Why eating out is unwise when trying to build a cash reserve
Eating out when you are trying to build a cash reserve is unwise for one simple reason: The cost to eat one meal out often is identical to the cost of feeding yourself for a whole week were you to fix your food at home.
The premium of eating out is high. While there are many benefits to eating out, emotionally, and physically, financially there are none. So, while trying to build a cash reserve quickly, this is one of the best changes to make to your lifestyle. Let's look at some specifics of why eliminating eating out can help you to build a cash reserve faster:
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- If you eat in you do not pay a service charge: In addition to the inflated cost of the food, which you pay at a restaurant, you also have to pay a service charge for the service of the person taking your order, keeping your drinks full, bringing you your food, and running your card, or changing out your cash at the end of the meal. The typical tip is no less than 15%, unless the service was really poor, and usually is closer to 20% of your meal price.
- If you eat in you aren't paying inflated prices. When you eat out, you pay far more than the value of the food. How else would a restaurant cover its overhead expenses? manager salaries? cooks and dishwasher wages? etc. When you fix your own food, you pay for the cost of the food, and you pay in some of your own time. However, that time is not going to be any more than if you were to eat out, really, as you have to wait for the food to be prepared. So really, you pay for the food, and with a little effort on your part. If you were to eat out for lunch, you might spend $12, when all is said and done. If you were to eat in, $12 could cover the cost of all of your meals for the day, several snacks, and the fuel it took to get to the grocery store.
- Habits are hard to break. Besides the numbers involved with eating out, and paying far more for a soda, or a potato, etc. than you should be paying, there is the emotional side that leads to more difficulty curbing spending, and more difficulty finding ways to save money. When you give in to the convenience of eating out, you undermine your money attitude that is helping you to build your cash reserve. If you get in the habit of spending more than you should on food, what is going to stop that from leaking into other areas of your life? Convenience is an excuse that will worm its way into all other areas of your life as well, and soon it will be so "inconvenient" to give yourself a safety net, that you will not do it.
The idea is not to eliminate fun and enjoyment from your life, but simply to find better, more cost effective ways to get it, in order to free up some money for your cash reserve. Cooking your own meals can be very rewarding, but not if you let yourself get in the habit of having someone else do it for you.
