take my lunch every day. The savings aren't always apparent, but they are there. And it's so easy to do! Great article.

Time lost packing lunch? It doesn't take that long. Much quicker than waiting in a line to buy lunch, in my case.

Time spent with coworkers socializing? I do that every day as well. My coworkers eat in our company cafeteria. I bring my lunch, they buy. No problem.

Brendan: You're absolutely right, and I completely missed it! Just one more reminder why we shouldn't take things like this at face value. Always check your own numbers (including the ones I give you)!

Have been toying with this very notion lately and wanted throw in some additional considerations.
1. In our state, fast food is taxed at 6%. I hate paying taxes, especially optional ones (I call this one the laziness tax, since it could be avoided with the tips offered). I don't know if that was figured into your numbers.
2. With the ever-increasing cost of gas, the cost of driving to fetch a lunch can add even more to the difference between that and brown-bagging. Don't forget, there's also a tax on the Gas when you but it at the pump. (That can be mathematically considered easily enough, but again, that optional tax thing really irks me.)
3. There are complex environmental issues to with all those cars driving around in search of fat-burgers. While outside this consideration perhaps, it shouldn't be ignored entirely.

I just wanted to point out that in addition to the inflation that wasn't taken account, there's also capital gains taxes.

Additionally, it's been noted that 11% historic stock gains is optimistic for the future. It easy to manipulate a number of statistics to say what stocks should return. I generally read a that it's between 8%-10% and you can really only hope for that 10% if you plan to invest in riskier small companies.

So I'd start with the 9% growth. Factor in something like 3% historically for inflation (which also compounds). That leaves you with 6% growth in real dollars. Suddenly you are very close to the $120K for the bank CD, but still are a little above it. I don't feel like doing the math, but lets say $180K for sake of argument (it's close). You'll have to give up probably about 25% of your final cash to capital gains tax which is about $35K ((180K-40K)*.25).

In the end you get about $145K in the equivalent to today's dollars. That's still pretty sweet and why I brown bag, but I don't want people thinking they can retire just by this method alone.

Disclaimer: I'm not a financial professional, so the claims I make are just how I understand them. As always, see your tax expert, financial planner, etc. before taking any advice that you read on the Internet from a potential idiot such as myself :).

wouldn't the money calculation be easier if you just say he spends 10 min to pack lunch and saves $5?
so he saves $30/hr (in present dollars).

The "making lunch is a bad use of time" argument is wrong. My colleauges spend much more time, deciding what to order, collecting orders and money, driving, standing in line, waiting for orders, comming back to work, distributing change and orders than I do habitually preparing a sandwich, a supplement filled plain yorgurt, two pieces of fruit and a small bag of pretzels. Comming to work with your lunch means the lunch aquisition process won't disrupt my day. So work flow is better and more productive, Also, I start eating my lunch when I'm hungry, another productivity booster. You just can beat making lunch for saving money, healthy eating and saving time.

I bring my lunch every day. I just bring the ingredients of my lunch in every week so I avoid havign to pack a lunch everyday. Also I eat my lunch at my desk which means I don't take a lunch hour so i get to leave work an hour before everyone who went out to eat. I woudl rather have that hour at the end of the day next to a few other hours than have it in the middel of the day when not much can be doen with it. I probably don't socialize with my co-workers enough though.

Amazing. I love how the author gave some great advice, and the assholes sit around challenging and trying to poke holes at it.

Thank you. I'll be attempting to apply this, and I'll see you at the savings finish line.

Well, let's be fair. Inflation *is* a real issue. Though like I said, you will hopefully be making up for a most of it by saving more as take-out lunches get more expensive in pace with inflation.

I *want* readers to challenge what I say, and I am honored when readers are eager to discuss something I write about. It's one of the things I write about here: http://www.hellodollar.com/archives/2005/07/what_hello_doll.html

I never want you to just "trust me".

That said, the point is that you really can save a heckuva lot of money a little bit at the time. All you need is to be disciplined and patient. I'll see you at that finish line too!

I was just about to comment on the math when I saw that Brendan already has. This is a great thread though. I have been thinking about brownbagging more often (particularly after last week's spending analysis..ouch!) but I was lacking motivation. But heck, for $300/hr I will get motivated!

Who wants to eat a sack lunch every day for 25 years? Thanks but no thanks. I'll enjoy my hot meals and retire off my 401k. There are other ways to save money.

"Who wants to eat a sack lunch every day for 25 years? Thanks but no thanks. I'll enjoy my hot meals and retire off my 401k."

There are frozen dinners from a company called Banquet that are $1 from my grocery store. Easily microwavable, it's hot. If I didn't take that easy way out, making a lasanga or something would accomplish the same goal at a similar cost outlined in the article.

Some people are able to fund their 401K and IRAs more with the savings. I'd count myself as one of those people. If I ate out lunches every day, I don't think I could put as much away, or else I'd have to save money elsewhere.

This is indeed sage advice. Whenever I go out to lunch (once a week is a great compromise that Sean above should employ to prevent monotony), I take advantage of the little coupon book. They last for a month, and they are usually buy one, get one free. Water not soda saves $1 or $2, and it's easy to get a great price. Occasionally the portions are large enough to cover TWO meals. I guess that only saves $2 per week. But it's for two of us! Whatever.

And yes, time is money, and $30/hr is enough to make a sandwich. Or find a loving partner who will do it for you.

When added to an overall money-saving strategy, this is a notch-on-the-bedpost that will make each additional cost-cutting trick a bit easier to implement. Practice makes perfect.

Interesting comments on all sides, but in the end, I still choose to brown bag it.

It's really not all that difficult and if you do it right, it doesn't take 10 minutes to pack a lunch. I almost always take leftover from the night before or earlier in the week. When I cook, I make double what my husband and I will eat for dinner and put away the leftovers in lunch-size containers. I keep a couple of containers of yogurt in the fridge at work and Powerbars and other snacks in my desk. There is no way it takes me anywhere close to 10 minutes to pack my lunch.

I also choose to eat lunch at my desk and either leave and hour early or go home for an hour and relax, sit on my deck, etc. I work in for a very small business so socialization with other employees isn't an issue. The three of us are around each other all the time.

The time it cost to pack a lunch, etc is kind of a goofy one in my opinion. With that logic, why should I do anything myself--my own laundry, clean my house myself or prepare any of my meals when I could just go to Wendy's and order off the dollar menu? I clip and use a lot of coupons and people all the time try to tell me that its a waste of time just to save a dollar here and a dollar there. (It really doesn't take very much time.) People clam up pretty quickly when I tell them I save about $2500 a year "wasting my time" doing this.

Your example assumes an average yearly rate of return of 11%
WHERE do you think you can get that?

Better yet, use that half million to open your own restuarant.

Erm, if everyone's time is so valuable - why are you wasting it writing huge comments on a pointless subject.

Depends on what else you would be doing with your time. Yes, my time may be worth a lot more than $5 most of hte time. But if I can pack my lunch the night before when I am normally doing nothing but watching TV, then it is free.

Also, you want to take that 10 minutes to pack a lunch, but you don't want to add the time it takes to stand on line for the take out food, etc. I know my time at 1:00 PM on a work day is worth a hell of a lot moe than my time at 11:45 PM before going to sleep. So if you want to get technical, you are saving even MORE money by bagging your lunch than just the cost of hte lunch. You are putting yourself in a position to be more productive at work, and visibly so, which could lead to larger raises and quicker promotions.

But, not only is the $500,000 in fututre dollars, it is also in PRE-TAX dollars.

Just a couple things about this:

1. If you are not worried about retirement because you know you will have enough, then WHY save it? Persoanlly, I would rather enjoy the $1100 a year at age 30 than having an extra $250,000 of so left over at age 65. Money that I will probably never spend.

2. People who are worried about retiring comfortably are ALREADY brown bagging their lunches often.

Someone needs to check their analysis (regarding the $5.58/hour analysis). Anon is off significantly...

Assumptions:

1) 2 weeks off per year (should be higher due to holidays)
2) Working for 40 years
3) Working 5 out of 7 days
4) Lunch takes 20 minutes per day to buy and make
5) $120000 for basic savings; $580000 for stock savings

52 weeks - 2 weeks = 50 weeks working per year

50 weeks * 5 days per week = 250 days/year

250 days/year * 40 years = 10000 days

10000 days * 20 minutes = 200000 minutes

200000 minutes = 3333.33 hours

$120000/3333.33 = $36/hour (~$75000/year)

$580000/3333.33 = $174/hour (~$392000/year)

I guess I should have read all the comments instead of the first couple. :/

Making your own lunch to bring to work is also much healthier as you know what it's made of. It will save you time and money from recuperating from badly made food. Take it from someone who's lost a few productive days due to food poisoning from dodgy takeaway shops.

a lot of people mention the average stock market returns as 11%. however i've read quite a few books that bash this myth.
1. yes, you can time the market - Ben Stein
2. bull! - maggie mahar
3. Value investing in real estate - eldred

apparently over a 20 years period the average return is only 6%. over a 40 year period its still under 8%. plus if you factor in taxes and commissions, its probably even lower.