We went to an “upscale” restaurant with friends yesterday. We don't eat out often (maybe a few times a year) so spending $100 AUD for the two of us didn't do a lot of damage to our finances, however I couldn't help but notice again how little value you get for your money when eating out in a restaurant. Obviously cheap food joints offer much better value and cooking food yourself is still better. The food in the restaurant was nice and all but not too special. Spending the same $100 AUD in a grocery store could get us:
- 30 pineapples or
- 50 avocados or
- 30kg of apples or
- 2 kg of quality lamb meat, a few kg of various vegetables and a few kg of various fruit, which can feed us for breakfast, lunch and dinner for 5-6 days.
From a nutritional and financial point of view a single meal for $100 is clearly insane. We ate too much and drank a bit of alcohol after which my wife got a headache so ultimately the meal was not good for our bodies. Doing it infrequently, like 5-6 times a year is not too bad financially, but I'd still prefer to spread that money over more than just a couple of meals. I feel I'd get more enjoyment out of it if we spend $30-$40 per outing and increase the frequency of outings. Of course, spending so much money per year on eating out is in itself very spendy so ultimately it's even better for your wallet to limit per outing expense and the number of outings.
If you actually calculate how much of your so-called disposable income eating out is, you may be in for a surprise. Let's say you earn $100k AUD/year. Your example expenses may look like:
- taxes: $27k AUD
- accommodation; $30k AUD ($2.5k AUD/month is not even considered expensive for Sydney)
- food: $12k AUD
- other misc stuff: let's assume $12k AUD
That adds up to $81k AU, rounding down to $80k AUD, which leaves you with $20k AUD of disposable income. If you spend $1k AUD on eating out per year (which is $83 AUD/month) you're spending 5% of your discretionary money. That's a lot of money for a few meals, which can just as well be skipped with no harm to your health and actually improving your finances. Instead, I prefer to host friends at our home or have a picnic at the park or at the beach and be much happier and healthier for it.
The answer to the question in the title of this blog entry is not that it depends (I won't give you an excuse to eat out :-)) but that it can be a surprisingly big chunk of your hard-earned money without providing you with much benefit.