Wednesday, January 19, 2011

The Economics Of Food

In a previous life, while still training martial arts and athletic training, (training myself not others) I was a stock broker working in the world of finance, investments, and banking. I have several certifications in fitness, and in finance/banking/investments I may have even more, including a series 7 and 66 licenses (whatever field I go into, I dive all in to learn as much as I can and that has always been the key to my success).

There's two ways to make a profit. You either make more money, or you cut more expenses. Either way your profit side is affected. Money is money, it doesn't matter how it gets there. Speaking with clients over the years I noticed a pattern. Money didn't get spent on shopping sprees as was the stereotype in the 80s and early 90s. Nor was it always going into expensive cars or lavish lifestyles. For the average American, I noticed a lot of their disposable income was going to food and drinks. As time went on, as Americans got bigger and bigger (and the foodie craze, online food reviews, blogging, etc took off) the food expenses went up and up.

But food is like weight gain. It's always in small increments so you don't notice. If you bought 200 dollar shoes, your spouse or parent may freak out because its abrupt or noticeable. But you only buy shoes like that maybe once a year, lets say even twice a year. That's still only 400 bucks. Now who would freak out if you spent 5 dollars a day on coffee? No one. But in one year that adds up to 1825!!! And I could make an argument that you do need good shoes, but you don't always need coffee. Income and expenditures is a yearly if not lifetime game, people focus too much on the day to day. It's all psychology and perception. I always wish people were more rational but that's an irrational want to have.

So when people came to me looking for advice, they of course never think it's all being blown on food. They just know they have no money at the end of the month and blame their wage (which is less in their control than expenses so why complain about the thing you control less? Whine about what you can control more). But when you do the math they are always shocked. Let me use two real life examples:

I have a female friend who works in the service industry as well as being a student. She always complains about not having money and not being able to pay off her debt. So I said it's probably because she eats out too much. Of course she denies it. Expect everyone to deny it for whatever reason. If someone tells you they only eat out 1-2 times a week, it's more like 4-5 times a week if not more and if you include take out and prepackaged food expect to increase that range again. She blames being a poor student and not enough income. They will always blame that.

So I told her to do the math and add it up. She grosses 2500. She nets 2000 (due to most of it being in tips). After bills (including rent, utilities, insurance, gas, phone, car) she still had 1000 left. Her tuition was paid for by student aid and her rent is low because she lives with a roommate. So I asked her where all that money went? She didn't know but now she was also curious but wasn't willing to bite the bullet. So I told her to write down every time she goes out and how much she spends: including gratuity and even going out for drinks or dessert or even when someone else pays and you only leave tip. Also parking, valet, price for take out foods, ordering food, prepackaged foot, gratuity for take out, just all the costs of eating out.

She realized she went out to eat on average twice a day (she originally told me she only went out to eat twice a week). It added up to being around 700-800 dollars a month not including money on groceries. No wonder she couldn't pay off her debt and was not saving. Let's just say after realizing this, in two months she paid off all her debt.

My second example is my former roommate. He always overdrew his account and was constantly late on rent. He blamed of course his income and got very defensive if you asked him about it. We also happened to work in the same office (of course doing different things). So I spent a lot of time with the guy and so for one month I logged his spending habits. He usually skipped breakfast. He always ate out for lunch and picked up dinner on the way home. That's on weekdays. On weekends he ate out even more. He spent on average 15 dollars a day on food on weekdays, on weekends it was 20. He also spent around 25 dollars on groceries a week (usually on soda, cereal, and snacks). So about 140 (and this is just a low ball range) a week on food, and this was a guy desperately broke who never wanted to hang out or go watch movies or anything because he said he was too broke and made too little. He was also in a lot of debt. In 4 weeks he spent 560 but because of his debt, all his extra money was supposed to go into paying it off but usually he could barely pay the minimum (which didn't include interest). So he didn't even have 560 in disposable income yet he was spending that on food. Not only was he going broke and heavily into debt, but he was also becoming morbidly obese. He went from 170 to 260 in 6 months. A big change was he used to live with his parents who always fed him, now he had to handle food on his own and boy did he handle it.

Even from my own experiments with weight gain, it is expensive to gain weight. As I put on pounds I noticed the difference each week in my food and grocery bills. Food, drinks, and everything associated with it adds up, don't kid yourself. It is expensive to gain weight. It is even more expensive to be overweight and maintain that size, let alone increase it.

Now on top of all that, if you are obese, imagine how much money you must spend to try to lose that weight. That's the expensive thing about being over-fat. You spend a lot getting fat, you spend even more trying to lose it, especially if you keep failing at it.

A friend looked at this giant horse of a Great Dane the other day. He commented, man it must be expensive to feed something that big. The same rule applies for humans.

But if you do lose the weight, and you keep it off it will eventually add dividends to your pocket and health (like any investment). This is a guarantee. The savings on just preventing future medical expenses alone is worth it. People say eating healthy is expensive. I ask how long their outlook is? Is it a daily outlook or a yearly or lifetime? Because in the long run they will save. They may also be confused with the math. Yes weekly groceries may go up, but weekly eating out expenses will go down.

Obesity is no longer just a social issue, it is also a economic one.

About the Author:

Sam Y. is a Personal Trainer, Coach, Performane Enhancement Specialist, Corrective Enhancement Specialist, and holds multiple certifications. He is also an avid Martial Artist, training in Brazilian Jiu Jitsu, Kickboxing, Boxing, and MMA. He is also the author of the popular fitness blog All Out Effort as well as the popular martial arts blog Inner BJJ. You can find him in the Los Angeles area personal training his clients, or at home annoying his wife, or on Facebook at his personal fitness page.
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