45% of Americans Are Cutting Back on Restaurants. Should You Follow Their Lead?

Slashing one expense could work wonders for your wallet.

These days, inflation is making it very difficult for Americans to keep up with their bills. Even those willing to live more frugally are struggling to cover the cost of things like rent, gas, and utilities.

Not only have many Americans been forced to raid their savings accounts to pay their bills, but many are having to make hard choices with regard to discretionary spending. In fact, 45% of Americans are making a concerted effort to cut back on spending by limiting the amount of money they spend at restaurants, according to New York Life's Wealth Watch Survey.

It's a strategy that could work wonders for your finances if money has gotten tight and you tend to spend a lot on meals outside the home. But is that the best way for you to fight inflation? Or are there other expenses you should try cutting first?

It's all about priorities

Some people will tell you that dining out at restaurants is a waste of money, since food establishments charge a huge markup on the items they serve. But while you can easily whip up a meal at home for a fraction of what you'll pay at a restaurant, that doesn't make dining out a waste of money.

The reason? If dining out brings you joy, then it's not a waste because you're getting something out of it -- a good meal, the option to socialize with friends, and the chance to avoid cleanup. There's value to that.

That said, if you're struggling financially, to the point where you're dipping into your savings and adding to your credit card balance, then it may be time to start cutting back on non-essential costs. That could mean cutting back on restaurant meals. But it doesn't have to.

There may be other non-essential monthly expenses that you can give up more easily than restaurant meals. Imagine you currently spend $85 a month on cable. You may decide that you can replace that with a $15 streaming service and pocket the $70 difference. In that case, you may decide to keep dining out a few times a month and just give up cable instead.

Before you deny yourself the option to eat at restaurants, take a look at your monthly spending and prioritize your non-essential expenses. You may find that you can continue to dine out as frequently as you're used to, provided you cut back in other areas.

Or, you may need to reduce your restaurant spending because cutting back on other bills won't make a huge difference in your financial situation. If so, that still doesn't mean you can never dine out -- you may just need to reduce the frequency of those meals.

A compromise worth exploring

Many people truly love dining out, so it's easy to see why it might be a difficult thing to give up. If you're having trouble paying bills and need to slash your restaurant spending, consider switching over to takeout meals as a compromise.

Takeout food will give you an occasional break from having to go grocery shopping and cook. And you may find that you spend considerably less on the average takeout order than you do dining in person at a restaurant, especially when you factor in savings on a tip.