We are excited for this opportunity to partner with Prudence Zhu, Founder of Baoba USA. This guest article will be one of six co-written pieces that we will be featuring.
The convenience and experience of dining out or ordering in have made ‘meals away from home’ an integral part of our modern lifestyles. However, the financial toll of these decisions often goes unnoticed. With Americans allocating a significant portion of their income to dining out, it’s crucial to understand the hidden costs behind this habit and explore budget-friendly alternatives.
According to the Bureau of Labor Statistics, as of 2021, the average American household spent nearly $3,526 per year on dining out. This accounted for approximately 5% of the total annual expenditure for an average household. These figures have risen over the years, fueled by the rise of food delivery services and an increasing trend towards convenience.
The cost of dining out encompasses several hidden factors:
1. Food and Drink Markup: Restaurants mark up the price of food items significantly, often upwards of 60-70%. This gross margin covers the cost of ingredients, preparation, presentation, and service. Drinks, particularly alcoholic beverages, have an even higher markup, sometimes as high as 300-400%, making them one of the highest priced items on the menu.
2. Operational Costs: On average, operational costs like rent, utilities, labor, insurance, and other overhead expenses amount to 35% or more of the cost of dining out. According to a 2018 report by Restaurant Business Online, rent alone accounts for, on average, 8.3% of sales for restaurants in the U.S. And in High-rent areas such as Chicago, it could be as high as 15%.
3. Tipping: In the U.S. it’s customary to tip 15-20% of the total bill when dining out, which further increases the cost of your meal.
Given these factors, a significant portion of what you pay for meals away from home is not for the food itself but for the associated costs. By reducing the frequency of dining out, you can make substantial savings.
Here are some budget-friendly alternatives to dining out:
1. Cooking at Home: Preparing meals at home is cost-effective and allows you to control the ingredients and portion sizes. Plus, you can create a restaurant-like ambiance at home for special occasions.
2. Pack Your Lunch: Instead of buying lunch every day, try packing your lunch. This simple change can save you time and a significant amount of money in the long run.
3. Home Parties: Instead of meeting friends at a restaurant, host a potluck dinner. Everyone can bring a dish, which spreads the cost and allows everyone to showcase their culinary skills.
4. Picnics: A picnic in a local park is a great way to enjoy a meal in a relaxed setting. You can prepare simple, delicious food at home and enjoy it outdoors.
5. BYOB Restaurants: If you enjoy having a drink with your meal, consider restaurants that allow you to bring your own bottle (BYOB). You may have to pay a corkage fee, but it’s usually significantly less than the cost of buying drinks at the restaurant.
6. Discounts and Deals: When you do eat out, make use of discounts, deals, or specials. Many restaurants offer ‘happy hours’ at reduced prices.
7. Improve Your Cooking Skills: If you’re not confident in the kitchen, take some time to learn basic cooking techniques. There are many free online resources to help you.
In conclusion, while dining out provides a break from cooking and a chance to socialize, it can take a significant bite out of your budget. By understanding the hidden costs associated with meals away from home and exploring alternatives, you can enjoy good food and company without financial strain. Remember, every little change can add up to big savings over time, leading to a healthier financial – and physical – state.