Which is cheaper, eating out or staying in? Common wisdom says eating in. Take this article, for example, in which the author conducted a fairly controlled experiment, eating out one week, cooking at home the next (with the potentially confounding factor of a wife eager to vindicate eating out). The results: the week of restaurant dinners was $257.08 and the week of (fancy) home-cooked meals was $148.14. Likewise, this post breaks down the cost of making the equivalent of a McDonald’s $1 cheeseburger–and finds that it is slightly cheaper to make your own.
On the other hand, there have been many attempts in recent years to show that eating out can be cheaper, or at least no more expensive, than eating in. For example, when you’ve got small children and go to the right restaurant, it can be a fairly economical proposition to go out instead of cooking–especially when you consider that you don’t have to do the dishes. And if you dislike cooking to the point where you feel the need to charge for your time spent cooking, then cooking is probably the more expensive option.
So which option is better? This question can’t be answered without an “it depends.” If you consider money alone, cooking at home is by far the better choice (especially if you don’t go in for things like aged parmesan cheese, or caviar, or steak three times a week). If you consider your time as too valuable to be spent cooking and charge anything over around $20 an hour–and you’re not cooking for many people–then the restaurant may be your best value. Personally, I enjoy cooking, so the time is not a factor for me; I even consider it a plus because I get to indulge in an activity that makes me happy. But if you despise cooking so much that you’d be living off of boxed kits and frozen pizzas if you ate at home, it may even be in your best interest health-wise to go out to a decent restaurant or a healthy carry-out place.
As in so many other aspects of personal finance, value is not as concrete as money, or time. The value you place on various things in your life will color your perceptions on what the best things to do with your money are. This can be important to remember when you’re considering your budget or your investment options–or your dinner choices. The frugal choice may not be the one that makes you happy; and unhappiness costs more than most of us can really afford.
Tags: cost analysis