Economics of Eating Out

My in-laws are big believers in the economical benefits of preparing meals at home versus eating out while we, like a growing number of Americans, are living la vida fast food. Until recently we routinely would go out to McDonald's for a Sunday breakfast and on Monday night my wife and I would go out for a date to Red Lobster. It wasn't uncommon for us to grab a meal from some restaurant or fast food joint during the week, depending on our schedules and where we were around mealtimes. Her father is in charge of a kitchen at a retirement facility and can cook a fabulous meal for four people or four hundred; leftovers are frozen, and the family uses them up over the course of the week.

Is this just us spending too much for too little? When this topic comes up, I say that there are other things to consider when arguing over cost of foods prepared at home versus the unhealthier choices at your local Denny's, Red Lobster or McD's. People looking to maximize the most food for the buck can beat the cost of eating at resaurants thanks to careful shopping at supermarkets and bulk retailers, I have little doubt of that. What we found for our family, though, was that we had other factors to consider when making bulk purchases to save money.

What does this boil down to? If you want to combine value with cost to compare the expense of cooking at home vs. eating out, you need to compare out-of-pocket monetary cost and time you lose plus storage/waste cost.

Some of these are soft costs. How much do you value your time? You'll be hard pressed to argue that eating out is less expensive in time. Fast food is usually five minutes to get your food. You have no prep, you have no cleanup, you have no storage costs for leftovers unless you ordered extra or take some home with you. I suppose you can argue that the time invested in preparing and cleaning up is family time if you get the family involved, but how many families make this a routine event?

Out of pocket, as I said, I bet that a buying in bulk can make the raw material cost of food lower. What we experienced, though, was spoilage. Not for everything, of course. I'm a cheese fiend. It was hard to have cheese go bad. Canned goods. Things like that. But for breads and fruits, other perishables, we couldn't do a straightforward formula for price per pound of goods since we ended up throwing out some of it and so we didn't save as much there.

Storage costs means money and space. Freezers use electricity. The more you store and the longer you store it the more it costs.

Time is used in searching for best deals. Can you save more getting those franks from BJ's or is Wegman's having a sale on them this weekend?

There is cost in maintenance. Bet that's hardly thought about, but it's true; you have to drive to the super Walmart or bulk food distributor, you have to pay for gas for that larger vehicle, you have to pay for a freezer unit, and you have to pay to repair when that freezer dies on you (and the occasional spoilage of food resulting from said freezer dying).

Then there's lifestyle. This is probably the biggest reason behind our behavior; neither of us likes doing dishes, and while I don't mind leftovers, we definitely seem to have a problem with going back and finishing last night's meals. The kids complain most bitterly about having the same thing they just had for a meal (ironically they have no trouble getting "the usual" from McD's, though). We're also busy and both have full time jobs and one kid in school and another at daycare; it's a familiar refrain, but true enough. We don't prioritize making meals so it's not something we do as often as grabbing from the drive-through.

Which brings up the biggest piece of the puzzle. We can either spend an hour or two planning, prepping, eating, and cleaning for a meal, or we can stop at the drive-through for five minutes, eat, and throw away the papers (or wait to pay the waitress after she takes the dishes away). My wife and I typically spend thirty to forty dollars for a big meal at Red Lobster. Is it worth forty dollars focused on my wife with a nice, stress-free meal versus two hours of time in our own kitchen? I can take my family of four out to breakfast at McDonalds for a little over twenty dollars, maybe thirty. It takes five minutes to get the meal. Spend half an hour eating. Is it worth that much to me to save the effort for my own cooking? This is a question of paying for convenience.

We do this all the time. We could save money by changing our own oil; I pay a guy fifteen bucks to change it for me, and I don't have to dispose of the waste oil. It really doesn't take much to maintain a computer and use it properly to prevent adware and a lot of malware from infecting it; the average home use doesn't invest the time in learning how to "properly" use it, and end up periodically having to pay someone to fix it for them. Americans have mastered the art of offering services to do what we just don't want to spare the time to do and in the process spend a little extra on a convenience tax.

A quick survey of American eating habits today shows that we're not all that unusual. There seems to be a downturn in the number of times people are eating out now due to the currently popular excuse of "the economy sucks", but people are still eating out several times a week.

I suppose the conclusion is that if we wanted to prioritize food preparation and money savings, then yes, eating at home is cheaper. If we factor in our own lifestyles and the fact that we really don't want to invest the extra time to the extra work this can entail then our eating out habits just offer more convenience for the dollar. Until it is no longer more convenient to do this then I will continue to argue that, for us, eating out periodically is worth what we're spending on it.