Check out the Hack That can Help you Save $3000 a Year With a Simple Paper Bag

Financial stability and security have emerged as essential at a time when Americans are plagued by economic uncertainty and inflation, among other challenges. Amidst such turbulent times, adopting a few smart money habits and ways to invest can go a long way. Leo Babauta, who is also the author of the blog Zen Habits, aims to help people live better and economically sound lives, through a hack that helped him save an additional $3,000 a year using a simple brown bag. For those skeptical about saving money with just paper bags, here are the details.

How does it work?

Babauta saved money each day by packing his meals in a brown paper bag that costs him just $1-$3 per day as compared to his co-workers who go out for lunch spending $10 to $15. By packing his own lunch, he saved around $11 to $12 every weekday which adds up to $3,000 for a year. In addition to that, he can leave work early if he wants since eating out requires long lunch breaks. Babauta was pretty happy with habit and said, "I man the office, answering the phones and any visitors that come in, while they go and have a good time at lunch".

He shared that he prefers home-cooked food over a fancy meal from an expensive restaurant. By saving some pennies every week for a whole year including that of the lavish dine-out weekends, you can save even more than $7,500 yearly.

Understanding the concept of cash compounding

While everyone enjoys indulging in extravagant meals, according to Leo, introspection on your lifestyle and financial habits is a good way to give yourself a reality check. Avoiding dine-out on weekdays saves you $3,000, which can further be invested in a standard index fund. By adding more money to the fund every month for 25 years, you will realize that the corpus has grown to $500,000. Making and relishing your lunch and dinner at home every week can help you save $6,000 a year which can potentially reach $1,000,000 using the same investment strategy over 25 years.

But for money to lead to further benefits, it is essential to stay consistent and committed to the goal. To stay on track, the author suggests depositing the saved amount from your income into your savings accounts. But how to stick to a habit?

There are a few ways to ensure that your brown-bagged lunches are delicious and handy. For this, you can focus on preparing easy meals that are healthy and can satisfy your cravings. These might include sandwiches, rice bowls, wraps, and salads. You can also pack nuts, seeds, fox nuts, or fruit juices to munch on in the evening. Canned foods can also be an option but take that road only when you are getting late. Advance meal preps can help you avoid the morning rush and uplift your savings saved by eating the home-cooked ones.