Restaurant Spending: How Much Are Americans Really Spending Out?

Talk about a real budget-buster. Why not tighten your belt?

Talk about a real budget-buster. Why not tighten your belt?

Most of us manage our expenses to ensure we're not going overboard and risking debt. But new research compiled by The Ascent reveals that Americans are busting their budgets in one category: restaurants.

The high cost of prepared food

The typical consumer spends $288 per month eating out. That’s 5.6% of the average U.S. adult's total spending. It's also, to a large extent, a waste.

The problem with restaurants? They charge a huge markup. You'll see different figures thrown around, but the most common is 300%, which means that a $40 restaurant meal can be prepared at home for $10. Someone who spends $288 a month dining out could save 75% of that, or $216, by cooking at home rather than paying a premium to have those meals prepared in a commercial kitchen.

What could more savings do for you?

If you spend around $288 a month on restaurants, think about what an extra $216 per month, or nearly $2,600 a year, could do for you. Maybe it could help you pad your savings account if you're not happy with your current balance, or if you don't have a solid emergency fund (enough to cover at least three months of living expenses). Or maybe that money could help you reduce costly debt, save for a down payment on a home, start a nest egg for retirement, or sock away cash for your children's college education so that they -- and you -- aren't forced to take out a mountain of student loans.

Think about your most pressing financial goals. Chances are, an extra $216 could help you meet them sooner. 

Slimming down the budget

Of course, people don't eat out to get a bargain. They want to be social, or to enjoy food they can’t easily make themselves. Some people just don’t want the hassle of cooking.

There's nothing wrong with spending some money on restaurants if you don’t stretch your overall budget thin. In addition to that $288 a month on restaurants, the typical consumer spends $269 on entertainment. If you really love dining out but need a financial boost, consider cutting back on other leisure. Dining and entertainment are the categories you should have the most flexibility with, so be mindful of keeping them at a reasonable level.

Even $288 to dine out isn’t necessarily so bad if you're solid on savings, have no unhealthy debt, and are on-track with your financial goals. Still -- if you want a boost, consider at least cutting back on restaurants. You may miss the fun and convenience, but once you see what it does for your finances, you probably won’t bemoan that choice.