Dining Yourself into Debt

When you have a busy lifestyle, it’s easy to justify a quick run to Dunkin Donuts on the way to work, McDonalds for lunch or even an evening out at the local restaurant with the family. It’s common sense that dining out is going to be more expensive than dining at home. You might pull out the credit card instead of cash or debit card because it’s convenient. However, these daily or weekly expenses add up over time. You may find yourself dining yourself into debt.

According to the Consumer Expenditure Survey of 2009, Americans spend on average $2,619 per year eating out. That’s just over $50 per week, which could be dinner out with the family once per week or your morning Starbucks run and daily lunch with the co-workers. If you’re dining out more often or spending more, then you’re yearly expenditure on dining out is going to be even higher.

Now, you might be sitting there thinking, “I don’t eat out that much.” But do you really keep track of it? Many budgets get broke not from the big ticket items, but from small things, like dining out. A good way to see if you’re dining yourself into debt is to:

• Start Tracking How Much You Spend – Set aside an envelope or go into your online banking on a daily basis and start tagging the dining out expenses. After two to four weeks, add up the totals and see how much you’re spending.
• Compare Your Spending to Other Expenses – Estimate your monthly dining out and other expenses. Figure out what percentage of your expenses are food-related (both eating out and grocery store). If you’re spending more than 16% of your monthly income on food, then you’re spending more than the average American.
• Look for Ways to Cut Back on Eating Out – Sometimes just getting up fifteen minutes earlier can save you from that early breakfast drive-thru, or lunch out with the co-workers. Consider quick, easy recipes for dinner that take less than thirty minutes to prepare.
• Invest That Extra Money into Paying Off Your Debt – Take what you save by eating in, and put it towards paying down your credit card debt.

The less you eat out, the more you save. If you save $50/week on dining out, then you could potentially be putting $2,619 towards paying off your credit card debt or putting it away in an emergency fund. Yes, it may be less convenient; however, its money well saved towards something more important, your financial peace of mind.

About the Author

The following post is from Kathryn Katz, a Certified Personal Finance Counselor who works for Consolidated Credit in Ft. Lauderdale, Florida. Their credit counseling agency helps families through financial crisis using credit counseling, debt consolidation and financial education.