Thursday, July 19, 2018

12 Expenses Successful People Don't Waste Time or Money On

Aside from the occasional indulgence, most financially successful people keep a close eye on their budgets and bank balances.

People have struck it rich by launching social media startups, inspiring wildly successful crowdfunding campaigns and writing wizard-themed best-selling books. But most successful people have far more boring backstories of accumulating wealth through savvy spending and smart saving strategies.

Aside from the occasional indulgence, most financially successful people keep a close eye on their budgets and bank balances. They rarely waste money on goods and services that don't offer much in return.

See below for which items to cut from your budget and get expert tips on how to manage your money better.

(By Charlene Oldham)

Lottery tickets

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If you truly want to strike it rich, don't play the lottery. This is a sure way to burn money fast -- and rich habits simply don't include a weekly stop at the convenience store lotto line. Your chance of winning the Powerball grand prize is about one in 292 million. Those odds are not in your favor.

Take a look at the math: A Powerball ticket costs $2. That might not seem like much, but if you play twice a week for a year -- and buy two tickets each time -- you'll have flushed more than $400 down the drain.

Don't waste your hard-earned money on chance when you can put it toward wealth-building goals, such as retirement or college tuition. Invest the same $416 each year, getting just a 5 percent return, and over 30 years you'll have $28,055.

Bank fees

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If you're always paying bank fees, you might as well just flush your dollar bills down the toilet. Successful, rich people are much too money savvy to waste precious dollars on fees that can often be avoided.

Like many businesses, banks charge fees for their services. For instance, many banks require monthly maintenance fees for certain accounts. And America's three largest banks -- JPMorgan Chase, Bank of America and Wells Fargo -- earned more than $6.4 billion in 2016 from ATM and overdraft fees alone, according to a CNNMoney analysis.

The easiest way to avoid these fees? Play by the banks' rules. For example, Bank of America's Core Checking account charges a $12 monthly fee. But you can get the fee waived if you meet one of the several requirements, such as maintaining a specific average daily balance or arranging at least one direct deposit that exceeds a set minimum.

Interest on credit cards

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A credit card can be similar to eating from a tub of ice cream. You might feel a little guilty for overindulging afterward, but it's just too convenient. Sure, it's easy to swipe the plastic -- but you won't catch wealthy people accruing high credit card interest. They know it's a waste of money.

To avoid accruing interest, only buy what you know you can pay for when your statement comes. If you are carrying a balance, transfer or consolidate your debt to a credit card with a zero percent introductory APR. Just be sure to pay off your balance before the promotional period ends.

Inflated interest rates

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Americans' average FICO score hit 700 as of April 2017, its highest mark since Fair Isaac Corporation, which created the credit risk scoring system, started tracking statistics. That's a money-saving milestone since a clean credit record gives conscientious consumers more than just bragging rights.

Credit scores play a leading role in determining your interest rate for auto loans, mortgages and more. Just by having a higher credit score, you can save hundreds or thousands of dollars in interest over the life of a loan. People with substandard scores, however, might not be able to land loans at all.

Financially successful people keep their credit reports pristine by paying bills on time, keeping debt levels low and fixing mistakes on their credit reports. And if you already have a decent credit history, but carry a balance on some credit card accounts, consider calling card issuers to request a higher credit limit. A higher limit will reduce your credit utilization rate -- the percentage of available credit you are using -- and could boost your score.

While you're on the phone, it can't hurt to ask for a rate reduction. The lower your interest rate, the faster you can blast balances.

Late fees

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Successful people don't get saddled with late fees that can chip away at their bank balances and credit scores. In 2016, credit card companies raked in $12 billion in penalty payments, including late fees, according to R.K. Hammer data as reported by The Motley Fool. Paying late can even cost people who pay off their balances every month. Just about every other monthly bill carries its own procrastination penalty as well.

Savvy spenders avoid late fees by automating everything. If you've ever asked yourself, "How can I get rich?" -- automating your payments so you don't get hit with high fees and penalty rates can help you hold on to more of your money.

Extended warranties

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Somewhere along the line -- say, if you bought a new 4K TV -- you were probably asked, "Would you like to purchase an extended warranty?" But according to Consumer Reports, a financially successful person has a simple answer to that question: "no."

Although people want the most value from purchased products, generally, extended warranties don't give you more bang for your buck. In fact, according to Consumer Reports, retailers keep 50 percent or more of what they charge for extended warranties. So extended warranties just aren't one of the things rich people buy.

So, what do rich people do? Their research -- and you should follow their lead. For instance, check your manufacturer's warranty before saying yes to an extended warranty. You might have more coverage than you initially thought.

Also, compare the cost of potential repairs versus the extended warranty. You'd typically be better off putting aside the money you'd spend on a souped-up warranty to cover future repairs yourself, according to Consumer Reports. So the next time a salesperson tries to sell you on that extended warranty, shut the conversation down fast.

Impulse buys

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Have you gone into a store intending to purchase one thing but come out with a cart full of stuff? Maybe it was BOGO at the grocery store, so you snagged a few extra items. Or perhaps it was a flash sale on your favorite clothing website and you bought designer shoes. Whatever the case might be, this isn't a shopping practice for the wealthy.

Successful people are planners, and impulse purchases tend not to mesh with this quality. If you want to emulate their behavior, be much more cautious with your money, said Leslie Tayne, author of Life and Debt. Tayne suggested going cash-only to curb your spending.

"Use the envelope system, bringing with you only a predetermined amount of money to spend at each store," she said. "This approach will help you stay on budget and curb any habits you might ordinarily have in impulse buying and overspending."

Low-interest savings accounts

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Do you like stashing cash in savings because it's secure and you can pull out money on a whim? Would you like to see more than pennies on your interest? If you answered "yes" to both, change your strategy to truly emulate a financial mogul.

Regular savings accounts don't earn a lot of interest. The national savings account rate is a meager 0.07 percent, as of June 25, 2018 -- a stark contrast from what you can expect from a high-yield savings account.

You can find high-yield savings accounts by looking beyond traditional brick-and-mortar banks. Online banks, for example, frequently offer the highest return rates because they have no or lower overhead costs. Credit unions also offer attractive rates. In fact, a GOBankingRates survey found the best savings account rates in the country tend to be at credit unions, where some rates top 7 percent APY.

If you're looking to boost your wealth by making wise decisions with money, explore your online savings account options. Furthermore, automating works as a smart savings strategy. David Bach, the author of The Automatic Millionaire, suggested diverting dollars directly to your high-interest savings account before you even see it. That way, you won't have the opportunity to second-guess or sabotage your savings plan.

High-end brands
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You might see a lot of designer labels on the red carpet, but many rich people don't choose designer labels for every purchase. Though they have the funds to splurge at luxury retailers, they understand that doesn't always mean they should.

"Financially successful people comparison shop and understand the importance of both quality and cost," said Tayne. "They may go for a cheaper item or buy the higher quality item from a cheaper store in order to make the wisest financial purchase."

What do rich people buy? The answer can depend on the day. For example, former first lady Michelle Obama donned her share of designer duds. But she was also seen boarding Air Force One and making press appearances while wearing dresses from Target during her husband's presidential tenure.

So, if you want to emulate the habits of rich people, stop and ask yourself if that $200 pair of designer jeans is really worth the investment -- or will $30 discount store denim do the trick? Always shop wisely, and keep your budget and financial goals in mind.

Bad real estate
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Billionaire investor Warren Buffett still lives in the Omaha, Neb., house he bought for $31,500 in 1958. He shelled out significantly more for his vacation getaway in Laguna Beach, Calif., purchasing the 3,588-square-foot home for $150,000 in 1971. He put that property on the market for $11 million in 2017, meaning he could turn a tidy $10.85 million profit if he gets his asking price.

Author and entrepreneur Tony Robbins advised millennials to look at property as an income engine rather than as a place to put down roots. The truth is few homeowners will be as lucky as Warren Buffett or hang on to homes for as long, and there's no guarantee a home's value will appreciate at all.

Robbins takes his own advice when it comes to his Fiji resort. Not only is the Namale Resort and Spa one of the millionaire's favorite places to vacation, it has the bank account-building bonus of commanding between $1,244 and $2,500 per night for all-inclusive accommodations for two.

Extravagant inheritances

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Financially successful families are often in a position to give the younger generation a helping hand when it comes to expenses like tuition and housing. According to a 2017 survey from online financial advisor Personal Capital, 18 percent of affluent parents -- those in households with investable assets of $500,000 or more -- planned to completely cover their children's rent, while 14 percent planned to pay for their kids' homes.

But, for the most part, supporting their kids for life is just not one of the things rich people do. Many millionaires -- and billionaires -- have publicly announced plans to leave a big bundle to charitable causes rather than keeping it all in the family.

For example, Bill Gates has said he plans to donate the bulk of his billions to the Bill and Melinda Gates Foundation rather than leaving it to his three children. And Facebook founder Mark Zuckerberg and his wife Priscilla Chan, who have two daughters, have pledged to donate 99 percent of their Facebook shares to charitable causes during their lifetimes.

Tons of TV channels and video games
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Financially successful people spend significantly less time glued to screens of all kinds than their lower-income peers. That's especially true when it comes to TV and video games, according to 2015 data from Nielsen.

Adults in households with annual incomes below $25,000 spent 42.22 minutes monthly using video game consoles, compared with 17.58 minutes whiled away by adults in households with annual incomes over $75,000. And adults in the lowest-income households spent 211.14 minutes monthly watching live or recorded television, compared with 113.41 minutes for adults in the highest-income group.

That's more than three episodes of "The Big Bang Theory" -- including commercial breaks -- that wealthier people spent doing something different with their time. So try turning off the tube if you want to see how highly effective people spend their Saturdays.


Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

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Wednesday, July 18, 2018

Bootstrapping Secret: Spend Every Day Trying To Make Money, Not Save Money

My father was an entrepreneur and like him, I always wanted to start my own company. When trying to build a business from scratch, one of the most important lessons he taught me is that you must spend every day trying to earn $1, not trying to save $1.

While I heard him growing up, I never quite understood what he meant until I started my own company.

After years of working for others in the burgeoning digital advertising space, I made the leap right after the great recession and launched PK4 Media. 

After some contemplation, I made the decision to bootstrap so I would have complete control of my vision and destiny.  As a result of that decision, I began to better understand what my father was trying to tell me.

When I realized how much personal risk I was taking on, I felt a heightened sense of anxiety.  I did not want to squander a lifetime of savings I had acquired working long hours for someone else. The myriad of bold, game-changing moves I was planning to make started to feel risky.

That was exactly when what my father told me became crystal clear.  To be one of the very few startups that succeed, you need to have self-belief, be willing to take calculated risks and seize opportunities when the time is right.

When I started PK4 Media, I vowed to overcome those fears and made a pact that I would never play with scared money.

If you decide not to speak at a high-visibility conference because there is a nominal sponsorship fee, you are playing with scared money; If you decide not to hire a great candidate because their salary requirement was a bit higher than you allotted, you are playing with scared money; and if you don’t invest in new technology that can transform your business and help you surpass your competitors, you are playing with scared money.

Spending every day trying to earn $1, not trying to save $1 means being hyper-focused on generating revenue and less focused on controlling costs and saving money.

To get a fledgling company off and running, you must always be networking, meeting with clients and getting your name into the marketplace quickly and in a meaningful way.  It is critical to trust in the business model you've created and remember that revenue is the life blood of your company.

On the flip side, it is a huge mistake to waste time combing through an employee’s expense report line by line. The energy you waste focusing on whether to approve a dinner expense is time not spent growing your business.

It confirms a tried and true principle I recently highlighted in Forbes, which is that that 20% of your efforts will produce 80% of your results. Leaders must stay focused on the high ROI activities if the company is to succeed.

Yes, expenses can add up and some employees may be building up quite a tab. In the event it becomes clear that an employee is taking advantage without producing results, it is time to have a talk and maybe let that person go.

On the other hand, I have personally invested in sales people who haven’t closed any significant revenue their first year and worked with them to become the top sales person at our company. If I was solely concerned with saving the company money, we would not have seen the personal growth of this sales person or benefited from the enormous revenue they generated.

Bottom line, if the spending is strategically being done in search of revenue, those losses on your balance sheet can be recovered with a single new client signed. And betting big on yourself is the only way your business will ever grow to the point where it matches your original vision.

The key to being one of the very few entrepreneurs who “make it” is to identify a need, believe in yourself and trust your business model.  When I find myself in a tricky predicament and I am feeling tentative, I always remind myself not to play with scared money and to spend every day trying to earn $1, not trying to save $1.


Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

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Owe back taxes? You could lose your passport

If you're one of the several hundred thousand U.S. taxpayers who the IRS deems to have a "seriously delinquent" tax debt, be warned: Your U.S. passport may be in jeopardy.

In 2015, President Barack Obama signed into law the Fixing America's Surface Transportation Act, or FAST Act. It requires the U.S. State Department to deny renewal of -- and even revoke -- the passports of individuals who the IRS identifies as having delinquent tax debts.  

The tax agency recently provided new details on its enforcement of the FAST Act, stating it's in the process of sending the names of at least 362,000 individuals who owe $51,000 or more in delinquent taxes. According to an IRS spokesperson, it will send the names to the State Department in batches, and it expects to have sent the entire list by year-end.

According to recent reports, the enforcement actions taken to date have already had an impact. The State Department confirmed it has denied passports to an undisclosed number of tax debtors. The IRS confirmed that it has collected over $11.5 million from 220 individuals, with one debtor paying over $1 million to avoid passport denial.

The specifics of how the enforcement of the law works are spelled out in a section of the FAST Act titled Revocation or Denial of Passport in Case of Certain Tax Delinquencies. The IRS said for now authorities are denying renewal of passports rather than revoking them. But the law does allow the State Department to cancel current passports of tax debtors.

Enforcement of the law has its critics, who say that because the IRS notifies tax debtors at about the same time it sends their name to the State Department, they don't have enough time to resolve the debt and allow the IRS and the State Department to lift the passport restrictions. Critics would also like the notices the IRS sends to individuals to be clearer about situations that are exempt from the law.

Under the law, the IRS defines a delinquent debtor as a person owing a legally enforceable tax liability of more than $51,000 in 2018. This includes the tax, penalties and interest, which can add up fast. A tax lien must be filed, and all administrative remedies for lien relief must have lapsed or been denied. It also includes those who have been issued a tax levy.

When a taxpayer who is on the delinquent list applies for or renews a passport, there's a 90-day process for resolving erroneous IRS certifications or for getting back in good standing for past-due taxes (such as establishing a payment plan with the IRS). But there's no grace period for resolving these issues before the State Department revokes a passport.   

The IRS won't report individuals who fall under the following situations:

  • Those who've entered an installment agreement with the IRS to pay their taxes
  • Those who've settled their tax debt through an offer in compromise or a Justice Department agreement
  • Those who appeal a tax levy through an IRS collection due-process hearing
  • Those who've request innocent spouse relief by filing Form 8857
  • Also excluded are individuals serving in a combat zone, living in a federal declared disaster area, in a bankruptcy proceeding, have debts in a noncollectable hardship status or who are victims of identity theft.  

For tax debtors who want to keep their U.S. passport privileges, the most expedient way to avoid being placed on the IRS list is to enter into an installment agreement with the agency and begin making payments.

If you think you may be subject to a passport restriction because of a tax debt, don't wait until your next travel abroad. Instead, call the National Passport Information Center at 877-487-2778 to inquire about your situation. If you owe back taxes, hire a tax professional to advise you on the various arrangements to settle your debt with the IRS, or contact the IRS at 800-829-1040.


Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

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Tuesday, July 17, 2018

How Negotiation Saves Your Business Money

Money skills can often be boiled down to the elements of budgeting: controlling your costs through awareness and management. However, there’s one business skill that’s often underrated in terms of its financial impact: negotiation. Negotiation saves your business money.

This action allows you to work toward a lower price for your common expenses, making sure you pay less for the things your business wants or needs. But it also helps you earn more money from your clients, investors, and financiers. You can negotiate almost anything, and if you practice it often enough, you could save your business thousands of dollars in regular expenses—and make thousands more throughout your operations.

Opportunities for Negotiation

So, where are the best opportunities for negotiation? Again, you can hypothetically negotiate anything, but these are some of the most promising areas for financial gain.

Most entrepreneurs think of negotiation primarily as a way to secure more favorable contracts—and it’s a valuable application. When securing a new deal with a client, you’ll likely enter a round of negotiation, debating points like the price, the timeline, and the terms of the deal. You’ll have the opportunity to tilt these elements in your favor, earning more revenue from the same job or at least securing better terms that allow you to operate more efficiently.

There are some recurring bills that won’t have much room for negotiation. For example, you won’t be able to negotiate with the city to have your water bill lowered. But you can adjust your rates for many recurring business expenses, such as the Internet. Threatening to leave a provider for a competitor, citing your history, and offering to extend a long-term contract are all valuable possibilities that can help you lower your bills.

Other Areas to Negotiate

Here are some other ways negotiation saves money for your business:

  • Interest rates and loan terms. For example, you can negotiate the interest rates on your credit card payments, or position yourself for more favorable terms for your business line of credit. The rates you get will depend partially on your credit history and business prospects.
  • Salaries and benefits. When you hire a new employee, they’ll likely negotiate with you over salary and benefits. This area is tricky. You’ll want to give your employee enough compensation to keep them interested in the job. Yet, starting them at a lower salary can save money.
  • Lease agreements. If you’re leasing an office or retail space, you might be surprised how easy it is to negotiate the terms of that lease. With the right positioning, you can almost certainly land a lower price point, and you might get some extra perks out of the agreement while you’re at it. Your success here will be dependent on demand for real estate in the area, but it’s almost always worth pushing for a better deal.
  • Insurance rates. For the most part, insurance is a logical, mathematical, and straightforward process. Your rates will depend on the calculated risks your business faces in several areas. However, you may be able to negotiate better rates by making certain concessions or combining policies.
  • Anything used. If you’re buying inventory or equipment used, you’ll have tremendous leverage for negotiation. The value of used goods is somewhat subjective. Your seller may be particularly motivated. The extra value of each deal ensures maximum profitability.

Fundamentals for Negotiation Success

Thankfully, the same core skills and tactics can help you become successful in almost any application. Follow these tips to find success:

  • Do your research in advance. One of your most important keys to success is doing your research, long in advance of the actual negotiation. Before walking into your negotiation meeting, you should have a good idea of the market rate for whatever you’re discussing—and data points to prove it. The research will equip you with the knowledge and anchor points necessary to get the right price and will make you seem more confident and knowledgeable in the conversation itself—which should be able to tilt things in your favor.
  • Project confidence. Speaking of confidence, the more confidence you’re able to project, the more likely you’ll find success; confidence implies knowledge and conviction, which is hard to overcome. There are many ways to project confidence, including speaking slowly and deliberately, remaining calm, and maintaining good posture throughout the conversation.
  • Develop a personal connection. If you can, work to develop a personal connection with the person you’re negotiating with. It may seem like negotiation is a cold, impersonal business tactic, built on logic, but there’s an emotional component to it as well. People will be far more willing to cut a better deal to someone who seems like a friend than a stern, demanding businessperson out for a profit. Make friendly conversation and use charm to establish a bond before you get too far in negotiations.

Other Negotiation Tactics

Beyond the initial strategy, consider these negotiation tactics to get what you want:

  • Give yourself room. You’ve likely heard this one before; make sure you start the negotiation at a higher or lower price than you actually For example if you want to make $5,000 off of a contract, ask for $6,500. If you want to buy a used computer for $500, start at $350. This gives you a chance to beat your goals outright and gives you wiggle room to work with if and when your opposing party starts to negotiate.
  • Disclose your goals. One of the easiest ways to gain someone’s trust is to offer transparency early. You can do this by disclosing your goals, and any mitigating circumstances affecting your decision. For example, you might tell a client how eager you are to land a deal or admit that your budget is lower than you’d like. This may seem like it makes your position weaker since it volunteers information that could be kept secret, but it makes you seem more personal and approachable, so it’s often worth the tradeoff.
  • Ask for (and offer) intangibles. You won’t always be able to get the price you want or even budge the price through negotiation. Even so, you’ll have a chance to tip the scales in your favor. Instead of asking for price movement, ask for “intangible” items, such as an option to lower your interest rate in the future, a bonus for signing the contract, or an extension on the terms of the deal.

Important Negotiation Actions

Yet, there is even more that’s possible when it comes to ensuring you negotiate in a way that saves your money business like these actions:

  • Always trade; never give things away. During the course of negotiation, the opposing party will inevitably ask you to make concessions, such as dropping the price or including an extra benefit. Avoid giving these things away without asking for something in return. For example, if your new hire wants a $1,500 credit to help with moving expenses, consider offering it—contingent on the employee starting a week earlier than originally intended.
  • Tailor your strategies to the individual. Sometimes, your client will request a negotiation. Other times, you’ll be the one initiating it. Sometimes, you’ll be dealing with a conservative, stubborn CEO. Other times, you’ll be dealing with a flexible, young entrepreneur. Get to know your audience as well as you can, and tweak your strategies accordingly. The same tricks won’t work on every negotiator.
  • Avoid timeline pressure. It’s tempting to introduce a deadline to pressure a close to the deal. For example, if you’re having a hard time settling on a price, you might claim you’ll walk away if the deal isn’t closed within a week. However, it’s usually better to allow more flexibility; undue timeline pressure can make your opposing party more hostile, or make them more likely to walk if and when they encounter an unfavorable condition.

Negotiation is All Business

Finally, try not to take things personally. You’ll encounter all types of people in your business negotiations. These include those who drive a hard bargain and make no concessions.

When this happens, it’s easy to get offended or even angry at the person you’re working with. Remember, negotiation isn’t personal. If the conditions become too stressful or if the terms of the deal become unfavorable, it’s better to walk away calmly.

Final Thoughts on the Art of Negotiating

Try not to be intimidated at the thought of negotiation even if you’re new to the strategy. Only through experience will you develop the confidence, positioning, and interactive skills necessary to land better deals. If you’re under-experienced in this field, consider using hypothetical scenarios and engagements with people you know. These training exercises perfect your skills. Then, put them to work every chance you get.

Source: | Peter Daisyme
Image Credit: rawpixel / Pixabay

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

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Here's How Much Money You Save By Cooking At Home

Intuitively, we all know there are benefits to cooking at home. You can use healthier ingredients, set portions to a reasonable size, avoid food allergies, and of course, you can save money compared to ordering restaurant delivery or using a meal kit service.

But just how much money do you save by cooking at home? We decided to analyze our recipe data to find out the true cost of cooking at home from scratch, compared to delivery from a restaurant or a meal kit service. 

We analyzed data from Priceonomics customer wellio, a platform that breaks down millions of recipes into single ingredients and matching those to grocery items from local stores. That allows us to measure the ingredient cost for a wide variety of recipes. For 86 popular dinner recipes, we decided to look at the average cost per serving of cooking from scratch and compare it to the cost per serving of ordering from a restaurant or a meal kit delivery service.

We found on average, it is almost five times more expensive to order delivery from a restaurant than it is to cook at home. And if you’re using a meal kit service as a shortcut to a home cooked meal, it’s a bit more affordable, but still almost three times as expensive as cooking from scratch.

When cooking at home, you'll save a substantial amount of money on carb-based meals like pasta or pizza, and you'll save the most on protein-based meals when compared to ordering from a restaurant or meal kits.


Before diving into the results, let’s spend a moment on the methodology of this analysis. We looked at 86 popular meals and examined how much it would cost to acquire them as groceries for home cooking, restaurant delivery or meal kit delivery. For home cooking, we've calculated the price per serving based on the consumed portion of ingredients. For example, you purchase a whole onion for the recipe, which requires half an onion per serving, so the price per serving is ½ of the onion. To be clear, this is an analysis of your costs and isn’t about looking at opportunity costs of time associated with cooking.

For restaurant delivery, we looked up menu prices on the websites of the following national restaurant chains: Applebee's, Cheesecake Factory, Chevy's, Chili's, Lyfe Kitchen, Maggiano's, and P.F. Chang's. Then added an average $5 delivery fee based on delivery prices from Caviar, UberEats, and Grubhub. Since meals sold within a meal kit are usually part of a bundle, we took the average price of a meal across the bundle and then allocated a $2.50 delivery fee per meal. For home cooking, we looked at the cost of ingredients according to wellio, based on Whole Foods Market, a national grocery chain with quality products.

First, let’s look at the average costs of the meals we analyzed depending on if you acquired them from a restaurant versus meals kits versus cooking at home from scratch.

Cost of cooking overallWELLIO | Data source: wellio.

By far, getting dinner delivered from a restaurant is the most expensive meal option. 

At over $20 per serving on average, a restaurant delivered meal is almost three times as expensive as a meal kit and five times as expensive as cooking at home from scratch. Obviously, when you cook at home, you’ll spend more time but you usually end up with a healthier meal because you’re the one to decide what exactly goes into it. 

Next, let’s look at the cost of getting specific meals delivered via restaurant delivery versus making the meal from scratch. Of course, there are “cheaper” places to buy these restaurant meals, but these are the prices published on restaurant websites in our sample of mostly national chains. 

Which meals save you the most when you roll up your sleeves and cook instead of picking up your phone to order?

Cooking versus restaurantWELLIO | Data source: wellio.

At the top of the list, the meals you can save the most money by cooking at home are heavily protein-based entrees. As it turns out, restaurants charge a lot of money for meals that have beef, pork, and chicken. When you factor in a delivery cost, your price per meal can easily exceed $20 per person (and sometimes even more than $30 per person!).

To better understand this comparison, let’s look at an example of the price per serving breakdown for Pork Tenderloin, one of the top money-saving meals when cooking at home from the list above.

A recipe breakdown.WELLIO | Data source: wellio.

Also appearing throughout the list are pasta-based meals like Broccoli Alfredo, Pad Thai, Pasta Bolognese and Soba Noodles. If you buy these from a restaurant you will pay “entree” prices of about $20. However, you can easily make these meals at home and save 80-90% per serving. 

Restaurant delivery, however, isn’t the only alternative to cooking at home. You can also have meal kits delivered to your house. These kits are sold at a premium compared to cooking from scratch because the raw ingredients are pre-assembled and pre-portioned for you.

If you’re looking to save money, when should you avoid meal kits and instead cook from scratch at home?

How much do you save?WELLIO | Data source: wellio. 

For vegetable and pasta-based meals, frankly, it’s really cheap to make them at home while meal kits still charge a lot for them. 

In the above list, for example, making a Cheese Pizza, Mac & Cheese, Cauliflower or Quinoa bowl is incredibly inexpensive to make at home -- it only costs about a dollar per serving! However, these are the type of meals where meal kits are the worst value since you’ll be paying around $12 for them as part of the “bundle” you’re required to purchase (that also includes delivery fee). 

Eating meat through a meal kit is about half as expensive as ordering it from a restaurant, but still much more expensive than making it yourself. A few meat-based meals stand out as being much more expensive with a meal kit than home cooking -- Cilantro Lime Chicken, Chicken Soup, and Teriyaki Chicken make the top ten worst meal kit deals compared to home cooking.

Lastly, let’s look at all the data. The below chart shows the prices of all 86 meals we analyzed from a meal kit service, a restaurant, or making it at home from scratch.

Restaurant vs meal kit vs home cookingWELLIO | Data source: wellio.

What rules of thumb can be gleaned from looking at all this data? 

First, If meat is involved, you can save a lot of money by making the dish at home instead of ordering it from a restaurant. These types of dishes are the most expensive entrees on the menu at restaurants but don’t cost you that much to cook from scratch.

Second, if the ingredients are items like flour, cheese, and pasta, which are very inexpensive at the grocery store, avoid getting them from a meal kit service. On the other hand, meal kits can be a pretty good option if you want to cook more complicated meals with many ingredients, especially a meal like Curry Chicken which has many spices.

Lastly, cooking at home saves you money across the board. Although you will spend more time than ordering delivery from a restaurant, you will get a nutritious and delicious meal for about $4 a person.


Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

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