Once your start tracking your spending and living on a budget, unmanaged food and dining expenses often reveal themselves to take a large piece of the pie. Spending money on quality food is part of a healthy life and for many Americans, dining out is a form of leisure and a break from cooking and cleaning.
Did your income increase by 4.8 % last year? Food costs did, and according to the United States Department of Agriculture (USDA), you will see an additional 3.5% increase in 2012. The best way to avoid budgeting hiccups from increased food prices (without succumbing to a life of extreme couponing or Ramen noodles) is to plan for food price increases before they become a budgeting issue.
Avoid Trading Down Traps
Eliminating eating out altogether is one way to avoid restaurant food cost increases, but given current diner demand, that shift is not entirely realistic. In its report Demand for Food Away From Home, the USDA estimates that if incomes rise by 1% annually through 2020, spending at full-service restaurants will increase nearly 15 percent by 2020.
While your budgeting instinct may be to choose mass market restaurants that offer “kids eat free” and “buy one, get one free” style offers, remember that “chain” doesn’t always mean “cheap.” Restaurant expert, Bill Marvin, says chain restaurants are two to three times more profitable than independent operations and Nation’s Restaurant News expects that Buffalo Wild Wings, Olive Garden, Red Lobster, Longhorn Steakhouse and Texas Roadhouse may all increase menu prices by at least two percent in 2012.
When you’re striving to eat out on a budget, identify the number you’re willing to spend, including tip, before you ever choose the venue. Check out menus online beforehand and consider the true cost of the meal, including the gas money you’ll spend driving there, wait time, food quality, experience and whether portions are large enough to share or take home. Avoid restaurants that require sides to be ordered a la carte and limit dining in steakhouses when you’re on a tight budget, as the USDA reports that beef prices are up as much as 10% this year, thanks to droughts.
Don’t “Read” the Menu
Just as stores arrange merchandise to entice impulse buys, “menu engineers” configure items and name dishes creatively to draw you to the most profitable dishes. Featured dishes that are placed above the midline and to the right of the page are typically higher-priced items that the restaurant wants you to order. A recent study by San Francisco State University Professor, Sybil Yang, also revealed that diners tend to read the menu like a book, first selecting an entrée and then building a “meal story” around it, complete with appetizers, dessert and drinks. To stick to your budget, identify a single item you would like to order and then put the menu away.
Use Social Media
Restaurants commonly offer Twitter, Facebook, Google+ and FourSquare users opportunities for savings or a free menu item if they participate in a social media exchange or sign up for periodic emails. Connect with your favorite venues online to find savings. If you live in one of its participating cities, Restaurant.com may also offer as much as 50% off on select eateries.
Profit From Buyer Remorse
Daily deals can be a gateway to unnecessary spending but when it comes to dining out, deal reseller sites can be a great way to unearth savings. Sites like CoupRecoup and DealsGoRound allow you to buy someone else’s unwanted impulse daily deal buy, often for less than the original deal cost.
Use credit cards strategically.
You probably know that using a rewards credit card is a good way to get a little money back for your spending (only if you pay it off in full, of course) but Odysseas Papadimitriou, CEO at CardHub, also suggests “the island approach” to maximize savings. This strategy involves using a couple of different rewards cards in tandem. For example, if you dine out frequently, use the card that rewards the most for that activity but use it exclusively for dining out. If you’ve identified a separate card that rewards top dollar for grocery purchases, use it every time you’re at the grocery store.
Don’t pay for packaging.
Many rising food prices are unavoidable but you still can control exactly what you’re putting your money towards. Explore alternative ways of shopping that will ensure you’re paying for quality food, versus packaging, marketing and fuel costs. Natural foods chef, Amanda Skrip, suggests buying grains, beans, flours, nuts, seeds and dried fruit in bulk bins. If you need a small amount of a spice you rarely use, buy a pinch from the bulk aisle versus wasting money on a whole jar that will go unused.
Skrip also recommends being flexible with your produce selections; in-season, local items will be more affordable due to higher supply and lower fuel costs. Dairy, meat and produce sold through local, organic co-op and community supported agriculture (CSA) groups are another alternative to overpaying for a lower quality product at the grocery store. Check out LocalHarvest.com to search for groups near you and find links to online suppliers.
Stephanie Taylor Christensen is a former financial services marketer based in Columbus, OH. The founder of Wellness On Less, she also writes on small business, consumer interest, wellness, career and personal finance topics.