Paying Off a Mortgage by Brown Bagging Your Lunch

I've written about how we paid off our mortgage as well as how we all can save money by taking our lunches to work, but this piece by Crown Ministries (pdf -- page 14) tells the story of a guy who combined the two ideas. He started brown bagging his lunch to work and put the money he was saving against paying off his mortgage. The details:

The daily savings of brown-bagging my lunch was about $5 per day. That’s $5 times 21 working days per month, or about $105 savings per month, which is good in and of itself. But if I had not been intentional about it, the $105 that I saved would have gotten lost in the shuffle and spent in some other way. That’s when I developed the Index Card System.

The Index Card System ensures that the money we intentionally save by means of brown-bagging our lunch, or any method of cost saving, gets redirected purposefully. Here’s how it worked for me. I took ordinary index cards and wrote “$105” and the months “January” thru “December” on them and put them in with the rest of my bills. Each month that my mortgage was due, I treated the index card as a bill and used it to pay an additional principle payment on my mortgage. I simply wrote “Principle payment only” in the memo, and the bank applied that money against my mortgage balance. None of that money went toward interest. The full amount went directly to reduce my mortgage balance. As a result of sticking to the Index Card System, I knocked seven years off the life of my mortgage and saved almost $14,000 in interest.

Think about that. By simply applying the money saved from brown-bagging a lunch, it is possible to knock many years off the life of your mortgage and save potentially tens of thousands of dollars in interest. Anybody have a taste for peanut butter and jelly?

What a great example of the fact that if you can keep small spending under control, you can have a MAJOR impact on your net worth. With one simple change over a long period of time (he doesn't say how long, but paying off his mortgage didn't happen overnight), this man dramatically improved his finances. Many of us can do the same -- if we simply make a small change here and there and have the discipline to see it through.

One other note: I'm sure it just wasn't the savings that helped him pay off his house early. He probably bought a house the "right" way.

Comments

[Dave]

This is a great story, and something we can all aspire to. However, 2 challenges come to mind:

1. How was it possible to save $5 a day for lunch? What was this guy eating before and after? I generally like going to Subway Sandwiches for lunch, and they offer footlongs for $5. Even if I tried brown bagging on a regular basis, realistically I would only save $2-3 a day at the very most.

2. As a general rule, you must always take the TIME factor into account. How much time did it take this individual to prepare his lunch every day? How much free time did he have? As a busy corporate drone with a wife and young child, it's just not realistic for me to think either I or my working wife will have the time to prep, cook, or otherwise brown bag lunch every working day.

[Dave]

2 cont. Sorry, what I meant to add was that if you discount the cost of the time to make the lunch in monetary terms (as any good economist would), the true savings for this individual would be $5 - (X) per day, "X" being the value to him of the time spent making lunch every day.

My point is, I celebrate and respect this man's story, but for me, a $5 Subway footlong is not such a horrible trade off.

[Patrick]

Dave- $5 Subway sandwich + drink = $6+. My brown bag lunch cost me under $1 per day = $5+/day savings. I make my lunches on Sunday night in less than 1 hour and have them packed for the whole week.

I think you missed the point that it's not the $5/day savings but that eating out at lunch can "cost" or save $14,000.

[Matt]

This is a brilliant idea. Not so much paying off the mortgage early (though that was a feat in and of itself.) but the Index Card System. I had always wondered how to account for some sort of "savings" (Brown Bagging it, skipping starbucks, etc.) without just going out and spending it and this is a great little device to keep from spending.

[Dave]

Patrick, what do you brown bag for lunch? Is it PB&J sandwiches like the guy in the story? I'm very curious as to what it is you make on Sunday night that lasts through Friday. If you eat canned beans and canned tuna for lunch every day, you might be able to get away with lunches that are less than $1 a day, but I find that when I prepare lunches it costs me more than that.

A $5 footlong plus a drink and chips is closer to $7. Most people can get away with a 6" and some snacks packed from home, which would make it cheaper, but you probably don't want Subway every day, and will go out somewhere where it's at least $7-8. I eat PBJ or cold cut sandwiches about half the time and eat leftovers from dinner the rest of the time. The leftovers take no time, since I'd have to pack them up in something anyway, and the sandwiches take maybe 5 minutes during a commercial the night before. Also consider that it takes most people 15-30 minutes just to drive back and forth to lunch, so time isn't really a good excuse. In fact, if you're really pressed for time, get some frozen meals for $2-3 each and keep them in the freezer at work. You won't save as much, but you're still saving.

[Patrick]

Dave- This week I am enjoying Chicken & Noodles. ($1 bag of noodles,$2 lb of chicken,$2 3-can of cream of chicken soup) This makes 5 servings. Keep in mind that when any of my lunch ingredients go on sale I stock up. Next week it will be homemade sausage calzones.

[Walden]

Dave - My husband and I brown bag every day. On the weekends after grocery shopping I cut up fruits and veg and put them in baggies to take each day. After dinner I put some leftovers into single serving tupperware, or I make a quick sandwich in the morning. Takes me no longer than 20 minutes total to make 5 days worth of healthy lunches and snacks - so it definitely can be done! I usually guestimate the cost of my lunches to be about $2-3 max.

I love the index card idea, that would really help keep my husband and I on track!

[Dave]

Wow, lots of thoughts:

- I can easily do Subway 3-4 times a week. I don't get chips or drink. I drink water, which is free, so it's typically %5-6/sandwich.

- The commentor who said I probably don't want Subway every day, well PB&J every day isn't so great either. Patrick, it looks like you have a great system, but I personally would get tired of eating the same meal for lunch for 5 straight days. Don't forget, also, the time it takes to shop for your groceries, compartmentalize your meal, and clean up and do the dishes. These seem like trivial things but for me they take a lot of time.

- Also, I don't know where you live or where you get your groceries, but in at my supermarket, it costs a lot more than that. Chicken is at least $5/lb, noodles $2-3. I guess the lesson is, wherever you live, the cooking works for you, but in my neighborhood it costs a lot more for groceries.

- I often bring leftovers from dinner to work also. Cooking dinner also takes time.

- Trader Joe's has a number of frozen and ready to eat entrees in the $2-6 range that I find to be a God send.

- Finally, it's really not an apples-to-apples comparison to compare Subway to PB&J or cold cuts.

Anyway, find the system that works best for you. And thanks for the tips!

[Whit]

It takes less then 5 minutes to prepare a packed lunch that can include a sandwich, canned or fresh fruit, chips, granola.... probably about the same amount of time one stands in a standard deli line.

[Dave]

Whit,

I disagree. It takes 5 minutes to prepare a sandwich? Have you actually timed yourself doing this? I know this is getting into nitty gritty, but here it is:

Pull out plate.
Pull out bread.
Pull out table knife.
Pull out condiments (let's just say Miracle Whip).
Lather both sides with Miracle Whip.
Pull out turkey deli slices.
Layer 2 slices of turkey on your sandwich.
Pull out cheese.
Lay one slice of cheese on top of turkey.
Pull out lettuce.
Wash lettuce.
Dry lettuce.
Put a few pieces on your sandwich.
Pull out tomatoe.
Wash tomatoe.
Pull out cutting board.
Pull out knife.
Slice tomatoe.
Put sliced tomatoe on sandwich.
Close sandwich.
Put sandwich in zip lock bag.
Put ziplock bag into a brown paper bag.
Close cheese, turkey, lettuce, tomato and bread wrapper.
Put cheese, turkey, lettuce, and tomato in fridge.
Put bread back wherever your bread goes.
Put cutting board, knife, table knife, and plate in sink.
Wash dishes.

Sorry, but in my personal experience, all of that takes way more than 5 minutes. And that's just a very basic turkey sandwich, without added condiments like sprouts, cucumber, avocado, olives, onions, and other things you can get on a Subway sandwich. Adding all of those things, and you're looking at 20-30 minutes a day.

[MrAtoZ]

I'm in the middle ground category: don't like the time and hassle of making my own sandwiches every day, but I do go to the aforementioned Trader Joe's and stock up on frozen meals (good burritoes and Asian entrees) for a few dollars each and then I microwave them at teh office.
So I don't have to drive or schlep somewhere each afternoon to purchase lunch, and microwaves are by definition quick. I bring my own ice tea and apples as well. All this makes me somewhat of a loner in the lunchroom on some days, but the savings are at least $100/month compared to buying lunch every day (which I still do a few days a month just to be stimulating of the local foodservice community....)

[Strick]

The key for me is mix it up, and don't go too cheap unless you're really in financial straights and it is necessary (big difference between the quality of meal you can make for $2 instead of $1, which makes it possible for me to keep doing it, and the savings is still huge over time. Definitely throw in occasional days where you do buy lunch out, it actually tastes much better when its a treat and not the norm.

[Susan]

I guess it's all a question of how badly you want it (to save the money) and what you are willing to sacrifice to make it happen. I make my lunches on Sunday for the whole week (pasta salad, mac & cheese, tuna casserole, soup, or PB&Js). I put everything into 5 little containers and I'm all set.

I also cook dinners on Saturday & Sunday for the whole week (since I work about 65 hrs a week). I could easily say it wasn't worth my time and we could order in cheaper, but the fact is, I save money (I spend $80 a week on groceries for the whole family - on Long Island - which has a pretty high cost of living), my family gets healthier meals, I don't have any morning hassle of assembling a sandwich with all kinds of "fixins" - I grab a yogurt (whatever brand is on sale for $.30 - $.50 that week) and that's breakfast - a container for lunch, a piece of fruit and I'm done. I keep a refillable stainless water bottle at work and I fill that up from the water cooler before I head out for lunch and that's my beverage.

Yeah - it can get boring, but 20 minutes after my lunch break, I kind of already forgot what I had - so I'm glad I didn't spend $10 on a deli sandwich (that's what turkey and cheese with lettuce on a role would cost in my area) and $2 on a drink. I could easily spend $10 a day if I went out to lunch every day and $200 a month is a LOT of money that I don't need to spend.

For me, it's well worth the little bit of time I put in (since I'm already cooking 6-7 dinners on the weekend) to throw together another "meal" that I package up into my lunches.

[David]

I don't understand why so many people are viciously opposed to the idea that you can save large amounts of money by packing your lunch.

I've been doing an experiment over the past month or so. Due to strange work hours, I normally can't eat lunch or dinner at home during the week. I normally ate at Subway for both those meals (quick and easy), but I decided to start packing my own meals instead.

I've tracked all the money I've spent on groceries for these meals, and have counted every single meal I've replaced so far. Here's what I've found.

First, I assumed that each meal I would have ate out would cost $6.31. That's the price of a footlong after tax, with no drink and no side.

So far, I have spent a total of $48.11 on groceries, including a mix of lunch meats, soups, bread, cheeses, and pre-mixed salad bags.

During the past four weeks, I have replaced EXACTLY 25 meals my making my own. I got that by actually counting the meals I made myself, not by assuming anything.

So the total I've saved is (25 * $6.31) - $48.11 = $131.25. It comes out to $5.25 a meal.

As far as the time argument, I just make my meals in the small kitchen area at work. It takes no longer than five minutes at a time to make my meals, and I have a variety of hot and cold lunches.

Is it a cost effective use of my time? I think so. Even if it took 10 minutes to make each meal, i'm basically paying myself more than $30 an hour to make my own food.

So long story short - you can save a lot of money by making your own lunches. The trick is to take the money you save on food and put it directly towards savings or debt. Unless you do that, you're just spending the money somewhere.

[suze]

Pasta salad or tuna salad made on Sunday and eaten on Friday? If some deli tried to sell that to you you'd say no thanks pretty darn fast.

Still, making your lunch will save you money.

I have made my lunch and taken it to work for sixteen years. I don't eat out more than once every two to three weeks. Also, our mortgage is paid off.

I don't know if the two facts are related, having not used the index card system.

[commercial property loans]

to me, the best part of my day is sitting down, with no fellow employees, wife or kids, ect and just having a relaxing lunch. I just dont want to give that up.

[rhyno]

if i wasn't so lazy...

[Kenny]

Guys, this is so true.....I read this as a savings vehicle 25 years ago, and have done TWO things:

1. Drink water with my meals for 35 years now
2. Bag my lunch everyday, and for all long trips

Today, my house is paid off, my credits cards have no carry over balance, have more than $1M in assets, and have two teenage kids who college tuition is completely paid for (along with an equal amount for expenses while going to college).

Why? How?

Start small, and don't challenge any good idea. Stop the IMPULSE if you would like to say the same thing as I said before. REAP WHAT YOU SOW!!!!! I teach my kids this model 3x a week.

Thanks.

Kenny

[Walden]

I kinda feel like this is beating a dead horse, but really Dave? That list of what it takes to make a sandwich seems like the least efficient way to do it - maybe you're just trying to prove a point? 20-30 minutes to make a sandwich? Maybe if you start from square one every single time...

For us, the key to being able to pack lunches w/out it taking up a lot of time is to PLAN AHEAD:

Wash the produce and slice it all at once on Sunday night, put it in bags so it's ready to go.
Get out all your ingredients at once and make an assembly line - if you don't put lettuce and tomato directly onto your sandwich they will keep in the frige for a day or 2 (we put our "wet" ingredients into seperate ziploc bags and assemble them at work so our sammies are never soggy). That way you can make several days worth of lunches at a time.

Yes, cooking dinner does take time, but aren't you going to have to eat dinner anyways? Why not take a moment before hand to choose a meal that will yield leftovers, and take a moment after the fact to put those leftovers in a container? Doesn't take much time at all...

You get the point - there are tons of ways to cut down on lunch expenses and maybe it's not for everyone, but it's way more possible than you seem to think...

[MattC]

Not only do you save money by taking your lunch, but think of how many calories you save by not eating out. Portion control is a lot easier when you make it yourself.

[Pommy]

Great Tip.

I'm applying the Brown Bag Your Lunch idea to pay off my credit card sooner as the interest rate on my card is currently 3 times that of my mortgage.

[Ditech Home Loans]

For those who have a stable income, but lack the discipline to save, a 15 year fixed rate can at least provide a realistic goal to one day pay off the mortgage.

[Marcia]

I brown bag my lunch daily. My typical lunch costs $1 and is much healthier (lower in fat, sodium, higher in fruit, vegetables) than any lunch you eat out.

It takes about 15 mins to prep lunches. Our lunches are almost always leftovers. I cook 3-4 times per week. Sat and Sunday for sure, and one or two other nights during the week. It does get repetitive, but we are at least eating 3-4 different meals for lunch and dinner on a given week. Add the occasional PB&J or tuna sandwich if we run out of leftovers.

After dinner, I spend 15 mins gathering up fruit, leftovers, veggies, and packing them up for my spouse and myself.

Oh, and I have a job and a husband and a toddler. I just prioritize healthy frugal eating.

[SDNH]

I save more than $5 a day by not eating out more like $9-$10 a day... I used to eat Flame Broiler, it was around $6 and then like $3.75 for Starbucks... I am not making my own lunches but packing frozen food from trader joe's which is like $3 max. It would be cheaper if made my own lunch but i hate sandwiches.

[Jackie]

The cheapest way to go is home made sandwiches and they do not take 30 min to make. I don't use lettuce or olives or avocado; just 2 slices of bread and slap some meat and cheese and I'm done; no mayo. Maybe a few slices of onions. Trader Joe's meals are a good option but they cost around $3 each which is pricier than two slices of bread with some deli meat. Subway is even more expensive at usually $5 a sandwich.