Blue Apron (part II): How much can eating in save for you?

Thinking about how much BA can save for you

Saving money early on in your life is really important because of compounding. However, many of us early in our careers find it hard to save because of a variety of reasons: social pressure (doing what all your friends are doing, trying to keep up with the people next door, etc), relatively low compensation rates, desire to live in areas with a high cost of living (e.g. DC, NYC, SF).

But one way of easily saving money is to find solutions that meet your needs but are much cheaper than the alternative. I previously wrote about the dinner kit service Blue Apron and in that post I said that the service saved me a lot of money. To back up that statement, here’re some number for you.

Crunching the numbers on cost-savings

I guess I could have used a fancy Markov Chain Monte Carlo model to generate the analysis for this post. Let’s not go there. What I’ve done is calculated the cost savings for two people who do follow a high / medium / low cost restaurant eating strategy for dinners on the weekends. For example, the high cost couple would eat at one inexpensive ($15 / person), one mid-range ($30 / person) and one high-end ($50 / person) restaurant. I then compared the annual cost of this strategy against having a Blue Apron box delivered on Friday night for consumption on Fri/Sat/Sun. Here’re the results:

The average couple would save approximately $3813 annually. How much is that really? As a percentage of salary, probably not too bad. If each person in the couple makes $50,000 gross income a year ($100,000 joint), that amount is only about 4% of their gross income. That’s not that much right? But let’s think about it another way: how much would you have to save to consistently earn that much money? Let’s use a really conservative strategy– non-reinvested dividend stock income. For illustration’s sake I’ll pick on the biggest market cap company out there, Apple (disclosure, I’m long AAPL).

AAPL pays out $2.08 per share annually. So in order to generate $3813 in dividend income from AAPL, you would need to have approx 1833 shares. To buy 1833 shares at today’s market price would require about $232,791.

Doesn’t $3813 seem like a lot more now?

You don’t have to be a hermit or an extremist

I’m not advocating that you never go out to eat. I am trying to show that a little bit of change in your life can make a huge difference to your budget without sacrificing much in the way of lifestyle. And you can save eating out for really special occasions, really memorable meals that will both nourish and give you those lasting impressions.

What do you think? Is this crazy talk? Post your comments below.