Many People Unaware That These Financial Mistakes Make It Hard to Build Wealth
Many people are unaware that certain financial mistakes make it difficult to accumulate wealth. Jakarta, CNBC Indonesia - Many assume their largest expenses stem from loan instalments, luxury shopping, or holidays. However, according to self-made millionaire and personal finance expert Ramit Sethi, the greatest source of financial leakage actually comes from another habit: food!
In his latest book, Money for Couples, Sethi reveals that approximately 90% of the people he meets have the opportunity to save the most money by adjusting their food expenditures, including dining out and ordering food online. “Of the 90% of people I speak with, food is the largest category where money can be saved and redirected to more important matters,” Sethi wrote, as quoted by CNBC Make It.
He noted that food spending often goes unnoticed because it is tied to emotions and daily habits. “Buying dinner isn’t just about hunger. There is an element of comfort, impulsiveness, a reward for oneself, and many other factors,” he said.
Sethi explained that food expenses are often spread across numerous small transactions that are difficult to track—such as buying lunch at work, a partner dining out with friends, or ordering pizza for children. Consequently, total monthly food expenditure is often much higher than estimated. “It becomes a mixture of various small expenses that easily escape attention,” he said.
Many people only realise the true scale of their dining costs after reviewing credit card statements or bank records.
How to Change It
Sethi suggests that couples or families should begin recording all dining expenses using a single credit card or payment method to make monitoring easier. Furthermore, habit changes should be implemented gradually and with mutual support. Some of his clients have successfully cut food costs through various methods.
One approach involves buying groceries in bulk to store in the freezer, ensuring a stock of ingredients is always available for home-cooked meals on weekdays. Another involves replacing restaurant outings with potluck-style gatherings at home. Others have started scheduling specific days for meal prepping and utilising leftovers for subsequent meals.
Sethi emphasises that the primary goal is not simply to stop eating out, but to understand previously unnoticed spending. By knowing where the money flows, individuals can redirect those funds toward more significant objectives, such as saving, investing, paying off debt, or preparing for retirement.
One of Sethi’s clients reported successfully reducing dining out from five or six times a week. The money saved was subsequently used to accelerate credit card debt repayment. “After a long day, cooking and cleaning the kitchen is exhausting. But seeing the debt continuously decrease provides a unique sense of satisfaction,” the client remarked.
Sethi believes the first step is to be honest about one’s own spending habits. “Start with an honest conversation. What are you overspending on? Where can you reduce expenses?” he wrote. He emphasised that the more openly people discuss finances, the easier it becomes to manage money more wisely and in alignment with life goals.