Use the ‘Burger Rule’ to save big bucks on food
The first step in making any budget is a soul-searching review of your expenses from previous months. One line item that gives many of us severe heartburn? The shocking amount we spend at restaurants. Seriously. How many nights a week are you ordering pickup or delivery—or dining out—when you could be cooking at home for a fraction of the cost?
I’m going to answer that for you: probably too many.
But let’s dispense with a food myth that’s all over your newsfeed these days. American households aren’t abandoning their kitchens in droves to spend unprecedented sums at restaurants. According to Bureau of Labor Statistics data, back in 1985 we spent an average of 41% of our food budgets eating out or getting takeout. Three decades later, that share was relatively stable at 43%.
Even so, we could all stand to eat out a lot less—for health reasons and to save money. For some of you foodie types, missing out on the newest taqueria, pintxos bar, or cidery is like giving up indoor plumbing. But if you’re serious about cutting corners a bit, and you suspect your dining out is getting out of control, there’s one easy remedy: Cook at home more.
It’s tempting to promise you’ll give up one restaurant meal a month, but ask yourself: If you’ve got the choice between Mickey D’s and your favorite fancy Neapolitan pizzeria, which culinary experience are you going to skip? Better to reduce your restaurant spending by a real number. But how much? Here’s a modest proposal. Average your monthly restaurant expenses over the past three months, then lop off half.
Hello? Still here? Look, 50% sounds like a huge reduction, but for lots of us, just brown-bagging and bringing our coffee from home would make up a big part of that.
Of course, cutting your restaurant spending means your grocery budget will have to grow. (You’ve got to eat something!) Calculating just how much to add means figuring out exactly how much more expensive dining out is than cooking at home. Not easy to do.
My advice: Apply the Burger Rule.
The median price of a restaurant hamburger is about four times more expensive than one you grill up at home. So, let’s suppose $20 at the supermarket is worth about $5 at a restaurant. Divide what you subtracted from your restaurant expenses by four, and add that sum to your monthly grocery budget.
Here’s an example: Let’s say you spend $400 a month dining out or ordering takeout. Cut that number in half for next month. Now you have $200 to spend each month on food prepared away from home, and not a penny more. Now, divide $200 by four—$50—and that’s the amount you add to your grocery budget.
Your monthly savings: $150.
Not bad—plus your brown-bag skills will be the envy of your office!
Bonus: Got kids? They can try their own hand at budgeting with my apple pie budget activity!