Taco Bell, McDonald’s, Wendy’s, BK, Schlotzsky’s, Red Lobster, Chili’s, Panda Express, Olive Garden, Dairy Queen, Denny’s, KFC, and even Long John Silver’s, are all like members of the family to many of us. As Americans, we love to eat out. Despite the recent Great Recession, the typical U.S. adult eats out at restaurants an average of 4.8 times every week. Over half of those restaurant visits are for lunches, followed by dinner out and nearly once a week we have breakfast out (Living Social Dining out Survey, 2011).
The restaurant industry took a “hit” during the recession but is roaring back as Americans open their pocketbooks as the economic storm clouds slowly dissipate. Restaurant sales are estimated to reach $632 billion in 2012. There are approximately 970,000 restaurants in the U.S. who employ 12.9 million workers. We spend $1.7 billion during a typical day on meals out and the restaurant industry job growth has outpaced the U.S. economy for the past 12 years. We spend roughly half of our food budget on dining out (National Restaurant Association, 2012).
Let’s face it, we love to eat and don’t like to cook. Both of these propensities can have disastrous effects on our waistlines and pocketbooks. If you’re a regular reader of the Shiny Objects blog, you know where this discussion is headed. Let’s take for example a recent dinner out for the Roberts family of four. Allow me to preface this story by saying that the Roberts clan only eats dinner out once a week – usually Saturday nights. Because we were celebrating we went to Olive Garden. We had sworn it off previously because it’s too expensive – particularly for pasta dishes which cost the restaurant only pennies. Well, this meal totaled $65 including tip. And, we all had agua – no drinks which as you know would have added $10.00 to the bill (for sodas or tea not the hard stuff). If you’re like us you can’t out of good conscience buy soda for $2.50 when it costs the restaurant about .15 – .20 cents.
So, this started me thinking about how we could make better use of our money than the temporary enjoyment of a good meal out. Setting aside the argument that restaurant food packs a lot more calories than home-cooked meals, the financial implications of our decision to dine out can be staggering – it’s all about opportunity costs.
What could we do with the money we save from eating at home instead of at restaurants? If we cut back only three meals out a week we would all be burgeoning Rockefellers. Let’s assume that a family of four can barely get by for $40 or less for a typical dinner out (no drinks, please). Subtract from the $40 the $10 it would take to feed the family at home and you have a net savings of $30 for each meal out. That’s a savings of $90 per week if we ate at home three times per week instead of eating out.
Getting out my future value calculator, that would mean a nest egg of $186,057.30 over a 20-year time period at a 6 % rate of return, $412,049.52 over a 30-year time period, and $833,678.83 over a 40-year time frame. Definitely, food for thought.