The three biggest expenses in most budgets are housing, food, and transportation. I feel like I’ve got a good handle on our housing and on transportation as well. But sometimes (like monthly) it feels like I’m going broke from eating out. Restaurants do some serious damage to my budget and from what I read on Twitter and other personal finance blogs, lots of you feel like you spend too much money eating out as well.
Oddly enough, it took figuring out how much money I was spending at the grocery store to finally motivate me to change my dining out habits.
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Broke Family, Table for Two
I like eating out because it’s convenient, fun, and a break from the norm. I’ve always known that I spend a lot eating out, but really it’s my only vice so I don’t sweat it too much. I’d always assumed that I was spending about $300 per month eating out.
Most of that comes from me going out for lunch while I’m at work. Mandy and I like to go out to dinner on our weekly date night as well. The average restaurant bill on date night is higher, but we don’t drink alcohol so the bill isn’t that bad.
You know what they say about assumptions
I’d just always assumed that I was spending an average of about $10 per day eating out; $300 per month. Boy was I wrong. It wasn’t until I started tracking my expenses and categorizing them that I realized just how ridiculous my restaurant spending really was.
Check this out. According to Personal Capital, my average monthly spend in restaurants last year was $517 per month. Ouch.
Going broke eating out
My actual spending is a heckuva lot more than the ‘about $300’ per month I assumed I was spending. You can see from that image above that near the end of last year it wasn’t uncommon for me to spend over $600 per month dining out, with my all-time-high coming in over $800. In fact, my monthly AVERAGE was over $500.
That image also shows you that my total spending in the Restaurant category was $6,222.35 last year. That’s an average of $17.05 every single day. Using math from the 4% rule, I’ll need to have $150,000 invested to support my $6,000 per year dining out habit ($6000 x .04 = $150,000). Do I really like eating out that much?
Now look at this. My average monthly grocery bill, at $648, was only slightly higher that my restaurant bill.
You might think that as my restaurant bill grew my grocery bill would go down. Not so. I was just consuming more.
It was only by tracking my expenses that I finally realized exactly what was really going on. No more assumptions. This was stone cold reality kicking me in the rear.
What gets measured gets improved
Calculating what the cost of a home cooked meal should be has been the catalyst that’s driving me to change my eating out habit. Here’s how I’m calculating that cost.
My grocery bill for last year was $7,790.10. That’s $21.34 per day to feed my family of six. At three meals per day x 6 people, the average cost per home cooked meal = $1.19 per meal, per person.
Compare that to the average cost of a restaurant meal: $17.05 per day eating out. Just ONE of my trips to a restaurant could buy 14 meals fixed at home. Yowza! That was an eye-opener.
Now whenever I go out to eat, I feel incredibly selfish and that guilt has been enough to slowly start changing my behavior. I still eat out more than I should, but I’m doing much better.
Plugging the hole in my budget
If you’re like me and feel that eating out is leaving a huge hole in your budget, then you can try doing what I’m doing to get that restaurant spending under control.
- Don’t assume you know where you money is going. Start to track your spending using a free Personal Capital account and make sure you know where every penny is going. Personal Capital is a free tool that is great at helping you see exactly where your money is going, plus you get access to these cool charts and graphs.
- Figure out the cost of a home cooked meal. Knowing what an average home cooked meal actually costs can help you put your restaurant bill into perspective. Here’s the formula to calculate the cost of each meal:
- ((Monthly grocery bill x 12)/365) / (number of people in your home x 3) = avg. cost per meal, per person.
- Eating out at work is my biggest problem. To keep that cost down that I’ve been preparing my work meals in advance. These steak and egg burritos and Cornish pastys are two of my favorite go-to meals. Having a meal ready to go in the morning works much better for me than trying to throw something together as I’m rushing out the door to work.
Is eating out a problem for you? Do you know what the cost of a home cooked meal is per person? Do you think knowing that number would help you curb your own restaurant bills? What areas of your budget do you think you could do better in?