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Financial Planning for Millennials

Five Ways to Lower Your Entertainment & Dining Expenses

Part of delivering a comprehensive financial planning experience for clients involves helping them thoroughly review their budget and develop a better spending and savings system to meet their goals. Generally, the largest expense category is entertainment and dining, namely for 25-35 year-old Millennials. Those in this age group tend to spend more money on “experiences,” like music festivals, rather than “things.” According to Forbes, Millennials “tend to define themselves by their experiences more so than other qualities or factors,” so it comes as no surprise that funding these experiences is high priority.

The entertainment and dining expense category may include monthly viewer subscriptions such as Netflix, dining out at restaurants with friends or family, concerts, festivals, sports events, and other leisure activities.

Some individuals and families spend anywhere from 15% to almost as high as 25% of their “take-home income” on entertainment and dining each month. In other words, if your net income is $75,000 per year, you spend more than $11,000 just on entertainment and dining out alone annually. In some extreme cases, the entertainment or “experience” expenses are nearly half or more of the rent or mortgage.

Here are five suggestions to help cut down on this category’s expenses without having to make huge lifestyle adjustments:

1.      Go to the library to rent movies for free.

With the prevalence of books, movies, and videos games online, people have forgotten about their local public library. If you love any or all of those three activities, your public library is a great resource to rent those items for free. With the help of the internet, you can check out your library’s catalog online to see what is available and reserve it for pick up when you are ready.

2.      Cut your cable bill and narrow down your monthly streaming subscriptions.

Some monthly entertainment subscriptions, such as Hulu and Netflix, offer you a free trial to test out their entertainment package if you are a new customer. However, most people forget to cancel their free trial subscriptions. Even if you kept them intentionally, you may be overpaying for monthly home entertainment since most of those programs have overlapping movies, games, and TV shows. First, ask yourself what type of programming you watch the most and then determine which of the subscriptions you utilize the majority of the time. Keep one or two and get rid of the others; it adds up.

3.      Host more get-togethers at your home and invite friends.

It doesn’t take too many transactions to see that dining out gets very expensive. One appetizer and dinner for two one night adds up when the next night you’re going out with your friends for a few drinks and then another night you take the family to dinner and a movie. If you go out to eat a minimum of twice a week with your friends or family, that can add up to roughly $4,320 per year on average for just your portion of dining out. This amount is even greater if you live in major metropolitan cities where the cost of living is significantly higher, such as New York City or San Francisco.

Instead of going to a restaurant or bar, host some friends at your house or go to theirs. This will take a little planning ahead, but at least you’ll know how much you’ll need to spend on each occasion and have more awareness over your spending. Split the total cost or have them bring over the drinks or appetizers.

4.      Use apps to purchase dining coupons.

Using apps, such as Foursquare, Groupon or Yelp, can help you save money when you’re dining out. This takes a little bit of planning, as well, but Groupon and similar apps discount restaurants by more than 50% at times. Some bars and restaurants even provide discounts when you “check-in” to their location using Foursquare, Facebook or Yelp. It may not seem like much at times, but the savings adds up.

5.      Be more selective about dining out for your lunch break at work.

It may be a matter of convenience to go out for lunch every day, but spending a minimum of $10 each time will cost you nearly $2,400 annually. Some may argue that it only costs them $5 per lunch, but that is still at least $1,200 each year.

If you are used to going out for lunch every day, gradually adjust this habit. Try bringing lunch one day a week and dine out for lunch the other four work days. Then, once that becomes more comfortable, bring your lunch two days a week. Continue to steadily increase the frequency of bringing lunch to work until you get to a more balanced number of days you treat yourself to dining out for lunch as opposed to bringing your own.  Also, it helps if you try this new habit with a co-worker to keep each other accountable.

Taking small steps and creating more awareness for your spending habits to plan your week, month, and ultimately your year, can help you know where your money is going and save more of it.


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This data is for informational purposes only and Capital Benchmark Partners, LLC ("CBP") is not affiliated with any of the businesses mentioned nor endorses them. CBP is not endorsed by any third party entities for their inclusion in this article. Past performance is not a guarantee of future results. The information contained herein has been obtained from sources believed to be reliable but the accuracy of the information cannot be guaranteed.

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