By Daniel Rodriguez | Dr. Budgets
Some of my clients, when they first hired me, discovered they had an opportunity to save money on their dining out spending. They would eat out, then swipe their debit or credit card without much awareness of the total amount they were actually spending every month. When I made them aware of their high dining out expenses (over $1,000/month), they turned to me for ideas on how to reduce their spending in this category. This adjustment would, in turn, allow them to pay off debt and build up savings. In this post I will share with you a tip on how to save $500 in 30 days on dining out, which when sustained, can have a powerful impact on the amount of money you keep.
My solutions vary by client, but the one recommendation that has worked for a majority of those challenged with their dining out spending has been the envelope system. I typically don’t recommend the envelope system across all spending; instead, I use it exclusively for dining out. How does this work? You start by setting a dollar amount you want to spend on dining out for the month. Then you take out that amount of cash, put it in an envelope labeled “Dining Out,” then you use that cash exclusively for eating out. You can give yourself an “allowance” either once per month, twice per month, or weekly…whatever works best for you.
For example, if you would like to spend up to $400/month on dining out, you could:
Step 1: Take out $400 on the 1st of the month and put it in your “Dining Out” envelope.
Step 2: Put $100 in your wallet or purse so that you are not carrying around an envelope with $400.
Step 3: After you go through that first $100, replenish your dining out cash with money from your envelope.
Step 4: Once you run out of the $400, then you would have to wait until the 1st of the month for your next monthly allotment. Or, any money left could carry over to the next month.
Alternatively, you could give yourself $200 on each paycheck (if you get paid twice per month) so that you would receive your dining out allotment more frequently. I have found that my clients often save $500 in 30 days on dining out by following this simple (not necessarily easy!) system.
Some tips to make this system work for you:
Plan Ahead. If there’s a birthday or other special occasion later in the month, you might consider refraining from eating out during the first couple of weeks so you have money to splurge later.
Get Creative. If you’re out of “dining out” money, make a new recipe or try something new for dinner (have you ever had breakfast for dinner?).
Save Money. There are many ways to save money while dining out! You can drink water, order off the Happy Hour menu, or bring a coupon.
If you are a business owner and eat out for business, then I don’t recommend the envelope system for your business meals because cash is harder to track for tax purposes. For business meals, I recommend you use your debit and credit cards. Please contact me if you want more specific tips for tracking expenses as a business owner.
So that’s how you too can save $500 in 30 days on dining out. What will you do with the extra $6,000/year this tip will free up for you? Will you pay off debt? Will you build up your savings? Please let me know in the comments section below!
We just got a huge tax bill because we messed up on our W4s, so we will need to start saving money on things like dining out. I’ll give this a try! In general going to cheaper places is better (we like Las Olas in Cardiff – really affordable and you get a lot of food, and it’s across the street from the ocean!), but you’re right if there is a special occasion coming up all you need to do is not go out every weekend so you can save for that one occasion. In general we are going to try to go out less often (while groceries cost a lot, you have to buy them anyway and it is often cheaper to make your own meal) and I think we’ll refrain from ordering booze when out as that jacks up the bill a lot! So the main thing we are going to do with trimming the costs of dining out is pay back ourselves for the huge amount of money we are about to lose to the IRS 🙁 Lesson learned – if you are put into a higher tax bracket (be aware of your tax bracket!) because you or your partner got a raise, you can ask your employer to take out extra money from your paycheck toward state and federal so that you are paying an additional amount of tax throughout the year instead of a fat bill all at once at the end of the year. I never knew you could do that!! It’s really important to get a tax estimate at the beginning of the calendar year (and an accurate one) so that you know what you’ll owe come 4/15 of next year. Our tax guy failed to do this for us even though he knew we got a bump in salary late last year. Incidentally we’ll be looking for a new tax preparer for 2016 🙁
Burger Lounge is also really good, as is Urban Pi.