Are Restaurants Keeping You Broke Eating Out vs Home Cooking

 I'm gonna get a hot dog and beer, I'm gonna see how much it costs. So I'm gonna do one D-back dog and a Miller light. 2278. 2278. Thank you very much. So I just paid $6 for a hot dog. Hot dog buns usually cost 15 cents. The hot dog costs about 25 cents. So in total, this is about a markup of 1700% on just the hot dog. I paid $14 for this beer. Traditionally, it would cost about $2 if you bought it in bulk. Meaning it's a markup of 700%. So for ballpark food, you can expect a markup of 700 to 1700%. But it's all for the love of the game. Hey everyone, my name's Caleb Williams and this is BetterWolfRiacs. And that was my good friend, Johnny Finance. He just is an amazing video creator. And I saw this on Instagram and I was like, man, that is a really, really good video. And it made me think, what if I did a BetterWolfRiacs too? Is eating out, keeping you poor? Because Johnny does a great job. And that one clip is like pretty eye opening from a standpoint of going to a ballpark. But there's a common theme out there that's saying, hey, we got a cut back. We have to not go out to eat and we can save all this money. And what I want to do is I'm going to pull up another video with that. Actually PBS did the two cents people who are like really harsh on life insurance. And I reacted to one of their life insurance videos. They have an eating out video that I think does a really good job laying the foundation of the conversation. And what I will do like all of my BetterWolfRiacs is I'll give my two cents. No pun intended throughout the video, but that I'll give you my closing thoughts from a standpoint of do I think eating out is keeping you poor? Maybe my framework to when you should eat out, when you shouldn't. And maybe some good questions for you to consider before you decide I'm going to cut back or I'm going to eat out a lot more. So without further ado, let's jump into this next video. I just love this place. Don't you? I know it's kind of expensive, but everything's so top notch. Hey folks, know what you want? Yes, I'd like to eat the down payment on a house with a side of the Lombard Emergency Ben. Oh, so in choice. And for you, sir, I'm pretty hungry. So I'm going to have our retirement savings and what the heck, a bottle of our daughter's college tuition. Very good. Do you think we spend too much on dining out? Maybe, but everyone else is doing it besides what's the alternative? Cooking at home? At least the breadsticks are free. 21% of Americans have no retirement savings and another 10% have less than $5,000. It's even bleaker from millennials. Nearly six and 10 have nothing saved at all. Now, there are a lot of reasons for this, the increasing cost of housing, health insurance, and of course student debt. But for many people, those costs are relatively fixed. If you're looking for practical areas to cut back, one sticks out like a fly in your suit dining out. In 2015, for the first time in history, Americans spent more money on bars and restaurants than on groceries. With the average household now spending, we're the $3,000 annually on food away from home, representing between five and seven percent of their total spending. Even the restaurant prices are increasing faster than inflation and grocery prices are holding steady, or even falling, the average diner is still leading out around five times a week. How much is this costing us? Well, restaurants typically mark up their food by around 300%. Meaning the price on the menu is about three times what they actually spent on the food. Ball parks are a lot more hence Johnny Fanon's video, but yeah, 300% that's a quite a bit. If that seems like a lot, remember, you're also paying for the restaurant's rent, labor, equipment, and overhead. So if you live in an area where real estate values are increasing, that also applies to the surface area of your local restaurants' table tops. You're also tipping, which I did a video, uh, reacting to Matt Walls when he talks about the tipping culture and how it's kind of gotten out of hand. So you're tipping on top of eating food that's 300% more marked up. And that doesn't even include drinks. A survey by Zagat found the average restaurant bill per person is over $36. If you do this just three times a week, I though we're $5,600 a year. By contrast, the average meal cooked at home with groceries from the market is about $4 a person. Now you can see why so many financial advisors focus on dining out as a place to save money. How much money could you potentially save? I think it's time to run the numbers. Let's say Jake here goes out for dinner three times a week, spending $35 each time. He starts every work day with a latte and croissant at his local coffee shop and buys lunch. And a coffee will get you, I'm glad they mention that. Lunch at the local food court four days a week, Fridays or pizza day at the office. In one year, he spent over $9,000 on commercially prepared food and drinks over 12% of his yearly salary of $75,000. What if Jake could get those three dinners down to just one a week? And what if he started making coffee in breakfast at home and brown bag lunches at work? Assuming that all those homemade meals would come out to around $5 each, that would mean a yearly savings of $4,420. That's enough for a Hawaiian vacation. But wait, we're not done. What if Jake took those yearly savings and put them into an account earning 7% compound interest? In just 10 years, he'd have over $65,000. Enough for a down payment on a house. In 20 years, he'd have almost $200,000. All from just eating at home more often. Jake's example demonstrates that even in an era of burdensome healthcare and student loan obligations, you might have some wiggle room in your finances. Even a small cut back in dining out could allow you to finally pay off an onerous debt or build an emergency fund. This might be easy advice to give, but harder to put into practice. Many of us die now because we're too busy or tired to cook after a long day of work. If we now had a cook at all and going to restaurants isn't just about the food, it's a social event. We'll say I got extremely, extremely, extremely whether you call it lucky or blessed. My wife is an amazing cook and she is into cooking really clean, healthy food. So it's actually for me. It's a no brainer because I get to eat better and cheaper when we're doing at home. But the struggle is real as many of you have very busy lives. You're doing a lot of other things and there is a true opportunity cost to actually cooking at home, which we'll talk about in a second. A place to see your friends, to connect with co-workers, take the edge of a stressful day. So we're not saying never go out to eat. But if you want to cut down on this expense, you first have to know why you're spending the money. Intentional. In the first place, is it a convenience or luxury? Yeah, it's a convenience. In other words, if you're eating out because you don't have time to cook at home, well, the problem might be a lack of preparation. After all, brewing a pot of coffee and toasting a bagel can be less time consuming than waiting at a Starbucks line and can potentially save you hundreds of dollars. There are lots of resources on the web for how to make shopping and cooking cheap and simple, including this video we made about navigating the supermarket. But if you're still intimidated by the prospect, you could ease yourself into it by utilizing an ingredient or grocery delivery services like Blue Apron or Instacart. These are definitely more expensive than doing your own shopping, but still cheaper than eating out. If time is something that is like up there, we get all of our groceries delivered other than produce. But we get, yeah, all of ours delivered and it's amazing when I go and travel instead of me going and eating out. And I do it for a different reason. It's mostly for health conscious reasons. I'll usually go travel, get to our dash, I'll get groceries delivered to me and it's incredible. It's like almost feels illegal. I'm like, man, I got healthy food delivered to my hotel. It's incredible. And so the idea that we can get healthy food delivered to us could really eliminate a lot of the excuses that time is an issue. We like to use cash at the supermarket to stay within a budget. But if you're trying to incentivize yourself, you could look into a credit card that gives rewards for grocery purchases. And it's always a good idea to keep some convenience foods like microwavable dinners in your freezer. That way, on days that you really don't feel like cooking, you'll have an alternative to stopping for takeout or ordering it. On the other hand, if eating out is a bloodshed, that is, if you're doing it for social or psychological needs, there still might be ways to achieve that with less spending. For instance, you can share an entree. Restaurant portions are typically much larger than the average diners appetite because it makes it easier for businesses to justify high prices. If you're there for the service and atmosphere, you can get that without overeating to the point of discomfort or leaving any food behind. If you have favorite restaurants you know you visit often, it might be a good idea to sign up for their email lists or check group on for details. But beware that these bargains are intended to make you visit more frequently. Yeah, I was about to say you're in the funnel. I will also say and they might cover this is don't drink. Like I'm all about you know a nice glass of wine or whatnot, but like drinking adds up as well. And so you could totally go and yeah, but if you're willing to split an entree just for and that could be an amazing way to still hang out with people but not have a 35, 40, $50 per meal. Same goes for diners rewards cards. If you're not careful, these strategies might actually increase your monthly dining expenses. Alcohol is one of the biggest markets for restaurants. So if you like to have a drink with dinner, you might want to find places that allow you to be Y-O-B. Similarly, going to an ice cream shop after dinner is usually much cheaper than ordering dessert at the table. And lastly, if you find yourself buying lunch just as an excuse to get out of the office, no one's forcing you to eat at your desk. Hopefully. Take your brown bag to a nearby park or public space. It's the same psychological benefit without the cost. Dining out is a big part of our culture and it may be an important aspect of your social or professional life. So we're not suggesting you cut it out cold turkey. But you shouldn't accept any large regular expense without asking yourself three fundamental questions. How much am I spending on this? What do I get out of it and can I get the same benefit for less money? That's good and that's our two cents. Like I said, and I even said this on their life insurance video, they're very harsh on life insurance. And I was like, guys, you did a phenomenal job. I think it's super well produced, well thought through. Here's my final thoughts from a standpoint of the whole eating out. There's a couple of type of people watching this. If you're someone who's really trying to save money, you're someone that your financial framework is shrinking and saving to be able to like get to where you want to go. And you're looking at how I can save money by all means look at where you're spending it and you might be overspending on drinks, you might be overspending on food and that might be an area that you should cut back and I will be your number one sand to say live intentionally. Also, my whole deal is like, hey, listen, if you enjoy eating out and you're an entrepreneur and you can easily say, yeah, I'm going to spend $10,000 throughout the year eating out. But by not having to worry about food, I'm going to be able to produce 20 or $30,000. You just need to see eating out as another expense just like when we hire people or go to a conference or invest in a software. That's how you have to look at it. If you're an entrepreneur looking at the eating out conversation, you should look at it a lot different. I could make the argument that you shouldn't cook that you should overpay to have people cook for you. If you can do something more productive with that time. Now I hesitate in saying that because being into health, it's hard for me to justify eating out because there's very few restaurants that actually serve you good food. So in summary, if you're someone that's not entrepreneurial, you're looking at it as an appeared expense and you're trying to cut back, I think eating out is the number one thing that you can look at and get really intentional and say, how can I, how can I cut back? How can I be intentional? And I think this video does a phenomenal job. If you're on the flip side, if you're into creating massive value and eating out is something that you enjoy, I would say just really get clear about what you have to produce. If you're going to choose that decision and if it costs you 10 or 15,000 dollars a year, just make sure that the activity that you can make that up by not having to cook. I love to hear your thoughts. What is your framework as it relates to the eating out staying in because again, I am always fighting my scarcity minded penny pinching, you know, self. But the shift for me is saying, okay, if I'm in this is going to be really, really key. If you are in abundance, you're going to attract so many other things in your life. But if you're in scarcity, if you're always trying to penny pinch and figure out how to save money, you're going to miss out on so many cool opportunities because you're trying to figure out and shrink and slave as my good friend, Gary Gunnerson said, it's hard to shrink your weight to wealth. And so I think it's, it's something that I'm being really, really intentional in. And I'm saying, hey, I don't, I don't want to shrink my way to wealth, but I also want to be intentional how I spend my time and money. And so with that, love to hear your thoughts. Again, if you had no other videos or other topics that you would like me to cover, please, please let me know. And by you liking and sharing our content, you're really helping better wealth, get their name out to more people. That's why I'm doing better wealth reacts because I find that there's so many incredible content creators. There's so many other opinions out there that I want to just react and bring more exposure to all the different conversations as well. And I think that's why I'm doing better wealth reacts to all the different conversations as relates to helping you live more intentionally.