Michelle Singletary Has 1 Tip to Help You Take Control of Your Spending
- Michelle Singletary says that eating out is the third-largest expense in many people's budgets.
- By eating at home more, it's possible to free up a lot of money every month.
There's one expense that tends to be a budget buster.
If you've been spending more than you'd like lately, personal finance columnist Michelle Singletary has one helpful tip. She recommends eating out less and focusing on using all the groceries you have at home.
It may be simple, but if you go out for dinners and drinks often, cutting back can be a big boost for your finances. Singletary has even said that some of the families she works with save over $1,000 per month this way.
Why dining is a good place to cut back
Singletary works with families on improving their budgets and their financial situations. On the Motley Fool Money podcast, she said eating out is the third-largest expense in many people's budgets. It was typically behind home and transportation costs, but before retirement savings and children's college funds.
In terms of numbers, Singletary says people who stop eating out saved an average of $500 to $600 per month. The normal range was a couple of hundred dollars to $1,000, with some families spending up to $1,500 per month on eating out.
Everyone's spending habits are different, but dining is definitely one of those areas where it's easy to overspend. If hanging out with friends usually involves going to a restaurant or a bar, those tabs can add up quickly, especially in big cities. I'm used to Los Angeles prices, so I get it. It's a struggle between wanting to check out all those cool restaurants and not wanting to spend hundreds every weekend.
To be clear, there's nothing wrong with going out to eat. If you're a foodie and restaurants are where you like to spend money, that's great. The key is, those expenses shouldn't be getting in the way of other financial goals, like saving for retirement or paying off debt. And for foodies, I'd also suggest looking at dining credit cards that can at least earn you more back on those restaurant bills.
How to spend less on eating out
If you want to trim your dining expenses, there are a lot of ways you can do it and have more money in your bank accounts at the end of the month.
Singletary has a financial challenge she recommends called the 21 Day Financial Fast. For those three weeks, you spend money on only the essentials. That means no going out to eat, and you only buy what you need at the grocery store. She also challenges families to use all those extra food items they have lying around, like canned food in the pantries and chicken in the back of the freezer.
That's one way to go, but if it's a little much for you, there are also tamer options out there. I've been trying to watch my dining spending lately, and what has worked the most for me is swapping out some (not all) of those expensive meals for more affordable alternatives.
For example, instead of doing dinner every time, sometimes I'll get lunch, or go to a cafe for coffee and cake. Other days it's just cocktails instead of a full dinner and drinks. I've also looked for other activities to do when going out, like hiking, visiting museums, and seeing movies. Switching things up is a nice change of pace, and it often costs less.
It's also a good idea to figure out how much you're going to budget for dining per month. For the best results, you need a limit and a way to track your spending so you don't exceed it. Budgeting apps can help with this.
You don't need to make huge changes to spend less on eating out. In most cases, a few adjustments here and there can help you free up more money without lowering your quality of life.
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