Episode: 315 - The Real Cost of Convenience: How Small Savings Can Lead to Big Financial Gains
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In today's fast-paced world, nearly everything is designed to make life easier. Fast food, subscription services, delivery apps, and buy now pay later options are all at our fingertips. However, this convenience often comes at a cost. If we're not careful, it can easily disrupt our budgets and keep us trapped in debt.
Understanding the Cost of Convenience
Consider how much of your spending is tied to making things easier in life. From fast food and meal delivery to grocery pickup, streaming services, subscription boxes, and Amazon Prime, these conveniences save us time and effort. Yet, choosing convenience often means paying a premium for it, and these costs add up quickly.
Take food delivery, for example. Apps like DoorDash or UberEats don't only charge you for the meal itself but also include service fees, delivery fees, and tips for the driver. A meal at a fast food restaurant may cost around $12 if you pick it up, but ordering the same meal for delivery can jump to over $20 with extra charges. Making this choice twice a week can mean spending an extra $64 a month or $768 a year just for the convenience of delivery.
In contrast, preparing food at home is significantly more economical. A simple homemade meal, like grilled chicken, rice, and veggies, can cost as little as $3 to $4 per serving when buying groceries in bulk. Even if you go all out with a more elaborate dish, you're likely still spending less than half of what you'd pay for delivery. Over a year, swapping takeout for homemade meals even a few times a week could save thousands.
Other Common Convenience Expenses
Apart from food delivery, other convenience purchases can also drain your finances without you realizing it. Buying a soda from a gas station can cost around $2.50 to $3 per bottle, while buying the same at a grocery store would typically be less than half that price. Regularly opting for gas station purchases can lead to spending hundreds more a year than necessary.
The same principle applies to snacks from vending machines, which are often twice the price compared to grocery store bulk purchases. Similarly, cafeteria meals at work can cost much more than brown-bagging your own lunch, potentially saving you up to $2,500 annually.
One of the most notable everyday expenses is coffee. A medium-sized coffee at Starbucks might cost around $5, translating to $25 a week or $1,300 annually if purchased daily. Making your coffee at home can bring your expense down to about 50 cents per cup, allowing you to save over $1,000 a year just by skipping your daily coffee shop run.
Why Small Changes Matter
These small financial decisions can make a significant difference over time. According to Darren Hardy's book "The Compound Effect," small, smart choices plus consistency plus time equals a radical difference. For instance, if you save $1,300 annually by making coffee at home and invest that money with an average 8% return, it can grow to $19,000 in 10 years, $64,000 in 20 years, and an incredible $194,000 in 30 years.
Now, imagine stacking these savings by also cutting out food delivery, gas station stops, workplace cafeteria meals, and vending machines. By finding ways to save and invest $2,500 annually, you could accumulate $370,000 over 30 years, thanks to these small, intentional changes.
Taking Control of Your Financial Future
While enjoying convenience isn’t wrong, when dealing with debt and financial stress, every dollar matters. The more you control these expenses, the more control you gain over your financial future. By redirecting these savings toward paying off debt or investing in your future, you make decisions that will benefit you for years to come.
Explore your budget and expenses, identify areas of convenience you can cut back, and start putting that money to work for you. Simplifying these expenses is not only about saving money but also about gaining financial independence and ensuring a secure future.
Resources Mentioned
The Totally Awesome Debt Freedom Planner https://www.debtfreedad.com/planner
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Transcript
Brad Nelson:
Hey guys. So today we are diving into the cost of convenience. Now. We live in a world where nearly everything is designed to make life easier you think about fast food, subscription services, delivery apps, buy now, pay later options. But convenience always comes at a cost and if we're not careful, it can wreck our budgets and keep us trapped in debt. Hey guys, I'm Brett Nelson, founder of Debt Free Dad. I paid off about $45,000 of debt. I've been debt free now for more than 11 years and I've also helped thousands of other people save and pay off tens of millions of dollars with the work that we do here at Debt Free Dad.
Brad Nelson:
Now, guys, after listening to this episode, if you're someone who is ready to take things to the next level, you're ready to break free from living paycheck to paycheck. You want to reduce financial stress. You want to build your savings and finally pay off debt for good, but you're maybe not quite sure where to get started. We've created some awesome resources here at Debt Free Debt to help you get there, and I'm going to be sharing some details about how you can get started with those later on in today's episode. Now, guys, think about how much of our spending is tied to making things easier in life Fast food, meal delivery, grocery, grocery pickup, even right Streaming services, car washes, subscription boxes, amazon Prime it's all designed to save us time and effort. And look, I get it. We're all busy. I'm busy, single dad of two, me and my partner. Between the two of us, we got five kids. But here's the thing Every time we choose convenience, you're also paying a premium for it, and those costs can add up really, really fast.
Brad Nelson:
Let's take on food delivery, for example. Apps like DoorDash or Uber Eats. You're not just paying for the food, you're paying for service fees, delivery fees and tipping the driver, and a typical meal at a fast food casual restaurant might cost maybe 12 bucks if you're lucky, depending on where you live right Now. If you go pick it up yourself, it'll cost you that. Now, if you order that same meal for delivery, it can easily jump to $20 plus after all the extra charges. Believe me, I know my son orders DoorDash. I'm like what so if you do that just twice a week and you're spending an extra $64 a month or $768 a year just for the convenience of not picking it up yourself? Crazy Now if you compare that to making food at home a homemade meal something simple, let's say grilled chicken, rice and veggies costs about $3 to $4 per serving. When you buy groceries in bulk and again depends on the area I get it we're just using averages. But even if you go all out and make something fancy, you're still probably spending less than half of what you would pay for delivery. Now, over the course of the year, switching from things like takeout to homemade meals just a few times a week could save you thousands of dollars a year. And let's be real, half the time takeout isn't even all that great. I end up saying most of the time like I could have done way better making this food myself and I could have saved a ton of money. Now, guys, it's not just food delivery either. It's also the little convenience purchases that we tend not to even think about or consider.
Brad Nelson:
Let's pick on gas station or convenience store, especially things like soda. Let's pick on soda versus buying soda at the grocery store. One of the easiest ways to waste money is by grabbing a bottle of soda from a gas station or a convenience store. A 20 ounce bottle of soda at a gas station costs about $2.50 to $3. Again, depending on the brand and the location and that same bottle at the grocery store is usually around a buck 50, sometimes even less if bought in a multi-pack or on sale. Now if you buy one gas station soda per workday, that comes out to $12.50 to $15 per week, or $650 to $780 per year on just soda. Now if you instead buy a six-pack of, say, 6.9-ounce bottles from the grocery store, you'll pay around five bucks for the entire pack, bringing the price per bottle down to about 83 cents. So over the course of the year that simple switch could cut your soda costs in half, saving you three to $400 per year. And again, that's hundreds of dollars saved just by planning ahead and by making one small, simple switch Up.
Brad Nelson:
Next let's pick on things like vending machines. Versus again buying snacks and planning ahead at the grocery store, a vending machine is just another terrible deal, but again you're paying for convenience. Remember, a bag of chips or a candy bar from a vending machine costs about $1.50 to $2, sometimes even more based on some of the vending machines I've seen. But that same snack in a multi-pack from the grocery store it can cost $0.50 or less per serving. Huge savings right Now. If you grab one vending machine snack per workday, that's about $10 a week, or $500 a year. Just on snacks, you guys. Now if you bought those same snacks in bulk from the grocery store, you would save over $300 a year. Awesome savings Up.
Brad Nelson:
Next, if you've got a cafeteria where you work, we're going to pick on that one. Next. Cafeteria meals can cost $7 to $12 or more per day. Now, if you eat at the cafeteria five days a week, that's $35 to $60 per week, or $1,800 to $3,000 per year. Now compare that to, say, brown bagging it and bringing your own lunch right. Making a sandwich, some fruit, a snack at home can cost on average $2 to $3 per meal. Now, over a week, that's $10 to $15, or $500 to $750 per year, saving you up to $2,500 a year just by bringing your lunch.
Brad Nelson:
Now, guys, you're going to hate me on this one, I know Well, let's talk about that. Coffee, right? The silent budget killer. Now a grande. We're going to pick out Starbucks right Now. I don't even understand some of these terms, but grande, I guess, is the term for medium at Starbucks, right, I don't go to Starbucks very much. Sorry, starbucks, but that costs on average around five bucks. Now, if you buy one every work day, that's $25 a week or $1,300 a year, guys.
Brad Nelson:
On coffee Now, if you compare that to, say, making coffee at home, a bag of coffee beans that costs on average 10 to 15 bucks can make about 30 to 40 cups of coffee, bringing your cost per cup down to around 50 cents or less. I mean heck. Even if you add in the cream, the sugar and all those little flavoring syrups that you love, you're still probably spending less than a dollar per cup. And that means, if you add in the cream, the sugar and all those little flavoring syrups that you love, you're still probably spending less than a dollar per cup. And that means if you swapped out your daily coffee shop run for home brewed coffee, you could easily save yourself over $1,000 per year. All right, guys. So why does all this matter? Why do all these small little changes matter?
Brad Nelson:
I want to share a quote from you from Darren Hardy's book the Compound Effect, which, by the way, is one of my most favorite books I've ever read. If you haven't read it, check it out, Because this quote perfectly sums up why these small financial decisions can make a difference. He says this small, smart choices plus consistency plus time equals radical difference. Distancy plus time equals radical difference. Let me give you an example.
Brad Nelson:
Let's say you decide to cut out one major convenience expense. Let's go with your daily coffee shop run and save yourself $1,300 a year. So instead of letting that money just sit in your bank, where it probably will get spent right, we're going to invest it. And if you invest that $1,300 per year into an index fund with an eight percent average return, you guys, in 10 years that thirteen hundred dollars per year would grow to nineteen thousand dollars, and in 20 years it's over sixty four thousand dollars. And in 30 years it's a whopping one hundred and ninety four thousand dollars just for making coffee at home instead of buying it. You guys, if you're still buying your coffee out every single day, I hope you love your coffee because it's costing you 200 grand over the next 30 years.
Brad Nelson:
Now again, imagine stacking those savings by also cutting out food delivery, gas station stops, workplace cafeteria meals and vending machines or any of these other convenience things that you have in your life. Now, if you find a way to save and invest, say, let's say $2,500 a year, in 30 years, guys, that's $370,000. All from small, intentional changes. That's the compound effect in action Tiny choices today, done consistently, create these massive results over time. Now look you guys, I'm not saying you should never enjoy convenience, but when you're in debt, you're struggling with money. You got to think differently, and every dollar matters. The more you take control of these expenses, the more control you gain over your entire financial future. And when you put those savings to work for you whether that's paying off debt or investing in your future you're making decisions that will serve you for years to come. So, guys, go through your budgets, go through your expenses, find these areas of convenience that are easy to cut out and start putting this money to work for you.
Brad Nelson:
Now listen, if you're ready to break free from living paycheck to paycheck which, if you're listening, I hope you are you want to reduce financial stress. You want to build savings. You want to finally pay off debt for good, but you're not sure where to get started. Don't worry, we've got you covered here at Debt Free Dad, simplify my Money is sent each Sunday to your email. We make it easy and Simplify my Money. It's your step-by-step roadmap to better financial control, and you're also going to learn easy to follow strategies to manage your money effectively. You're going to get stress-free money decisions that will help you simplify your financial life with proven tips that actually work. You're also going to gain the tools and the confidence to tackle your financial goals head on. You can sign up for Simplify my Money by clicking the link at the top of the show notes. Thanks for joining us on today's show and we will see you guys on the next episode.
