How Does Your Food Budget Measure Up?

Untamed food spending habits can push out early retirement plans by years, not only by stopping you from turning those dollars into hard-working interest-earning “employees” in your investments, but also by inflating your on-going cost of living.

Of course, none of us want to live on legumes and rice alone, it wouldn’t be a balanced diet and we’d be bored and miserable. The whole idea of Early Retirement is to free us to enjoy our lives, not shorten our lifespans or reduce our enjoyment. But let’s work out how much those takeaways, snacks, packet meals and out-of-season fruit and veges could be costing in years spent in the work force and see if anyone is inspired to be more badass about their food purchases.
(If you’re confused by my use of the term ‘badass’, check out this link.)

A Toy Example

Lisa works hard and rewards herself with some treats. Lunches from the café downstairs from work, a meal out at a restaurant most weeks, the nice cuts of meat. She spends $200/week on food, she’ll need to save $260,000 just to cover these food costs when she’s retired.
($200 x 52 weeks / 0.04 to find the invested amount that would return $200/week)*

Cassie works hard and buys the odd treat, but she has cultivated a few frugal habits that have become second nature. She cooks a big slow-cooker meal on Sunday to take for work lunches, and stops by the local greengrocer for budget in-season produce. She spends $50/week on food, she’ll only need $65,000 in her nest egg for food expenses.*

If both are saving an incredible $30,000/year, Lisa will be in the workforce over 6 years longer than Cassie!

To put the same point more controversially, my $4/week avocado habit adds $5200 to my retirement savings target. I think I’m about to start buying avos only when they’re in season and on sale!

How much do you need to save to cover your food costs while retired, based on how you eat now?
To work out how much you need to save to fund an expense you’ll have in retirement, multiply the weekly total by 1300. (Math details: multiply by 52 to get the annual expense, divide by 0.04 to find how much you’ll need to invest to get that amount as a 4% return on your investment.)

How many years earlier could you retire if you started some delicious-and-frugal eating habits?
You can check how long it will take you to save a goal amount with the savings calculator.

An Objection

You might say  “Konnifer, I object to your reasoning: I know I spend up large now, but that’s because I’m working long hours, really pushing myself to save, I need the convenience. My food will be cheaper when I’m retired.”
That’s probably true for many of us. However, personally, I don’t want to plan for my retirement to be a step down from my current lifestyle. I don’t want to retire and think “Well that’s over, now I have to give up some luxuries.”
If I do reduce costs in my retirement (maybe I have more time to garden and cook fresh?) then that’s a bonus, it’ll free up some money to spend on more hobbies. (Fancy automatic watering system? Shiny new cookware?)
I’d rather retire with the mindset “This is a pretty sweet lifestyle, and I can keep it all even if I stop working.” I don’t want to cut my spending until I’m miserable, but I do want to experiment with my habits and see which ones are really contributing to my happiness.

The University of Otago Food Cost Study

Here’s an interesting way to see if you’re at the top of your frugal game. Use the graph below to see how your weekly shop compares to a basic, moderate, or liberal (read “indulgent”) diet in the University of Otago Food Cost Survey 2016. The basic level is the minimum the researchers thought it possible to spend without “increasing the risk of not getting all the necessary nutrients.”**


This graph shows the results of the Otago Food Cost Survey 2016 for adult Aucklanders. It includes enough for a healthy range and amount of food for all a week’s meals, but does not include any take-away and restaurant food, ready-meals or household and personal cleaning items.
See the full survey for a list of included foods and methodology, results for Wellington, Christchurch or Dunedin, and costs for adolescents and 10, five, four and one year olds. It’s an easy, well-presented and fascinating read!

Are most of us living at a ‘basic’ level as per the survey? Or is it normal, even as a frugal saver type, to spend a little more than the bare minimum?

Sharing My Numbers

I live in a 2-adult household. We spend $70/week on groceries, he spends $20/week on treats and takeaways, and I spend a whopping $30/week on takeaways. I’m not including non-food items like cleaning products, or alcohol. So overall, we spend $120/week on food. That’s $60/adult/week.

I’m happy with our work-week spend – we cook plenty of treats but somehow it never seems to blow the budget. My most indulgent regular expense is a ~$10 “I’m hangry and must buy takeout now” episode while running errands during the weekend. Funding that requires an extra $13,000 in my retirement fund – nearly 6 months extra in the workforce at my current savings rate. That’s something I’ll consider next time I want to dash out the door on a Saturday without eating breakfast. I’ll probably still do it occasionally 😉

How about you? Let us know in the comments. If possible, tell us how many people in your household and include only your food costs so we’re all looking at the same thing.

* I’m assuming a “safe” 4% withdrawal rate after retirement, See Mr Money Mustache’s article for details
** page 2.

Millionaire Habits

I read this post from Budgets Are Sexy recently and I thought the habits of millionaires that were outlined applied to us Kiwis as well.

8% shopped at Goodwill stores

I just bought 2 nice jackets at the Dove hospice shop.

20% used coupons

I use coupons when I can find them.  Especially if I’m buying stuff online – I always do an online search for discount codes for the retailer.

64% said they lived in a modest, middle-class home

Hmm, I live with my in-laws in a very big house.  Think I fail on this one.

28% mowed their own lawns to save money

Yep, don’t pay anyone to mow my lawn and don’t think I ever will.

44% only purchased used cars

I’ve never bought a new car in my life although my last car was only 3 months old – I still got close to 20% off the sticker price so I was happy.

19% managed their investments themselves – they do not use financial advisors in order to save money


60% said they were frugal with their money


I’m definitely improving on this one.  My wife has always been super frugal and I’ve been the spender but now it is very rare that I will buy something that I don’t need.

81% used credit cards that offered reward dollars — this way they could get something for free

I definitely do this.  I look with envy at the US credit card hackers as we have very few opportunities for travel hacking etc. in NZ.

And lastly, 41% spent less than $3,000 on their annual vacation

I’m not sure about this one.  Is it per person?  Then I’m ok.  If it is for the whole family then I probably spend more.

How about you folks?

Hello folks who want to set themselves free!

This blog is set up to be a community hub where Kiwis (and the odd Aussie) of all means can learn tips and tricks to becoming financially independent so that you no longer have to work for money.

If you’d like to contribute (via blog posts, links or what have you) use the contact form below and I’ll add you in.