A recent survey from Charles Schwab found that 55 percent of respondents say they wish they’d spent less on dining out in the past year and put more toward their financial goals – in this case, saving for retirement. But freeing up cash from your spending is also one of the best ways to pay down your debt.

After the category of “unexpected expenses,” such as home repairs, the survey found that “quality of life” spending was a major obstacle to saving, including eating out, vacations and other discretionary expenses. Cooking at home and packing your own lunch can save you significant money. But that doesn’t mean you can’t get out to the restaurant until your debt is fully paid.

Everything in moderation

When it comes to fixing your finances, trying to become obsessively frugal is about as effective as going on a crash diet to lose weight. You can keep it up for a little while, but eventually, you’ll get sick and tired of a steady diet of denial and go on a binge, whether that’s ingesting a chocolate pound cake or going on an Amazon spending spree. Instead, work to build responsible habits mixed with occasional indulgences.

Overall, Americans spend about 13 percent of their income on food and have for years, according to the Bureau of Labor Statistics. But recent trends show that people are spending nearly as much on meals out – 44 percent of their food budget – as they do on groceries. Overall, middle-income Americans dine out an average of 4.2 times per week.

“Dining out” suggests an evening of three courses at a white-tablecloth restaurant, but for many people, it means hitting a fast-food or fast casual dining outlet several times a week. According to Statista.com, the average eater at a fast-food joint spent $5.13 per meal in 2013 (latest data). For a casual dining spot, the individual check was $13.75. If you’re getting lunch five times a week plus picking up dinner twice a week, that adds up to somewhere between $39.44 and $105.70 per person per week (adjusted for inflation) and averages out to $72.57 a week or more than $300 a month. But you’re not really going out and having a good time – you’re just eating because you need to eat.

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Just plan ahead and you’ll save

With a little planning and effort, you can start replacing many of those meals at home, from something as simple as picking up a rotisserie chicken and a bagged salad to cooking up a batch of chili to cover one dinner and a couple of lunches. The cost will be less, the quality will be better, and the savings will add up.

But cooking every night gets old, and eating a brown-bag lunch in the cafeteria or at your desk gets boring. So find a happy middle-ground, where you eat at home as much as you can without feeling like you’re chained to the stove and then dine out at quality places you enjoy. If you were spending an average of $300 a month on dining out, aim to save half of that to put toward your debt or other financial goals, and spend the rest on going out when you can plan and enjoy it instead of just grabbing something because you didn’t plan dinner.

  • Buy gift cards below face value – During the holidays lots of business offer gift card deals. If it’s a place you frequent often, make sure to get a few.
  • Ask for a discount –  Senior citizens and military discounts are pretty common, it doesn’t hurt to ask.
  • Join the club – Take a few minutes to signup for emails you could get coupons or other special offers.
  • Use coupons – Go through your local penny saver and see if there are any good deals on a new restaurant.
  • Get a birthday discount – Most people go out for their birthday. See if they have a discount or at least free ice cream!
  • Share a meal –  If you know portions are large why not share a meal?
  • Save half of your meal – Take home your leftovers and eat them for lunch the next day.
  • Don’t skimp on tipping – Even if you are trying to save money, don’t let your waitstaff suffer. they depend on your tips!

Grabbing a drink

Going “where everybody knows your name” is the preferred way to unwind after a busy workday for many of us, but hitting the bar may be hitting your wallet a little too hard.

Sound familiar? Mike Meadows, a restaurant manager and longtime bartender in the city of bars – New Orleans – says the average tab these days is about $25 per person. If you frequent a bar twice a week, that adds up to $200 a month and $2,600 a year on alcohol purchases alone.

But you don’t have to give up your favorite bar stool altogether to save on drinks…

Find a good happy hour

If grabbing a drink with your colleagues after work is a common theme in your life, you need a good happy hour. “Not all happy hours are created equal,” Meadows says. “Some deals are just there to get you in the door.”

To find the best happy hour, start by checking the timing. On the surface, a happy hour from 3 p.m. to 7 p.m. seems like a great deal – four hours of cheaper drinks — but it won’t matter much if you get out of work at 6 p.m. Then it really will be just one happy hour, followed by hours of sadness. Instead, look for one starting around the time you get off to maximize the specials.

Make sure you’re getting the best deal on the most common happy hour special: the two-for-one. “It isn’t uncommon for a bartender to offer two shots in one glass if you’re ordering by yourself,” Meadows says, but that doesn’t always work to your benefit. If the glass is a tad small, “the bartender will just pour a little less.” Instead, ask for two separate glasses.

Finally, look for happy hour specials that combine deals – like free cover on ladies night or free food with the purchase of a drink or two.

Skip the tab

Just say no the next time a bartender offers to open a tab. Meadows says “having an open tab makes it too easy to just say ‘put it on my tab’ and stop tallying how much you’re really spending.” If you get carried away – or offer to buy too many rounds for your friends – you’ll end up with a big surprise when the check comes.

Instead, Meadows always pays for his drinks in cash as he goes. That way, he can “easily stick to his budget.”

Order smart

When it comes to ordering, what you choose will make a small difference to your taste buds and a big difference to your wallet. For beer, Meadows says to order what’s on draft, not in bottles. “You can get more than 200 beers out of a keg,” he says, so bars offer better deals on draft.

For mixed drinks, “always tell the bartender you want well,” Meadows says. When it comes to bar hierarchy, there’s top shelfmiddle range, and well. And while it falls in last place, it won’t taste different in a mixed drink – and it could “save you $5 to $12, depending on what you order.”

For wine, “always order the whole bottle,” Meadows says. While it may seem counterintuitive at first,  “you can usually get five glasses out of a bottle, and bottles are typically priced at four glasses.” If you can split the bottle with someone else, you’ll get an even better deal.

Know how to tip

“Tipping $1 per drink is industry standard,” Meadows says. And you should tip in cash as you go, so you keep your budget in check.

However, if you do decide to tip at the end, don’t treat your tab like a restaurant check.

“At a restaurant, you’re tipping based on a full-service experience, and 20 percent is totally reasonable,”  Meadows says. But when you get to the bar, “that doesn’t always make sense.” If you have a $50 bar tab, a 20-percent tip would be $10, but you may have only ordered six drinks. If you tipped 20 percent, you’d pay well over the industry standard.

Don’t try to buy favoritism

Finally, ignore any advice you hear about tipping big to get special attention throughout the night. Many people believe a large tip at first will make a difference, but Meadows says an old adage applies here: “You can’t buy your friends.”

“If a bar gets busy, a bartender stops caring who tipped what,” he says. “They’re just going to worry about getting the drinks out. No matter what you tip, they’re still going to serve everyone in order.”

Why tipping is important

Here are 6 reasons why not leaving a tip isn’t a good financial strategy.

If you blow off the tip to save money when dining out, karma is cooking up a special dish just for you.

1. Bad service

Unless you never want to go back to a restaurant again, you’re wise to fork over 20 percent of the bill to the server to show appreciation. That’s because wait staff remembers who tips well and who doesn’t.

If you’re known as a bad tipper, no server will go to extra lengths to make your meal special. Get used to hollow ice cubes at the bottom of empty water glasses because that’s how your life is going to be unless you change your ways.

2. Missing out on free food

This is one of the benefits of tipping. Because I’m friendly and always tip, I receive a few perks at my regular coffee shop, especially if I’m there near closing time. Over a decade, I’ve received at least a few hundred dollars in baked goods and sandwiches scheduled to be tossed. I don’t think the baristas would be as generous if I’d been known as “that bad tipper that stays until a minute before we close.”

3. Revenge

Do you really want to get on the bad side of a vindictive server with a chip on his shoulder and control over your food? Most people you stiff won’t slide your burger around on the floor next time before serving it, but you never know who’ll be pushed over the edge by a lousy tip.

4. Karmic payback

I’m all about being frugal. However, stinginess isn’t the way to go. That’s because stinginess spills over into other parts of your life too. I’ve yet to meet a non-tipper who wasn’t also stingy with love, friendship, kindness, forgiveness and other qualities that prompt others to be generous in return.

5. Jerk status

Every bad tipper I’ve debated blames the server for choosing a job that pays around $3 an hour since it’s supplemented with tips. For all you know, that server has a kid and is working her way through school.

That guy who didn’t refill your water could be distracted because his mom has cancer. Nobody wants to go out to dinner with a jerk who ignores the server’s fellow struggle as a human being. Think your friends and colleagues don’t notice? They do.

6. Poor money management

If you can’t afford to tip the server, you don’t have enough money to go out to eat. Draw up a budget that includes groceries, so you can prepare most meals at home. Then earmark a little extra for dining out, figuring in a 20 percent tip. Go out for nightly restaurant specials, a strategy that frees up extra money for a tip.

So, next time you think about stiffing your server to save a few bucks, instead, think about ways to create more money or better manage what you have already. Not only will you have more cash in your pocket, you’ll never have to wonder why that cook is smirking at you from behind the kitchen door.

How much will you save?

Over the course of a year, $150 a month saved from dining out works out to $1,800. If you applied that money to a credit card with a $5,000 balance charging 18 percent, you’d pay that card off completely in just a bit less than four years. And that would still leave you $150 each month for eating out.

The key to tightening discretionary expenses is finding the right balance between mindless spending and penny-pinching scrimping. Without a few indulgences in your budget, you’ll never stick to your financial plan.  You could end up worse off than when you started trying to fix your finances. Instead, get realistically frugal, and you can have your cake – at home – and eat it out, too.

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Article last modified on May 12, 2023. Published by Debt.com, LLC


Deb Hipp

Personal Finance Reporter