Are you eating away your retirement?

Picking up a cup of coffee on your way to work? Going out to eat this weekend? Before you drop $5 on that venti caramel frappuccino or $30 on a night out, make sure you’re not eating away your retirement. A few weeks ago, Emily and I went through our June budget and noticed that we had spent over $750 dollars that month on food. $750 dollars! After going through our budget we realized the culprit was eating food outside the home (i.e. “eating out”), instead of cooking at home.

For us, “eating out” is anything from going to lunch after church to buying frozen yogurt after a weekend bike ride. Whatever the reason, we looked at our spending, looked at the long term implications, and decided that in order to be financially independent, we had to limit our dining out budget. Whether you’re trying to retire early or not, the costs of eating will have long lasting effects, and could be eating away at your retirement.


How Emily & I measure up

The bureau of labor and statistics did a study in 2010 that looked at the average annual expenditures, ranging from low-income earners to high incomes earners. High income earners were defined to have a pre-tax income of about $94,000.

What I’m going to use as an example, though, is the average according to this study, which would be a family that has an average income of roughly $47,000.

The results are shocking! The average family with a household income of$47,000 spends roughly 40% of their food expenses on dining out! How does that compare with my family?

Unfortunately, we played our part in the statistic!  As I said earlier, Emily and I spent $750 dollars on food in June. Out of that $750, we spent $350 dollars on dining out, which was roughly 50% of our total food expenditures. WOW! How did we spend 50% of our total food expenditures on dining outside the home? The answer is simple, we didn’t “measure” or budget out what we spent. Our family aims to save roughly 50% of our income, and after that we have some leeway in how we spend the rest. Unfortunately, that month we spent WAY over what we should have on dining out. Part of that was the family vacation we took to Florida, where we spent about $150 on food expenses for the week. Nonetheless, our dining rate was high.


The costs of dining out

From the same study mentioned above, the bureau of labor and statistics showed that the average household spends $2200 a year solely in dining out. Assuming you “dined out” every single week, that equates to $42 dollars a week. Assuming you dined out every day, that equates to about $6 dollars a day. So, let’s assume you’re the average American that spends $42 dollars a week dining out.

It’s no secret that eating out is more expensive. You are paying for the convenience of not having to cook at home. But, is it really all that great? Add to that the costs of appetizers, tipping, the high mark up on sodas and you’ll soon realize that your $15 meal can turn into a $30 dining extravaganza, for just one person!


Can I get my retirement “to-go”?

Let’s look at the opportunity cost of eating out. Assume that you’re the average family that spends $2,200 a year on eating out. Instead of eating out, what if you all ate at home and invested that money. Let’s make sure we realize we couldn’t invest all of that money. You would need to use some of that for meals at home. So, let’s say that you spent $400 of that money throughout the year, which left you with $1800 of that to invest.

Let’s say on your 30th birthday you start investing that $1800 each year in a low cost index fund (VTSAX). Let’s assume you get a modest 6% return on your investment each year. On your 50th birthday, that investment would have grown to $73,000! That’s a pretty nice nest egg just for eating at home! Here’s where it gets fun, on your 65th birthday, that would have grown to almost $250,000! So, you tell me, is your retirement really worth going out to eat every week?


But I love dining out!

If you really must dine out, here are some money saving tips that will let you get the dining experience without breaking the bank:

  • Don’t eat out as often -> If you currently go out to eat 3 – 4 times a week, cut it back to 1 – 2 times a week
  • Drink water -> It’s free
  • Share a meal -> Enjoy the free bread/butter or chips/salsa that come before your meal and share your entree
  • Kids eat free -> If you have kids, find restaurants that offer a “kids eat free” option (try Usually “kids eat free” days are on a certain day of the week or a certain time of day.
  • Be intentional -> When you have time to plan before dining out, use or to save up to 50% off your bill
  • Use gift cards -> Many restaurants will have sales like “Buy a $20 gift card, get a $5 gift card free”. Sometimes the free gift card will have to be used at a later date, but if you really like that restaurant it can pay to stock up and save.
    • Another option is to check out, where other people sell their unused gift cards at a discount. Discounts can range anywhere from 5% – 30% off the original price of the gift card.


There are ways to save if you do feel that dining out for you is a social activity or brings you joy. Whether you are seeking financial independence or just want to shave a few years off your retirement number, I hope this sheds some light on the power that “dining in” can have on your budget and your early retirement goals. For those of you that don’t have a budget, check out my post on budgeting, where I talk about how we budget and why a budget is crucial to building wealth.


How often to you dine out? How much do you normally spend each month eating outside the home?




  • How often we dine out really depends a lot on how crazy our life is at the moment. If we are organized enough to have some pre-made food in the refrigerator or freezer that heats up nicely, makes it a lot easier to skip eating out just for convenience.

    And when we do eat out, we often share the entree like you talk about. Most of the point of eating out is the experience at that time, not the leftovers, so it makes more sense to buy enough to eat at that moment, and not take home doggy bags.

    • Indeed! We love Aldi’s frozen food section, great to heat up one of their pre-made meals if we’re too tired to cook. And most definitely, sharing the meal still gives us the “experience” of eating out without keeping leftovers in the fridge.

  • You’re totally hitting the nail on the head with this topic. I used to work with a guy who told me he and his wife spent $1,000 per month on going out for food. Really?! $1,000??

    Maybe I’m just getting older or becoming more set in my ways, but I actually believe my wife’s cooking tastes far better than what most restaurants try to pass off on to their customers. Plus, she’s very health conscious, so I know its with good ingredients like low fat meats and cheeses.

    My family and I totally rock the “we’ll just have water” trick. It literally saves our family of 4 about $12 every time we go out to dinner (which isn’t often).

    • Hi MyMoneyDesign, thanks for the comment. $1000 on going out! yeah that seems pretty high. That’s a good point I hadn’t thought of as far as knowing exactly what’s in your food, eating at home definitely helps to cater to specific tastes / diet. The hardest part was converting from dining out being our fall back habit. Now that we’re in the habit of eating at home, it’s our “go-to” food source.

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