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How Much Should I Budget for Eating Out?

Hint: What are You Really Craving?

Ah, the unwieldy eating out budget. Feel like it’s out of control? Well, you’re certainly not the only one. And you’ve come to the right place.

The average American dines out 5.9 times per week and according to 2021 BLS data, the average household spends about $3,500 on eating out every year, or just shy of $300 per month.

But before you go setting your budget at a neat and tidy $300/month and move on, there’s a more important question you should be asking. What are you really craving?

Spending a huge amount of money on dining and takeout is an easy trap to fall into for a lot of us. We get coffee on the go, grab lunch with friends and leave work too tired to cook at home. Over the course of a month, all that eating out can really take a bite out of your budget.

If your restaurant dining is keeping you from reaching your financial goals, it may help to ask yourself…

What Are You Really Buying?

Your restaurant budget is just a microcosm of your total budget—its job is to help you organize your dollars to best support your priorities. So, when you spend on food away from home, what priorities are you satisfying? (This isn’t just about a full belly!)

To answer this question, turn a critical eye to your motivation. The restaurant gets your dollars, but what’s the best part of the trade for you? If it’s not the food, then maybe it’s:

  • A treat to get you through your commute or workday afternoon (a break/distraction)
  • Quality time with coworkers and friends at happy hour (closer bonds/time to socialize)
  • Outsourced meal-planning (less to do/automation)
  • The game to save even more money with restaurant offers and discounts (the thrill of getting the deal)
  • A helpful option when you need the convenience

In these examples, the food is secondary, and there might be a less expensive way to get the thing you truly want.

Find a Budget-Friendly Alternative

To move the needle towards more satisfaction for less money, try a budget-friendly substitution:

A Treat

If your morning coffee is the carrot you need to get out of the house on time for work, how about a lesser splurge? Would the cost of a good thermos and a reasonably-priced brand of coffee entice you? Make a daily ritual of waking up early enough to prepare and enjoy the coffee. Pick a spot that’s agreeable—it doesn’t have to be in your kitchen, or even in your home.

If your afternoon snack is just the excuse you need to take a break, then buy treats at the grocery store, and keep them in your desk. Or replace your snack with a walk!

Quality Time

Instead of eating lunch at restaurants with your favorite coworkers, maybe you could meet them in the park or cafeteria (so that budgeters can brown-bag it).

If your weekends are the problem, why not invite friends over for a potluck? Or you can grab take-out together. Even if you spend a little money on the spread, staying in can be far less expensive than a night out on the town.

Outsourced Meal Planning

If your transaction history is full of mid-priced family restaurants, then meal-planning may be your weak link. Make it easy, and commit to themes! I’ve never heard anyone groan about Taco Tuesday. While you’re at it, how about pasta on Wednesday and stir-fry on Friday (stir-Fridays)?

Choose some easy-to-fix favorites and you’ll always have a plan that gets you into your kitchen, even when you’ve had a hectic day. Toss in a grocery store rotisserie chicken night, and you’ve nearly got the week covered and it’s money spent well for convenience!

Or plan one big batch of something that you can cook on Sunday—make enough to cover meals for at least a few nights. You could also compare the cost of a meal-planning service that delivers everything you need right to your door.

Dig in to Your Food Budget

To supercharge your focus on cutting down your food spending, try reorganizing your budget to highlight the reasons that you spend at restaurants. Here’s how it works:

Scrutinize Your Spending History

Spend 10 minutes reviewing where you spend money most on food. If you use a budgeting app like YNAB, you can easily tap on the dollar amount next to your activity to see your transactions:

A screenshot showing a savings target set to budget for eating out

If not, just pull up a recent credit card statement and scroll through it.

Do you see a ton of Dunkin’ Donuts? Loads of Chipotle? Or a surge in weekend spending? Make a note of your motivation (treats, socializing, automation or something else).

Now, write down no more than three priorities that you cater to when you spend your ‘Dining Out’ dollars. Which one do you spend the most on? Does your spending reflect choices that are aligned with your priorities?

Prioritize Your Dining Out Dollars Even Further

Split up food spending even further with a category group for Dining Out.

A gif showing budget categories being created for different types of eating out

Under this group, make a list of your your most common underlying priorities:

  • Time with friends
  • Work Lunches
  • Fast Food
  • Date night
  • Convenience
  • Coffee Break
A budget screenshot showing categories for time with friends, work lunches, fast foot, etc.

Put Your Money Where Your Priorities Are

Now, it’s time to align the ‘Dining Out’ money that you have left for this month with your new ‘Dining Out’ categories—or, as we like to say, it’s time to “budget.”

When it’s time to budget next month, you’ve got a much clearer framework for your priorities, so allocate your dollars, accordingly! How much do you want to spend on these new categories? How can you stretch your money a bit further?

A Final Tip

While this might seem a little too granular that what you’re used to, it can help get to the root of what you truly want and give you a way to line up your dollars to get there.

If your eating out budget is far more than average, or far less—it’s all up to you and your priorities.

Not using a zero-based budget to get this kind of clarity in your own personal finance? Try YNAB free today!

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