Debt Consolidation

How Dining Out Is Eating Your Budget

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Foodie culture means that an increasing number of people are more scrutinous about what they put in their stomachs. But it might also mean that they’re less scrutinous about how much they’re spending everyday on food.

Food isn’t just sustenance; it’s trendy, authentic, daring, exciting or maybe even all of these things at once. Keep reading for a wake-up call about the cost of dining out, and learn how you can experience the excitement of cuisine without betraying your food budget.

How much are you spending by eating out?

The amount Americans spend annually on food eaten away from home is rising at a higher rate than spending on food eaten at home, although people are still spending more on food eaten at home, according to the latest data from the Bureau of Labor Statistics.

You’ll spend about $36.40 per person plus tip when dining out

With the rise of a keen interest of food comes a fall in your savings. You might be tempted to try that new concept Asian-fusion restaurant down the road that serves appetizers in a shoe, but dining out could cost you more than $40 per person.

The average person spends about $36.40 when dining out, according to a 2018 dining trends survey from Zagat, a restaurant rating company. Plus, the national tipping percentage is at 18.1%. That means that a meal out could set you back $42.99 per person with tip.

It’s bleaker still for residents of big cities like Boston and New York City, with an average of $41.54 and $46.14 per person before tip, respectively.

Ordering takeout is often coupled with hidden fees

Delivery services advertise specials: free delivery, or $0.99 delivery fees. But it’s not really a “free delivery,” as you’re paying a service fee as well, and a tip to your driver on top of that.

Take Uber Eats, for example: On a food order that costs $15.58, you would pay a $2.34 service fee. When you add $2.99 for a delivery fee, $4 for a tip and $1.29 for taxes (in North Carolina), suddenly your $15 order costs $26.20. And as shocking as the markup might seem, it doesn’t stop people who are short on time from ordering delivery.

A 2019 survey by US Foods, restaurant supplier and distributor, found that the average person has two delivery service apps and uses them three times per month. On average, respondents said, at most, they would be willing to pay a combined $8.50 on service fees, delivery fees and tip. Customers and deliverers agreed that $4 is a good amount to tip.

See the fees charged by the most popular delivery services below:

Treat yourself in moderation: Save money while eating well

Food is a necessary expense, but that isn’t an excuse to overspend on dining out. You can enjoy authentic, fresh and delicious food without having to break your food budget.

When eating out, follow these tips to save:

  • Take advantage of large portion sizes: Some restaurants serve larger portions for the same cost as competitors; use this to your advantage to split one meal into two.
  • Have a snack before eating out: Have a small bite to eat before going out to eat or ordering in. That can help you cut back on how much you order (or leave you with more leftovers.)
  • Make dining out a treat: Eating at a restaurant every night is an expensive way to expand your palate. Limit yourself to once a week, or whatever suits your budget.
  • Skip the alcohol: Especially wine, which is painfully marked up at restaurants. If you do want to cut loose a bit, ask your server if there are any drink specials.
  • Try that trendy new restaurant for lunch: Many establishments have lunch specials and prix fixe lunch menus, and you’ll end up spending less than you would at dinnertime.

Incorporate dining out into your budget

Self-proclaimed foodies go to any length to get a reservation at a hot new restaurant, but going into debt to satiate your appetite is ill-advised. Fortunately, you can account for eating out in your budget.

Sen. Elizabeth Warren of Massachusetts and 2020 presidential candidate popularized the 50/30/20 budget in her 2005 book “All Your Worth: The Ultimate Lifetime Money Plan.” Here’s how this budget breaks down:

  • 50% of your income should go toward necessary expenses: This category includes your “needs,” like a mortgage or rent, utility bills, groceries, child care supplies and personal care.
  • 30% of your income should go toward your “wants”: This is where your restaurant budget should fall into, along with cable/internet, entertainment and other incidentals.
  • 20% of your budget should go toward savings and debt repayment: This includes short-term and long-term savings, such as for retirement. If you need help prioritizing debt repayment, you can read this guide.

As long as you are paying your bills and putting 20% of your income to savings, then you likely have room to pay for eating out in your budget. With the right tools at your disposal, it’s possible to eat well with healthy spending habits.

Pricing data accurate as of Nov. 14, 2019.


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