Forget Lattes – The Cheeseburger Factor is Biggest Threat to Wealth

I did something last Friday I haven’t done in a very long time. I visited a fast food establishment for lunch. Yes, I have been out to eat a couple times in the last few months, but not for lunch, and not fast food. I was surprised at how expensive the so-called “value meals” were. I frequently see people looped around drive-thru windows on their lunch hour buying $6-$7 “value” meals. It got me to thinking – just how much wealth are we chewing away on our lunch hour?

The costs of fast food. These days the cost of everything seems to be going up, and few product costs are inflating faster than food. With the cost of milk, meats, eggs, and even bread rising across the country, fast food chains are passing the associated increases along to customers. As the price of eating out increases, so does the opportunity costs we pay by not pocketing that money and brown-bagging a lunch made from home.

Costs per month. The brilliance behind “the latte factor,” made famous by author David Bach, was that it got consumers to think long term. Carrying daily costs out to a weekly, monthly and yearly figure was a wake-up call to those who considered a $3 expense to have a minimal impact on their overall financial life. Take fast food for example. A $6 combo meal (which typically includes a drink, sandwich and side order of fries or salad) eaten every day of the five-day workweek will cost customers $30 a week. That $30 a week, times four weeks, adds $120 a month to your food budget.

Costs per year. Continuing our fast food example, that $120 monthly fast food bill becomes a $1,440 annualized expense. Staggering, isn’t it? Imagine the things we could do with $1,400! You could open a Roth IRA, start a 529 plan for your kids, take a couple courses at a local college to further your career, start an emergency fund, or take a paid-for vacation. All for the price of a $6 cheeseburger, french fries and soda. Next time I’m craving a cheeseburger, I think I’ll just make my own from home.

I picked on fast food establishments for purposes of this example, but they are not the only place we throw away hundreds of dollars every year. Pack-a-day smokers spend nearly the same amount to fund their habit, as do beer-drinkers and wine consumers. My vice used to be bottled soft drinks from my old company’s break room. I probably bought a drink or two a day for years over the time I worked there, at $1.00 a pop! All the while I complained about a $500 minimum investment required by a mutual fund I was interested in – where was I going to get $500? I should have started with the vending machine.


  1. My husband and I were just talking about this last night. I used to take the kids to McDonalds for lunch about twice a month. You know, to play and whatnot. But it’s sooo expensive. It costs me about $15 to take myself and two kids there. Now we go out for pizza as a treat and it costs less than half as much, and really everyone enjoys it more.

  2. I remember when fast food was affordable. I miss the days when whoppers would go on sale $.99 and big macs used to be like $1.39. I must admit I spent more money on fast food when I was working. Everyday at lunch I ate fast food. There was a Taco Bell, McDonalds, Dairy Queen, and Burger King within 1 minute of my job. When I think back of all the money I wasted, I just have to shake my head. It was so not worth it. It is almost like I was working for nothing!!! Buying fries, soda, burgers and the fixings at Aldi’s beat the cost of eating at McDonald’s any day.

  3. HI! I just went over my money from March and saw I spent about $20 on McDonalds & Burger King (for 2 trips for 3 people each trip) and about $10 at Dunkin Doughnuts and $8 at Wawa and $17 at Cost Cutters all on junk food. These were not budgeted for. I could have used this money to sponser another child through Compassion or bought more healthy food at home or saved for our future (although I have 3 months in Contingency Fund, I have nothing saved for retirement or my kid’s college funds-being a single mom even the contingency fund was tough.) But if I saved $5 a week for retirement it would be better than nothing and certaintly better for my health. I found a way to buy the junk food, I could find a way to save for future too. Thanks for pointing that out.

  4. The only issue I have with your argument is that the $1,440 figure only comes about if you skip lunch entirely for the whole year. That’s not to say that you can’t save a bunch of money by bringing lunch from home (probably close to 50% of that amount), but I think it would be difficult to realize the full $1,440 savings.

    Personally, I started with skipping the soda machine and drinking water. But if I do need the carbonation, I keep a 12-pack of my favorite soft drink (which I purchased when it was on sale) in my desk. They average less than 25-cents compared to the $1.00 from the machine.

  5. @Eric: You make an excellent point. I realize the actual savings are probably lower after figuring in costs to consume foods brought from home. My assumption was that the lunches from home were already coming out of your existing food budget, and while your overall budget may increase some, my guess is we probably waste nearly as much food as we take to lunch over the course of a year. By using up every last left-over we are maximizing that food budget and keeping the cost-per-meal low. The “real” annualized savings are probably closer to $900-$1000. Thanks for your comments!

    @Rebecca: By keeping tabs on where your money is going you are well on your way to plugging these fast food leaks in your budget. Thanks for sharing your story.

  6. Everyone should watch Morgan Spurlock’s (sp?) “Super Size Me” documentary. I watched it on DVD a few years ago, and I haven’t eaten fast food since. True story. I bring my lunch to work every day, bring my own home brewed coffee, and have been riding the bus or my bicycle to work for the last 4 years. I have not missed eating out, Starbucks coffee, or driving a car. There is alot of truth to the Latte factor and the fast food factor as you write above. I put a pencil to it a few months ago and I figured round about I’ve saved over $30,000 over the past 4 years with these 3 things.

  7. Great point! We actually had McDonald’s the other day and I couldn’t believe how expensive it was (and then found it was cold, unappetizing, and they forgot part of our order). I am enjoying their $.99 sodas right now as a treat though. I am not a big fast food eater, but I am sucker for a good Diet Coke.

    Great advice!

  8. I agree with DougL – everyone should watch Super Size Me. The cheeseburger (and fast food in general) is also the biggest threat to wealth b/c you can’t enjoy your money if you’re dead from a heart attack!

  9. I read this post in the morning and my mouth was watering all morning long due to the picture (I’ve seen Super Size Me, but it had the opposite effect on me, it made me want to eat at McD’s even more). I’m a major fast food junkie, but rarely indulge due to the cost. There are actually some decent meals you have for less than $3 but that’s another subject.

    Anyways, I had an errand to run downtown today, during lunch time. I passed McDonald’s and remembered this post, and the mouthwatering picture, so I went for it. For $6.91 (including tax) I got the Quarter Pounder with Cheese, Large Fries, and Large Strawberry Shake, which is just a ridiculous amount of food. Amazingly I was able to finish it all, and it filled me up enough that I definitely don’t have appetite for dinner tonight, and probably not breakfast tomorrow. Three meals for the price of one!

    See the impact your blog is having? 🙂

    I bring my lunch to work pretty much every day, and go out with co-workers maybe once a week. Today was a very rare exception, in general going out solo for fast food is not smart (due to cost), but going in group (normally to nicer restaurant) is worth it to socialize.

    Actually, the big thing which bothers me about going out to lunch is DRIVING. Unless you have places next to your office, you may well be paying $2 or more in gas just to get there and back, on top of the $6-$7 for the meal.

  10. I was just thinking about my job 10 years ago, when I was making a whopping $7/hr. A value meal was already north of $5. You still had to get in your car to buy it. I was spending 15% of my income just on lunch!

    Peer pressure is a factor too. Your buddies at work all want to go out for lunch. Your leftover spaghetti looks a lot less appealing now.

    I’ve also been in less-than-ideal working situations where I felt I needed to get away for that hour in the middle of the day. This is another hidden cost of job dissatisfaction.

  11. I’ll chime in here. Yes, it’s too expensive to eat out every day–but I’ll tell you, when I was commuting, plus working 9-10 hours a day, my time was very limited. So eating out frequently was my trade-off (plus it helped me to network with office big-whigs = face time = promotions).

    That said, the fast food route is NOT the way to go. Better to go to an ethnic eatery if there is one nearby. The special at my favorite thai place: $6–same price as an ‘extra value meal’ and significantly healthier.

    But if you can bring lunch, do, at least part of the week. If you need to get away from the office, have a picnic in the car. I did that often, followed by a 15-minute cat nap. Now THAT’s what I call heaven.

  12. My wife and I have banned fast food from our car, home, mouths, and wallets. Our reason: mainly the service. I got tired of eating unhealthy expensive food while I was still fuming at the idiot who couldn’t understand what “only catchup” meant.