I eat in my office every working day with
my home-made lunchbox. My motivation is mainly to avoid the very busy
canteens during lunch hours and for more healthy food. However, often
people
attribute the behaviour of bringing one’s home-made food to saving
money. Eating out is considered a more lavish behaviour.
I worked for a private company a long time ago before becoming a
teacher. At first, I ate out. Eventually, I brought my own rice box
while other colleagues still mainly ate out. One day, a senior colleague
said, half seriously and half-jokingly, “A ha, you save a lot of money
for a year like this [by bringing your own food].” My reply was that it
would not save a lot. He seemed to be not so convinced because since
then he kept on and off joking with the same words.
Did I really save a lot? Yes and no. Yes, home-made food costs much
lower. To recall the price of eating out at that time, probably it was $20 to $30 a meal. If I brought
my own rice box, the cost could be as low as $10 or less. This is a more
than 50% reduction! So, I did save a lot. If I had eaten out without
the home-made food for 260 working days a year, I had to pay an extra
$3000 to $5000 a year. Probably this is a lot. This is already a salary
for a month for some people. If a person earns $6000 a month, this is a
saving of about 7% a year. Nonetheless, I did not feel I had saved much.
I earned about $20,000 a month at that time. This was not a high
salary. And my saving from food represented only 1% to 2% of my annual
income. So, from my perspective, I said “no” to the question “Did I save
a lot?”.
Perhaps we can reconsider the
problem in this way. Assume I ate out for every lunch and dinner. Then,
my annual cost for food was roughly $22,000. Compared to my annual
income at that time, this represented only a 9% share. So, you can see.
Even if I had made a great effort to squeeze food expense, I could not
save much for my future. If my goal is to improve my future living
standard (for example, to buy a car, not to mention a property), saving from eating home-made
food is not a good method.
So, my past
colleague could be right only if he thought out of context − he was not
concerned with the objective of saving (for improving one’s future
living standard) and concentrated only on the rate of reduction by
eating home-made food. But probably he was indeed concerned with the
objective of saving. His “impression” that saving from food helped
improve living standard may be right in the old days when he had to work
hard for a living. The colleague was more senior than me. So, he might just
remember some maxims applicable in the past although the “maxims” may
already be outdated.
What? In economics,
there is a so-called “Engel’s Law”. This empirical law says that when
income increases, the food expenditure share in total income decreases.
In Hong Kong, average food expenditure accounted for about 34% of total
income in 1990 or so. But it accounted for only 27% in 2015. On the other hand, we can compare the expenditure
shares in different countries. Less developed countries have a higher share in
food expenditure. For example, the share is about 34% in
Russia and in Vietnam 50% in 2008.
Engel’s
Law is very well established. It works almost universally and for all
time. Back to my colleague’s position, I think he probably grew up in a
world where food expenditure share was higher. He obviously found that
saving from food could help improve a lot for future. He did not know my
food expenditure share. So, he could only use his own young experience
for reference to make comments. If he spent 30% or so on food when he
was young, a reduction of 50% food expenditure already meant a 15% saving
of total income. This is quite a lot. His intuition about food saving
was right. But situations had changed due to the Engel’s Law. Actually I
spent less than 10% on food at that time. But he did not know. No
wonder he failed to appreciate my honest response that saving from food
did not help.
