A few nights ago, our family went out to dinner at a local restaurant. On the occasions when our family does eat out, our children are usually pretty excited for the event, as it鈥檚 a change of pace from eating at home every evening. They鈥檙e usually really observant and spend much of the meal asking questions of all kinds and chattering like crazy.
What made this meal different? For the first time, our oldest son really began to notice the prices on the menus. He looked through the prices and connected them with his allowance, noting that even the children鈥檚 offerings were more expensive than what he received for his weekly stipend.
This screamed 鈥渢eachable moment鈥� to me, so we started talking about the costs of food.
The first thing we did was we started talking about what the cost of a meal in a restaurant actually covers. Of course, it covers the food you receive, but it also helps pay for the service (the people preparing it and bringing it to your table) and the building as well as (hopefully) a tiny bit of profit for the business owner.
We started to break down his meal鈥檚 cost in a fairly inexact way. His children鈥檚 meal was $3.95, so we decided that out of that $3.95, the waiter would get about a quarter, the people in the kitchen would get about seventy five cents, the manager would get another quarter, the building would get another fifty cents, and the people that owned the restaurant would get a quarter. That meant his food should be worth $1.95 or so.
So, when he received his food, we tried to estimate the cost of it. His meal consisted of scrambled eggs, two pieces of bacon, and some mixed fruit. We figured that the scrambled eggs cost about forty cents, the two pieces of bacon also cost about forty cents, and his fruit cost about sixty cents (obviously, we were estimating here). That left us with a food cost of about $1.20, leaving about $0.75 left over (which we eventually decided would go to the bills we hadn鈥檛 thought about, like napkins and ketchup).
As we were eating, we talked about the cost of making that same meal at home. We would have roughly the same food cost 鈥� a little over $1.20 for the food. We鈥檇 also have a bit of an energy cost, so we tossed in another ten cents, making $1.30.
So what about that difference between $1.30 and $3.95? Obviously, that extra $2.55 is what we save by eating at home.
Of course, eating at home has other costs, too. We have to prepare the food ourselves and clean up the dishes ourselves. Is that worth $2.55?
At first, he wasn鈥檛 sure whether it was worth it or not, but then Sarah pointed out that we usually make a meal for all five of us at once and if we were saving $2.55 on each of five meals, we would actually save a bit under $13.
That changed his mind 鈥� it seemed like real savings.
Then we talked about the real moneymaker 鈥� beverages. Sarah had a Diet Coke which cost $2.49 with unlimited refills. The children each had milk, which cost $0.99 per cup. (I had water, so we didn鈥檛 include that part.)
At home, if Sarah had two cans of Diet Coke over ice (which is probably roughly equivalent to what she drank at the restaurant), that would cost us about $0.50, as we can get a can of Diet Coke for $0.25 if we buy a large pack. Similarly, if we buy a gallon of milk for $3.50 at the store, we鈥檇 use about a third of it on what the kids drank, cutting the cost down to about $1.16 instead of the $2.97.
In other words, we would have saved about $4 overall just on the beverages. Sure, we would have had to wash the cups and pour it ourselves.
Our son then decided that 鈥渞estaurants are expensive鈥� and wondered why we would eat there.
Our answer? Sometimes, a restaurant is a nice treat. It means we don鈥檛 have to prepare it ourselves and we don鈥檛 have to do the dishes.
However, when we choose to do those things at home, we do certainly save a significant amount over going to a restaurant. This meal alone would have easily saved us $20 if we had just prepared the same thing at home, and if one of us could have prepared it in an hour (which could have easily been done), then that鈥檚 $20 more for us to use for other things.
鈥淪o every time we eat at home we鈥檙e saving $20?鈥� he asked.
鈥淢ore or less,鈥� I replied.
鈥淭hen we should always eat at home!鈥� he said with a big smile.
Lesson learned. Now the trick is for this idea to stick with him for the long haul.
The post Teaching Money 海角大神 at a Restaurant appeared first on The Simple Dollar.