For one, it means as Americans WE LOVE to eat out. I personally love the occasional trip to local joints with the best food, but not necessarily the highest prices. Who doesn’t love finding a small, family-owned restaurant with unsurpassed service and food quality to tell everyone else about? The trend also implies more Americans find it either inconvenient to cook, or do not know how.
I know many people claim they simply do not “have the time“. They stop anywhere that’s convenient to pick up any of their 3 daily meals. Many times all 3 meals in one day are eaten out. There are also people who plain ‘ol burn the meatloaf every time and give up. This is a shame because with a little more practice they could be eating home-cooked meals far better than most restaurants will serve you.
Remember that cooking is a valuable skill learned over time.
If you haven’t noticed, or maybe you have, eating out can be very expensive. Going to a moderately priced restaurant for two people can reach $74 in a heart beat.
Example Meal:
That one meal just cost you 2.5 hours of your work day assuming you earn $30 per hour. If you eat out just once a week like this you have voluntarily added 130 hours of work to your life this year alone, which equates to 3.25 weeks a year. Let me phrase it differently:
You just forfeited a nice 3 week vacation in exchange for weekly burgers and beers.
I don’t know about you but I’d rather spend less time eating out if it meant longer vacations, and less time having to work for a living.
Let’s calculate how your eating out habit is affecting your finances.
For starters let’s assume you eat out 7 times per week. Six of those meals are for your lunch at $15 each, and one is with your family costing you $125. That equates to $215 per week, $931 per month, and $11,180 per year spent dining out. That’s a lot of money.
If you decide to forego eating out to save this money and invest it over 30 years earning an 8% return here is how much money you would have in your account:
$1,387,524.65
You could literally be a multi-millionaire.
You might think most people aren’t spending $931 per month eating out if you happen to spend less. In my experience there are many people spending this amount and often even more at restaurants and bars.
The take-away, not take out, here is that Americans are self inflicting financial pain upon themselves for an easily fixed problem. Cutting back the amount spent eating out can have a dramatic impact on your personal finances.
I’m not saying to never dine out, but if you could forego it altogether you’ll dramatically improve your finances. If you’re unsure what you spend each year you can use our free budgeting tool. Research shows people that budget can save 10-15% on their spending. The key is to finding the right balance that allows you to enjoy others cooking while still reaching all your financial goals. Once your financial goals are reached then it’s time to celebrate at a nice restaurant!
*calculated with 8% interest compounded monthly.
