Why Gen Z Is Missing Out on One Big Opportunity to Save Money

Gen Z is often known for being gloomy about their personal finances, and the younger generations have been unfairly criticized for spending too much money on "avocado toast." I don't want to sound like an annoying personal finance guru who scolds people for spending money; I want people to enjoy their money. And many members of Gen Z were hit hard by the pandemic, by high inflation, and by expensive housing -- they have legit reasons to be unhappy.

But according to a new survey from Empower, Gen Z is spending a surprisingly large amount of money on one little item in their budgets: food. Specifically, dining out. The Empower survey found that Gen Z goes out to eat more than any other age cohort. In fact, Gen Zers dine out for 26% of all their meals!

Let's look at how Gen Zers can save money on food -- and why cooking at home could become the next hot TikTok personal finance trend.

Gen Z dines out 26% of the time

A recent survey from Empower on Americans' daily spending habits found that Americans aren't cooking a lot of meals for themselves: Americans dine out 20% of the time, and Gen Z dines out even more frequently: 26% of the time, or more than one in four meals. So that means in a typical seven-day week, assuming three meals per day, Gen Zers are eating out five times (or more).

There's nothing wrong with going out to eat. It's delicious, it's convenient, it saves you time, it gives you a chance to hang out with friends and loved ones. Food delivery apps have become part of the fabric of everyday life in America. But if you're spending so much money on restaurant meals and takeout that your monthly budget is going down the tubes, it's time to re-evaluate.

Gen Z has the lowest average food budget

Even though Gen Zers dine out most often, they seem to be more frugal with their per-meal spending. The Empower survey found that Gen Zers spent the least on food of all generations, with an average Gen Z food budget of $123 per week. This calculates out to $6,396 per year or $533 per month.

However, it's possible that Gen Zers are spending more money than that. The Empower survey data on food spending was a bit lower than other official research recently, which showed that (as of 2022), Americans were spending a total of $778 per month or $9,336 per year, on food.

Even if Gen Zers are spending $245 less per month on food than the national average, young people also tend to have lower incomes. At the early stage of your career, it can be hard to stretch each paycheck further. If you're a Gen Zer who's concerned about living paycheck to paycheck, try to cut back on restaurant meals. Even if you only save $50 or $100 a month on restaurants, that could help you build up your emergency savings and strengthen your financial foundation.

How to save money on restaurant meals

Unless you want to move home with your parents, or eat all your meals at the Costco food court, there's an obvious answer for how to save money on dining out. You're going to have to cook more meals at home.

Cooking shouldn't feel like a punishment. Cooking is an adventure! It's a chance to be more creative with your meal planning. Check out some chefs and foodie influencers on TikTok and YouTube; look for fun recipes, try to recreate your favorite cuisines at home. Shopping for special ingredients can become a fun treasure hunt at the grocery store, especially if you use cash back apps to find extra discounts and cash rewards.

And cooking at home doesn't have to be lonely! It should be the opposite: turn your home cooking into a party. Have friends over to cook together and split costs of ingredients. This is how people used to socialize in the "old days," before TikTok: preparing meals, having a drink, telling stories, sharing a laugh, living life in community in real time.

Bottom line

There are a lot of good things that come from spending money at restaurants, especially for young people. Going out for dinner (and other meals) can help you socialize, meet new people, build career connections, and otherwise save time and effort on cooking.

But if you're serious about wanting to save money, looking at your food budget is a good place to start. Cooking more meals at home can give you new creative recipes to try, and fun occasions to socialize (have a friends' dinner party or a potluck) while keeping more money in your bank account.