Monthly Finance Message:

“Dine In” to Save Money Today and Tomorrow

September 2015

Barbara O’Neill, Ph.D., CFP®
Extension Specialist in Financial Resource Management
Rutgers Cooperative Extension

When people are asked to identify their discretionary expenses, food eaten at restaurants often tops the list. Eating out, along with entertainment expenses, is frequently identified as an item to reduce or cut from family budgets to free up money to save/invest or cope with a reduction in income. This is not surprising because about a third of the money spent on food in the United States is spent at foodservice establishments, according to the U.S. Department of Agriculture.

Over time, the amount of money saved by eating meals at home and/or prepared at home (e.g., a “brown bag” lunch) is noteworthy. For example, according to the Eating Away at Your Future poster on the Small Steps to Health and Wealth™ website , someone could accumulate almost $50,000 in 20 years by eating out one less evening per week and investing the money saved at a 5% yield. Online tools like the Brown Bag Savings Calculator are useful to make personalized calculations of the amount of savings that can be realized with home-prepared food. It is not uncommon to be able to prepare three or four meals at home for the cost of one meal dining out (food plus gratuity).

A key take-away is that the money people save by eating more meals at home is just the beginning of their potential savings. For additional financial impact, this money could be invested and allowed to grow over time. Through the magic of compound interest (i.e., earning interest on previously earned interest), small dollar amounts can grow handsomely. At some point, money saved by earmarking the difference in cost between home- and restaurant-prepared meals can even begin to generate income to live on (e.g., bond or CD interest and dividends and/or capital gains on stocks). In other words, not only can you save money by eating at home, but you can actually make money!

Another way that home-prepared food impacts personal finances is the linkage between restaurant meals and overweight/obesity. People tend to eat healthier meals when they eat at home because they can better control portion sizes and the use of sauces, dressings, and other high-fat ingredients. While many restaurants offer some healthy choices and some even list calorie counts for certain foods, low-calorie dining options may be limited. In addition, some restaurants only offer food prepared in a certain way such as salads that are served drenched in salad dressing.

Following are some health benefits of eating more meals eaten at home:

  • Ability to select low-fat, low-sodium, and low-calorie ingredients
  • Ability to make healthy ingredient substitutions such as applesauce for oil in baked goods
  • Less temptation to eat tasty, but unhealthy, foods and large food portions
  • Lower likelihood of children becoming overweight or obese
  • Higher intake of health-promoting nutrients (e.g., Vitamin C and calcium) and dietary fiber
  • Knowing exactly what you are eating, especially if a family member has food allergies
Beyond the money saved by reducing the frequency of spending on restaurant meals, there is another way that eating meals at home affects household finances. Poor health and nutrition habits often translate into high out-of-pocket medical expenses. As explained in the Small Steps to Health and Wealth ™ workbook, a person’s health and finances are strongly associated with one another and “the greatest wealth is health.”

It is widely known that long-term consumption of high-fat, high-calorie foods can lead to health “issues” such as high blood pressure, heart disease, Type 2 diabetes, sleep apnea, arthritis, and some types of cancer. People who eat healthy meals at home and adopt a healthy lifestyle with recommended levels of physical activity are less likely to develop expensive health conditions that can drain family wealth. Even with health insurance, many people with medical conditions that require surgery and hospitalization face significant out-of-pocket costs for policy deductibles, copayments, and coinsurance.

Limiting “shocks” to your finances, including expensive health care related expenses and prescription drugs, was identified as one of eight pathways to becoming a millionaire in the book Eight Steps to Seven Figures by Charles B. Carlson. Want to be healthy and wealthy? Dine in and eat more meals at home.


  1. Rutgers
  2. Executive Dean of Agriculture and Natural Resources
  3. School of Environmental and Biological Sciences