Are Starbucks and Chipotle Feasting on Your Wallet? Visa Can Help
Put down the french fries: Your lunch break is costing you a lot more than you think.
According to a recent survey from credit-card processor Visa (V) - Get Report , American consumers are spending an average of $2,746 a year -- that's $53 a week, or nearly $8 a day, on their midday meal. On a regional basis, diners in the South spent the most.
If you're congratulating yourself right now for not eating out every day, stop. Those figures assume you occasionally eat at home or pack a lunch.
Of the average national total, only 40%, or about $1,043, was spent on dining at restaurants, the Foster City, Calif.-based company's study found. Nearly 70% of respondents ate out at least twice a week, spending an average of $11 per meal, compared with $6.30 for a packed lunch from home.
It's something most people don't think about, according to a random survey in downtown New York City: Participants' estimates of annual spending ranged from $1,000 to $10,000.
Part of the problem is that even small amounts add up quickly. While the price tag on your grande latte and croissant at Starbucks (SBUX) - Get Report or your shredded pork burritos at Chipotle (CMG) - Get Report looks trivial, such purchases can quickly total thousands of dollars, eating into potential savings and curbing disposal income, personal finance experts say.
"That $8 a day is really $12 a day," said financial adviser Ric Edelman, chairman and CEO of Edelman Financial Services. "For you to spend the $8, you have to earn $12 because of income taxes. It's actually about 30% worse than you think it is."
If you're finding the results of Visa's survey disconcerting, the Foster City, Calif.-based company expected that. It disclosed the results in tandem with the launch of its freeLunch Tracker app for Apple's iOS. Relying on daily input from customers, the app calculates monthly and yearly spending totals so users can track spending.
The figures from Visa's study don't include coffee, newspapers, candy bars or cigarettes -- little add-ons that make a big difference.
"It's the pennies that add up to massive amounts of money," Edelman said. "It's the frivolous spending that is seriously interfering with people's ability to achieve their major goals in life, such as college, homes, and retirement."
Men are considerably worse at managing mid-day meal expenses than women, it turns out, spending an average 60% more. "So you can turn to your spouse one day and say, 'Sorry honey, we can't retire, but I've been enjoying potato chips all these years," Edelman said.
Students, whose typical lack of money helps compensate for a blissful lack of financial awareness, spent an average of $27.47 a week eating out, and unemployed Americans spent an average of $15, Visa found.
At the other extreme, only 1% of Americans spend $9,000 a year ($50 per lunch, which might include steak, lobster or several cocktails). Some 32% said they don't eat lunch out at all.
For people concerned by the cash outlay, correcting it is fairly simple, Edelman pointed out. Drinking free water rather than buying a soda, or packing a lunch at home, can help.
"People are spending money frivolously simply because they don't realize it matters," he said. "As soon as you realize the impact, it's easy to change the behavior."
Nat Sillin, global head of financial literacy at Visa, offered a few other suggestions: "Clipping a coupon or choosing a less expensive item can save you hundreds over the course of a year," he said. "Splurging isn't necessarily a bad thing, but it has to fit within your budget. Raiding your savings for a fancy lunch isn't worth it."