Is This 1 Expense Busting Your Budget?

Hint: It's something many of us spend far too much money on. 

Many Americans struggle with credit card debt and stagnant or nonexistent savings. And often, the reasons boil down to a select few bad habits that wreak havoc on their finances. 

For some people, the primary source of budget-busting is impulse purchases. For others, it's the exorbitant rent required to live in a major city. But for many Americans, it's none other than food -- restaurant food, to be specific. 

The average U.S. household spent $3,459 per year on dining out in 2018, according to the Bureau of Labor Statistics. But while going to restaurants may offer you access to great food without the hassle of having to shop for groceries, cook, and clean up afterward, it can destroy your chances of saving money and even land you in debt. And that's reason enough to start cutting back. 

The trouble with dining out

Dining out is fun, easy, and convenient -- but the food you buy at restaurants can always be prepared far more cheaply at home. The typical dining establishment charges a 300% markup on the items it serves, which means that a meal costing $40 can be cooked in a home kitchen for $10. 

Now, imagine you go out to dinner three nights a week and spend $40 per meal. Over the course of a year, you're overpaying for food to the tune of $4,680. That's a lot of money to part with. And if you are restaurant regular, it should serve as a wake-up call to start exercising a bit more self-control.

Rein in your spending

Of course, if your savings are robust, you have no unhealthy debt (namely, that of the credit card variety), and you're meeting other important financial goals, like building a college fund for your kids, then by all means, spend thousands of dollars a year on restaurant food if that's what brings you enjoyment and makes your life easier. 

But if you're struggling financially, saddled with debt, and staring at a rather low savings account balance, then do your finances a big favor and stop dining out so frequently. You don't have to quit the habit cold turkey, but scaling back from three restaurant meals per week to just one would be a good starting point. 

At the same time, set up a budget to see how much you can afford to spend on restaurants while also covering your remaining bills and meeting your various financial goals. Having those numbers mapped out in front of you could help you dine out more responsibly, whether that means doing so less often or opting for cheaper meals outside the home. 

Incidentally, the same advice holds true for store-bought coffee and lunch. It's nice to enjoy a fancy latte or a loaded deli sandwich made by someone else once in a while, and there's no need to completely deprive yourself of these modest luxuries that make life a little easier. The key, however, is to strike the right balance so that you're indulging on occasion, but also keeping your finances reasonably intact.