This is why you're broke 

This is why you’re broke, going out to eat edition

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going out to eat is expensiveGoing out to eat is great for a lot of reasons: no dishes, new culinary experiences, time to relax and share a meal with friends or my significant other, annoying the Internet by posting pictures of my food.

But those benefits come at a price. Going back to the days when I used to blow half my minimum-wage-landscaping-job paycheck at the local Chinese buffet, eating out has always been one of my biggest budget busters. I’ve been able to cut down on that over the years by learning to cook myself and having a wife who’s a really excellent cook (having two little daughters that aren’t amazing to take to restaurants also helps).

But looking at my restaurant spending is still pretty painful. According to an analysis of my credit and debit transactions, in the last 6 months alone, my household has spent $711 at restaurants. Add to that some allowance for cash transactions and babysitting, and project it out a year, and we’re talking something north of $1,500. That’s a lot of money, and probably way more than I would have spent on groceries to make those meals at home.

Now if I did the prudent thing and put that money into the S&P 500 instead, by the time retirement came around in 30 years, I could be sitting on around $186,000, assuming the stocks in that index continue to return an average of 8 percent per year.

Going out to eat is expensive

Why not 86 restaurant spending altogether?

Cutting my eating-out budget too far would actually entail a pretty large financial risk. See, one of the ways my wife and I keep our marriage healthy (7 years now) is regularly going on dates: calling a babysitter, and spending time together having uninterrupted, grown-up conversations over a good meal.

Aside from the huge emotional and quality-of-life benefits a happy marriage can yield, marriage can actually have huge financial benefits, too.

Economists have been trying to define those benefits at least since Gary Becker published “A Theory of Marriage” in the 1970s, and while it’s hard to put a dollar sign on something as complex as a marriage, most studies agree they’re real and substantial.

One big benefit researchers have identified is the ability to get to greater economies of scale; because a married couple can pool their resources and buy things jointly, they can enjoy a standard of living that neither would be able to afford individually. A study by researchers at Oxford University, Columbia University and Boston College revised in 2010 found that a typical couple would need 51 percent more income to buy the same amount of stuff individually.

The other is specialization. The theory here is that a married household allows both partners to do what they’re good at and avoid doing what they’re bad at to maximize their productivity. For example, I’m physically incapable of finding anything when I need it, and I always end up having to ask my wife where it is. If she wasn’t there to ask, I’d probably be late to work way more often, leading to less hours worked and probably less potential for advancement.

Whether it’s because of specialization or some other factor, married men enjoy a 44 percent bump in pay over their unmarried bros. For those keeping score at home, that’s more than the 34 percent bump in earnings college grads get! Unfortunately, the same isn’t true for women, who see their pay fall about 10 percent compared to unmarried women, but even with that, married couples still enjoy a benefit of around 34 percent overall over what they’d make individually.

That higher income seems to lead to more wealth accumulation — the median net worth of households headed by married couples is a whopping $139,024, compared to $27,310 for households headed by a single male or $22,184 for households headed by a single female, according to 2011 numbers from the U.S. Census.

So if marriages are a valuable financial asset, it makes sense in dollars-and-sense terms to spend some money to keep them going.

Plus, divorce is pretty damn expensive, and my wife being the scorched-earth type (don’t ever play Risk with her), she’d probably snag most of the money I’d saved up from not taking her out anyway.

So while I’m always looking to find ways to eat better food for less money, it’s a good bet I’m going to keep spending substantial amounts of money at restaurants for the foreseeable future.

What do you think? Do you break your budget eating out?

{ 16 comments, please add your thoughts now! }

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16 Responses to “This is why you’re broke, going out to eat edition”

  1. Michelle says:

    We used to really break the budget when it came to restaurant spending. We were spending over $1,000 each month at restaurants, which was insane – and we were already broke at that time, so that definitely did not help. EVERYTHING back then went to restaurants, because we were too lazy to cook.

    Now, we have a more healthy balance. We still go out to eat, but it’s either to new and fun restaurants, or to our long-time favorites.

  2. While avoiding restaurants will save money, the best benefit will be to your health! Getting your nutrition from healthful food prepared from scratch at home will improve many aspects of your life–energy, weight, healthfulness, immunity–and will save healthcare costs in the long run!

  3. Cathie says:

    I agree with Kurt. We have pared down our restaurant visits to a very few select places where we can make healthier choices, and we almost NEVER get a beverage other than water. Giving up the outrageously over-priced iced tea or soda has saved us lots. We are usually surprised at how little our bill is.

  4. uclalien says:

    Before we had kids, I took my wife out on a date every week. If you pick a place that isn’t too rowdy, it can give you some great one-on-one time and help strengthen your relationship. We usually chose somewhere fairly simple, but it did the trick.

    Now, as a father to a three-year-old and young twin boys, going out to eat in a traditional restaurant setting is rare. At this point, my primary focus is keeping my wife sane. If I see that she is exhausted, I will generally pick up deli sandwiches or burritos to give her a break.

    These options aren’t the most expensive and can usually feed the three older members of our family for under $15 (although, this will surely change as my boys get older). We eat fairly healthy most of the time, so a burrito every couple weeks isn’t going to kill us or our pocketbooks. But it goes a long way to keeping The Misses happy.

  5. Dennis in Orlando says:

    Coupons-Coupons-Coupons:> The most effective tool to lower your restaurant costs. Yes, moderation in eating out will reduce cost. Smarter use of coupons from the internet, newspapers, advertising media narrows some choices, however its implementation guarantees substantial savings.
    Look at coupons as if the restaurant is saying “We will pay you to eat at our establishment”. Look at “restaurant” meals as a way to celebrate your hard work, on an occasional basis.
    Dennis in Orlando

  6. JoeTaxpayer says:

    It starts with having just a bit of interest and talent in the kitchen.
    The next step is just to notice the cost vs ‘make at home.’ I looked at a shrimp and pasta dinner, $21 a plate, bill for 3 was $100 after sodas and a beer. I could make that meal for less than $20 total, including more shrimp, and have leftovers for my daughter’s lunch next day.
    When I make a series of great dinners, I don’t care about the grocery bill, instead I think of the restaurant bills I avoid.
    On the flip side – I make an effort that when we do eat out it’s a place that makes food I can’t or don’t make at home. For example, no ‘going out for burgers.’ But a good Japanese restaurant? Worth every cent.

  7. adam carolla fan says:

    claes is right on, great article. so true!!!

    on monday – thai food (bought friend food)and saw the movie Inside Llewyn Davis (a sleeper-snorer!). 40-45 bucks

    tuesday – went to applebees with friends. paid for poverty-stricken cousin. 35 bucks!

    tonight – gonna play bar trivia. but at least it’s during a bit of happy hour! maybe 20-30!

    well, i don’t budget, but im currently working 7 days a week and am single with no kids…so i don’t mind splurging.

    plus, how else am i going to find a lovely wife (like jim wong always used to say!) if i stay at home like a hermit crab?!

  8. Steve B. says:

    Eating out is very expensive. You got to get dressed and drive to the restaurant and you pay lots of money and you have to leave a tip. What about the time. It takes you four hours to go. You’re better off getting a box of shrimp and a pound of crab meat and make you’re own stuff at home. A bottle of wine is $11. You could make enough food for six people and everyone plenty of wine for $7, but you go to the restaurant and then all six people eat and drink 3 drinks and your total bill will be maybe $200. I never did like going out to eat. Of course we have a bay right here and can go get some crabs or oysters ourselves.

  9. Dear Debt says:

    Going out is my only real luxury at this point. I admit I can cut back, and I am doing so, but I won’t cut it out completely. It does go a long way for date night, my mental sanity, as well as me having some time away from doing extra work, like cooking.

  10. I still like dining at home because it’s way cheaper than dining out. However, I think going out every once in a while is fine, well if that once in a while is once a month, then I don’t think it would affect your budget that much.

  11. Amy says:

    Love cooking from scratch but sometimes you do need to get out of the 4 walls of home! I just try to find cheap ways of doing it, and making sure you eat something you wouldn’t cook better at home.

  12. Christina D says:

    Eating out is still a lot cheaper than therapy.

  13. Kalen says:

    This is a great article! It seems like eating out is so common that people who are broke still budget insane amounts for it every month. It wasn’t until my wife and I drastically cut back eating out that we were able to get out of debt. Also, eating out is much more special when you don’t do it every single night.

  14. Marie @ 4HWD says:

    This is the best advantage of working from home, you will not have to worry about your meals. But once in a while I want to eat out at a fast food chain or in a restaurant just for a change from my daily routine.

  15. J says:

    I tallied our restaurant spending a while back and it came to over $500 a month. That was separate from grocery store spending. With that in mind we created a hard and fast rule: we will eat at restaurants no more than two meals a week. We usually choose Friday night and Saturday night, but it varies. Since we put this rule into place, we’ve spent around $250 per month an restaurants. Two hundred fifty a month is a lot of money that we can find all sorts of good uses for!

  16. Ann Shirley says:

    Great post! I really enjoying going out to eat…but I make it a treat. I typically only go out to celebrate events with family and friends and rarely eat out more than once a month. It is definitely costly especially if you order drinks out. When I do go out to eat I usually opt for cheaper places such as diners to keep the bill down. When it comes down to it though, both my wallet and I prefer to just have a home cooked meal. 🙂

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