Saving Pennies or Dollars is a new semi-regular series on The Simple Dollar, inspired by a great discussion on The Simple Dollar’s Facebook page concerning frugal tactics that might not really save that much money. I’m going to take some of the scenarios described by the readers there and try to break down the numbers to see if the savings is really worth the time invested.
Charlie writes in: I can pretty consistently get 50% off discounts on meals at neighborhood restaurants. As a single guy, I can’t believe this isn’t a big saver over making the same meal at home.
The direct response I’d make to this question is “What neighborhood restaurants are you getting this kind of discount at?” Without that information, it’s really hard to quantify how much you’re saving at home or at a restaurant.
So, in order to look more carefully at this, I went and looked at the menu of one of the most popular chain restaurants around, Applebees. You can look at their menu here.
If you take the prices of many of these meals, eliminate half of the value, and compare them to the cost of making them at home, the prices are pretty similar. I did some back-of-the-envelope calculations comparing various sandwiches and entrees to my best estimate of what you’d have to invest to make a similar meal at home and the results were similar.
However, the restaurant experience has some additional costs. If you drink anything besides water, you’re going to be paying quite a bit more for that than it would cost you at home. You have the cost of the tip. You have the cost of driving to and from the restaurant (and a mile in your car costs you about $0.50 when you figure in all of the factors). Those are going to be on top of your basic meal cost – and they tip the scale toward eating at home.
The biggest factor that people always mention is time when it comes to eating out. It’s probably quicker to eat out if you’re going through a drive-thru, but if you’re dining at a restaurant, you have to include the time spent getting there, going into the restaurant and to your seat, ordering, waiting for your food, waiting for the waitstaff to handle your ticket after you’re done eating, going out to your vehicle, and driving home. That time really adds up.
Again, it’s very difficult to precisely quantify all of these things because they vary so much from specific situation to specific situation, but even with the 50% discount, I would generally say that the time invested in eating out and eating at home is roughly equal and the cost of dining out is more.
So, why eat out? Simply put, it’s far more relaxing. If I go out to eat by myself (which I do every once in a great while if I’m traveling or have a packed day schedule), I can just sit there and read a book (which is what I usually do) instead of preparing food. If I go out to eat with others, we can just sit there and enjoy each other’s company.
Most of the time, I’d rather prepare food at home as I enjoy the process and it is less expensive. We often turn it into a family activity, where the children are setting the table and Sarah and I are working together to get a meal on the table. Even for meals when I’m at home alone, I’d still rather prepare myself something simple, like scrambled eggs. Not only that, I have control over the ingredients. I get to decide what’s in the food, something I don’t have control over at a restaurant.
The reason to eat at a restaurant is the experience. You get to sit there and enjoy a solitary activity or the company of others while your food is prepared. That comes at a cost, even with a 50% off coupon for the meal. Sometimes, there’s also the factor of eating an exceptional meal, but when you do that, you’re often paying an additional premium.
If you have a chance to get a restaurant discount, great. However, even with a steady supply of coupons, the cost of always eating out doesn’t add up.