Recently, MSN money published an article about how eating out is cheaper than cooking. Eating out and frugal should not be in the same sentence; restaurants are in the business of making money. If they are saving you money, how are they making any? Obviously I have a few issues with this claim. But first, here is an example from their site.
Outback Steakhouse
Meal: 10oz rib-eye dinner (includes soup, salad and asparagus)
Total price: $17.99
Grocery store: rib-eye, $9.55; soup, $2.99; bag salad, $3.99; asparagus, $3.99 a bunch
Total: $20.52
Winner: Outback
First, the calculations they are using are not fully accurate. All their groceries from FreshDirect, which will have different prices than the grocery stores near you. I can bet that you will get better deals at your local grocery stores. Also, you might be able to exclude tax from most grocery purchase; whereas, you must pay tax on the meal in the restaurant. It is also customary to leave tip at a sit down restaurant. So unless you do not tip, add 10-20% on top of the final restaurant bill.
Second, they are excluding the transportation cost to get to the restaurant. You can buy all your groceries all at once, whereas you must visit the restaurant each time you want to eat. Also, calculate how much time you will be saving by cooking all your meals; you do not have to wait on anybody to take your order or cook your food.
Third, even if you believe in their calculations they are pricing their food based on one person. Groceries are cheaper when you buy them in bulk; three steaks are cheaper by the ounce than just a single steak. So if you mouths to feed, eating out a lot is not a frugal choice.
Finally, restaurants make most of their profit on drinks. If you ever had a drink at a restaurant you would know what I mean. Do you enjoy paying $5 for a Miller light? You can usually buy a 6 pack for around $7 in the grocery store. Even if you do not drink, soft drinks are usually more than $1.
I am a fan of eating out occasionally, but eating most of your meals at a restaurant is absurd.
What do you guys have to add?
You can help MoneyPig by sharing his posts with your friends. This is a young blog that runs on word of mouth from readers like you. So take a second out of your day and help spread the word! Thanks. :FatMoneyPigTags: are restaurants cheaper than making food, can i eat mcdonalds everyday, cheaper than cooking, cheaper than making my own food, cooking cheaper than dining out, cooking cheaper than eating out, cooking cheaper than restaurants, dining versus cooking, eating out versus cooking, economics of cooking your own food, Is Eatting out is Cheaper than Cooking, why i should cook my own food
How to: Save Money on Groceries
Why you should live close to a Grocery Store..
How to Save Money at Restaurants
Also, the bag salad, soup ingredients, etc.. are going to make a whole lot more than 1 serving! If you make this dinner at home you’ll not only have leftovers, but probably enough for multiple extra meals.
yep. I am a big fan of leftovers aka my lunch for the next day!
Probably also worth considering whether the meal out is even as good as what you can make at home. I’m first to admit I’m not a good cook, but I still find myself surprised by how mediocre the food is at places that charge way too much.
In fact, I just wrote a whole post about this over the weekend if anyone’s interested. http://lifeoverwork.net/is-that-expensive-meal-out-even-that-good/
Good post! I wish i was in the same boat. I feel like I cook like crap and any restaurant to make worse food than me should go out of business quickly.
Huh? It may be true that buying an expensive bag of lettuce (dumping prepared lettuce into a bowl is not exactly “cooking” at home…) and a bunch of out-of-season asparagus, the meal will cost you the same or more as a trip to Outback.
However, a package of asparagus should feed more than one person. Ditto a bag of overpriced lettuce (our shopper would save a lot by buying a head of lettuce and break it up into bite-sized pieces).
Let’s assume you’re a couple and each person pigs out on an entire rib-eye (one of those serves me for three meals, but I’m not a workin’ man who burns calories on the job all day).
Two $17.99 Outback dinners will set you back $35.99 + (in my parts) 9% tax + 20% tip, or $47.05.
Adding one $9.55 steak to the grocery basket gives you $29.52 + 1% tax, or $29.54.
And…LOL! You’re right. From their calculations, we can only assume journalists never have a beer or a glass of wine with a nice dinner.
Here’s another factor to add into the common sense calculation: other people’s kids. At Outback, you’ll likely get to listen to the serenade of tired, cranky small children over the lovely melodies of the Muzak. When you eat at home, you get peace and quiet: priceless!
Absolutely! That author probably wrote that article knowing that people would argue over the the logic of how a restaurant meal can be cheaper than cooking a meal yourself. But it is always helpful to make cases showing both sides of the argument.
[...] Fat Money Pig researches if it really is less expensive to cook vs. eat out [...]
I just bought a bunch of asparagus for $1.91 (yes, I pulled out the receipt) the other day. OK, they were on sale, but regular price would have been $2.89, but still, I was able to use that bunch for 3 meals..for TWO of us! We’re not big eaters, so that may be a factor, but still that adds in to the fact that when you eat out, you over-eat and/or waste food – which means, that you’re not really “saving” money.
Also, the $9.55 supermarket rib-eye that they’re comparing too is probably going to be better than the Outback rib-eye.
My boyfriend is always amazed when I break down the cost of my home-cooked meals – at how little it costs compared to eating out. I’m not a great chef, and I can’t cook everything, so sure it’s nice to eat out once in a while, but I like how you can get a good simple yummy meal for so cheap AND not to mention that most meals cooked at home are going to be healthier for you too!
..now off to check out your other posts. I (and my sister!) love being frugal! ;P