The True Cost of Eating Out vs Cooking at Home

Have you ever wondered how much you could save by skipping that dinner reservation and firing up your own stove or your grill? Let's break down the numbers so you can know the real cost of eating out versus eating in. And as a bonus, you might even get a little healthier.

Hey everyone, I'm Phil Clark. Welcome back to We're Talking Money. Today we're going to dive into a subject that affects your wallet, probably everyone's wallet, and it just might be affecting your waistline. Without a doubt, eating out can feel convenient, but it comes at a hefty price.

And believe me, having owned a large upscale restaurant, I can speak to all of the realities as it relates to these hefty price tags. For example, using scraps from various cuts of meat to create a top dollar dish. We did this all the time. They can disguise those cuts of meat that aren't ideal with great flavor, a catchy description, and all of a sudden those scraps, they were fetching up to 300 100% above our cost, sometimes more. And customers, they gladly paid for it and very often referred to it as a great value, and it was anything but.

On average, let's talk about what these meals really cost. At an inexpensive restaurant, so we're not even talking about those white tablecloths at this point, you're going to spend as an individual about $20 including tax, and that doesn't include drinks. Cooking that same meal at home, you could get out for about $4.50. Now that's a difference in cost of about 3 in 50%.

If you're someone who eats out, say, five times a week at relatively inexpensive restaurants, that's about a $400 a month cost. Now if you cook those meals at home, you'd spend about $90. That's a monthly savings of about $310, and over the course of a year we're talking about more than $3600. Are you married or do you have a significant other? That just doubled your cost. And what about drinks? Suddenly the difference in cost could surge above $10,000 every 12 months. If you add kids to the equation, the cost just keeps getting higher.

Can it get worse? Well, yes it can. Some of us love to dine at higher end spots. So current prices for, say, a 5 oz filet mignon easily hits $50 in top tier restaurants today, and an 8 O filet can fetch $60 or more. Add a salad, maybe a dessert, one glass of wine, and this so-called experience, it's going to rack up a cost of around $100, maybe more.

What if you created that same meal at home? You can purchase a great whole tenderloin at somewhere like Costco for around $100. That full tenderloin is going to provide you about nine steaks, so that works out to be, say, $11 per steak. Add a salad, a great bottle of wine, not just one glass, and even a little dessert. You can make this meal for less than $40.

Let's take a look at an example of a couple eating at fine dining establishment, say, twice per week. With tip and tax, you're going to easily spend 2 50, maybe $300. Now that same meal at home might cost you $80. That is a savings of $220 per meal. At just twice a week, you could be spending an extra $112,000 a year.

Let's say that you invest that $112,000 of savings with an average return of about 8%. You could grow a nest egg of nearly one4 of a million doll, $250,000, in just 10 years using the savings. Let's say that you never add another penny to that nest egg. It doubles every 9 years. So imagine what that could do for your retirement or emergency fund or paying off debt, maybe paying off a mortgage. It's a simple way to keep more money in your pocket.

And here's the kicker: this is not just about the money, it's also about your health. So when you cook at home, you're in control, and that's one of the best parts about it. Whether you're watching your calories or reducing sodium, maybe you're just simply avoiding unhealthy fats, whatever the case, you're in control.

And those restaurant portions, by the way, can be huge, and they're always packed with extra calories and a lot of hidden ingredients that you probably should be avoiding anyway. The chef's goal has nothing to do with your health. It has everything to do with taste and making a profit. When you're in charge of the kitchen, however, you get to decide what goes on your plate and in your body.

I can tell you, as someone who loves to cook, it's also more fulfilling. It allows you to enjoy the cooking process, experiment with new recipes, maybe create your own. You could even turn it into a really fun hobby. I know people that took it a step further and they turn it into a career. What can be better than learning new skills, trying new cuisines, which you're going to love, and maybe even impressing your friends or family with your newfound culinary talents? Showing off these skills, they can be a lot more rewarding than dropping $150 on a restaurant bill that probably left you unimpressed.

If you're saving hundreds or even thousands of dollars in a year by eating at home, you can start putting that money to good use. So first, you could build your emergency funds. Having some cash set aside for those rainy days, it's going to give you peace of mind and a lot of financial security. And number two, it's investing. Over time, those small savings can turn into sizable nest eggs with the power of compound interest. Number three, it's getting rid of those high interest debts. Why not use the extra cash to eliminate those credit card debts or student loans?

Number four, it's saving for a big goal. Everyone seems today to be parroting this idea that buying a home is unaffordable, it's out of reach. I'm going to disagree with that and tell you that it's simply not true. Whether it's a down payment on a house or a dream vacation or even early retirement, not going out to eat so much and saving 10 or 12 or more thousand per year can help you reach these goals, like the American dream of buying a house. All it takes is a little discipline, saving, investing, and before you know it, you'll have what you need for that down payment, and in no time you'll be living in that home.

It's the little things that make a huge difference. So the next time you're thinking about ordering takeout or heading to that trendy new restaurant, ask yourself: is it really worth the cost? You're going to set yourself up for a wealthier and a healthier tomorrow.

Share your favorite home-cooked meals or recipes in the comments below, and whoever gives us the best recipe, you're going to get one of our famous Yeti cups with our OmniStar logo. Thanks for joining me on We're Talking Money, and if you like today's episode, make sure to hit that like button, subscribe to our channel, and please share it with folks that you think can benefit from these kinds of messages. I'll see you next time on We're Talking Money, and