Updated on 09.16.14

The Simple Dollar Guide To Eating Out

Trent Hamm

foodGiven that I’m such a foodie and also frugal at the same time, several readers have written to me recently asking for tips on dining out. I collected some of my thoughts together and thus present this guide to how I eat out in such a way that my frugal sensibilities are in balance with my desire for exquisite food.

Tips for Eating Out

1. Eat out rarely, but do it right when you do

If I am going to be served food by someone else, I want to be an experience I will really remember. I generally find “sit down fast food” restaurants like Chili’s and Applebees (want to see what I mean?) to be an overpriced and preservative-laden version of what I can make at home.

Thus, rather than eating out every other week at a place like this, I save my nickels and dimes and eat out every three months or so at an exquisite local restaurant. I have enough available money to spend so that prices aren’t really an issue, either – I can share a bottle of wine with my wife if we choose to, for example. There are several outstanding restaurants in the greater Des Moines area, and I’d far rather drop $80-100 at one of those for a meal than drop $20 five times at other places.

Why? Even though this was my philosophy before having children, it’s even stronger now. I eat out for the experience, and the experience of dining at a top-notch restaurant is something I remember – I don’t remember trips to the IHOP, though I’ll eat at those places in a group setting without any problem.

2. Don’t worry about healthiness

If you eat out rarely, as I do, don’t spend your time worrying about finding the healthiest item on the menu. The rare occasion of eating out somewhere nice should be savored, thus I recommend chooing items that excite your palate above all.

I often find that the rare “blow my mind” meal is a great motivator for dieting. I plan a meal at an upscale restaurant a few months in advance and then use thoughts of that meal as a motivator all the way along. “I’ll eat really healthy today, and as a reward soon I’ll have that tremendous meal. Bring on the salad!”

3. The company makes all the difference

I enjoy eating out in small groups, but the company should be suitably enjoyable. If you’re going to eat out with someone and it’s not a fully comfortable situation, don’t eat out at a high-end place.

Life is a series of experiences, and it is the great ones that stick with us. I’m a firm believer in lining things up so events will be of the highest enjoyment possible – if you don’t enjoy the company, don’t go for the gusto with the meal. Stay at home, or eat at a simpler place.

4. Order water

Almost every restaurant will give you water for free. Order it. Sip it between bites. This is something I try to do at home as well for two reasons: it increases your enjoyment of the flavor of the food as the water cleanses your palate between bites, and it sates your appetite quicker, meaning you’re less likely to eat too much resulting in misery and weight gain.

5. Know a little bit about wine before you go in the door, so you can make your own choice if you order it

Quite often, the staff has a particular wine to “recommend,” which happens to be whatever wine there’s an abundance of in the back. Instead of going down that route, decide what you’re going to order first, then select a wine to complement that food.

As a thumbnail rule, the wine should match the color of the meat. Red wine for beef, white wine for poultry, fish, and pasta. Pork can go either way; I usually order a red with it, though. More specifically, I order a chardonnay with chicken or pork, a cabernet with steak (or other cuts of beef), sauvignon blanc with fish, and pinot grigio with pasta.

6. Leave a cash gratuity

Some people might be surprised by this, but it comes from personal experience at a restaurant. If you don’t do a cash gratuity, the restaurant sometimes scrapes it into their own profit coffers and the hardworking waiter you’re trying to tip gets only part of it – or sometimes nothing. One restaurant I am familiar with actually collects all tips, then gives a very small (almost insulting) “Christmas bonus” to all of the employees, which adds up to only a small fraction of the gratuities.

Thus, I try to make an effort to leave a cash gratuity, particularly if the service was very good. Often, I’ll note that on the receipt – I’ll write “cash” on the tip line and then write the total as being equal to the bill (I always pay by credit card at such places). Some places add the gratuity into the bill for you – something I don’t like – but most do not for a small party.

The most important thing of all? Enjoy the experience.

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  1. Nice tips! Most restaurants make maximum profits on drinks (all types of beverages) and deserts. So we stay away from them. We also make sure to leave a large cash tip for the waiters almost all of whom are on minimum wages.

  2. iarenoob says:

    I enjoy reading your posts. This actually is good timing because I am in a crunch with being frugal and being healthy at the same time but you are right. It is about the experience and the company. Thank you for making me think about what’s more important.

  3. Mike says:

    I do the exact same thing with tipping – always in cash if I have it on me. This means the restaurant can’t skim off the tips and pay the servers less than they deserve. Also, some restaurants may only pay out tips which were paid via CC in paychecks; paying by cash allows the servers to get their tip immediately instead of waiting 2 weeks.

    Servers are supposed to report tips as income for tax purposes, but if I recall correctly their W-2s include some sort of approximation for tip. Another reason to pay tips in cash is to avoid the paper trail that could lead to an inflated tip line on the W-2, which obviously leads to a lesser tax burden on servers, who I would imagine in many cases could use the assistance!

    The only negative to paying tips in cash is for your own accounting purposes – some companies only reimburse expenses printed on receipts, not hand-written (as a cash tip would be). Also, if you itemize taxes and you get audited, a plethora of hand-written tip amounts at the bottom of receipts may or may not be accepted by the IRS, I would think.

  4. Dana says:

    A way we enjoy chain restaurant food on the cheap is by using the Top Secret Recipes website and books. Todd Wilbur investigates signature dishes at many casual restaurants and then explains how to duplicate them at home. Not only do we save cash, but we enjoy the challenge of trying to replicate the meal.

  5. dong says:

    Great tips. The food at places like Applebees is not worth eating – I’d rather a frozen dinner at home. I’ll have to keep in the mind the bit about cash tips which I’ve always know but hard since I don’t carry much cash.

  6. Elaine says:

    re: don’t worry about health

    Waitaminute, you mean healthy and deliciously decadent are mutually exclusive? So THAT’S been my problem all along *headdesk*

  7. Mrs. Micah says:

    I mostly agree. When you’re my age, there’s still a certain value in the late night trips to the diner for pancakes and camaraderie.

    Unfortunately, I’m afraid “my age” stopped 4 months ago when I graduated.

    I’m particularly fond of Chipotle–it’s not quite fast food, though it’s fast. You get the choose exactly what goes into your order. Plus I love Mexican food. Mr. Micah and I periodically get burritos there for dinner. If we sneak in water bottles, the tab comes to under $15, too. Under $12, I think. We do that maybe once a month.

  8. Kat says:

    While paying in cash is nice, helping people defraud the government is not, Mike.

  9. Ryan says:

    True, true, true! Eating out is an indulgence. And that means when you do eat out, you need to indulge! Cheap dinners at chain restaurants are a waste of money.

  10. Proud "Defrauder" says:


    I don’t want to start a flame war here, but what, exactly, did the government do to provide excellent service to a diner? Did they refill his water? Did they bring out extra bread, verify his order was cooked properly, smile?

    No. The government had no more responsibility for good service provided than they did if poor service was provided. Why should a server penalize him/herself and share tips w/ a party that did nothing to provide great service?

  11. rstlne says:

    I pay for everything in cash anyway, but at restaurants, I separate the money into two piles, one pile for the restaurant and one pile for the server, to make it clear how much I’m tipping.

    I am aware that cash tips could enable servers to cheat on taxes, but that’s strictly between them and the IRS. None of my business, really.

  12. Susy says:

    I completely agree! My DH and I only eat out every couple months and we only go to restaurants we LOVE! We can make anything else at home, cheaper, healthier, and usually tastier!

    Our only “fast” food choice is Chipolte. And we always share a burrito there. He gets 2/3 I get 1/3, fewer calories each and cheaper!

    When we do eat out we usually share a meal, always in hopes of getting desert, but usually we end up too full on one meal.

  13. rita says:

    bull’s eye

    one of my luxury is our team’s payday breakfast…which ends up making me spend 2 day’s worth of food for a meal.

    got to cut back on this. but the memories are priceless. and since i love to eat but can only boil water, eating out is a given.

  14. DJ says:

    Good post.

    I’m not much of a foodie, but I’ve often left restaurants of the Applebees variety wishing I had saved my money.

  15. Kat says:

    Proud Defrauder,

    The government provides everyone with education, roads, water, libraries, etc. They do this by collecting taxes. When people skip out on paying their fair amount while still using the same resources, it puts a burden on the entire system.

    I am self employeed and believe me, it would be very easy not to claim some or most of my income, especially since I know most of it won’t be 1099ed. But I don’t, because it isn’t right. Besides, I like using things like the library and having running water.

  16. Mike says:


    I didn’t mean to imply that cash tips should be used to start a wide-scale revolution to defraud the government. But using your quote:

    “When people skip out on paying their fair amount while still using the same resources, it puts a burden on the entire system.”

    The extra $200 or so the IRS could get in taxes might make a world of difference to a struggling waitress at a diner. The extra $800,000 or so a multi-millionaire might get out of paying in taxes could do a whole lot more good. If you want people to play by the rules, you need to make sure *everybody* is willing to play before you come down hard on the little people who need the money most.

  17. natasha says:


    I completely understand your plight with chain restaurants, as I find myself becoming increasingly picky with the way foods are prepared in restaurants. Most of the time it’s too salty, too bland, covered in butter to mask the lack of freshness, overcooked, cold, or just plain nasty, and most of the stuff tastes like the preservatives they’re bathed in. It is almost never worth the time in the kitchen I saved to go out to a chain restaurant for food, as I’ll spend more money and have less enjoyment eating the food.

  18. Kat says:

    Maybe you should look at the state the State of California is in and tell me that a small amount doesn’t make a difference. We have a couple of million people defrauding the government who work in places like diners and because of that hospitals are closing, there isn’t enough money to build schools or libraries, fix and maintain roads.
    Look at the State of Michigan, they want their government workers to work for FREE for two weeks because they can’t afford to pay them, yet don’t want to get behind on work.
    Every “struggling” waitress stealing $200 or $300 does add up. Also you can be sure that struggling waitress is getting some sort of help from the government.
    I am struggling too, does that mean I can forget to claim a couple of projects on my income taxes? No. And neither can that “struggling” waitress.

  19. MVP says:

    I like the comment about choosing your dining companions wisely in these situations. Nothing ruins a fine meal more than an overbearing father-in-law (or someone else) who insists on making the wait staff “earn” their tip, complains about prices and dominates the conversation.

    Also, I worked for years as a waitress and never encountered the situation you described, where the restaurant keeps the credit card tips. At the least, a high-end restaurant like your talking about shouldn’t do this, so as a customer, I wouldn’t worry too much about that happening. In my experience, the server adds up his/her tips from the reciepts at the end of the night and collects the cash equivalent from the restaurant right away.

    On taxes, in my experience, the restaurant estimates a certain percentage gratuity on tax forms. I think it’s pretty fair. But I have a major problem with folks like Mike, who think just because someone EARNS more money, they should pay more in taxes. Is it really fair to penalize an entrepreneur who creates a successful product or service by forcing them to pay higher taxes? Those who are struggling have innumerable opportunities to elevate themselves in this country. Don’t believe just because someone’s working as a server in a restaurant, that means they’re struggling. In a high-end place, serving may be their career, and they may be making more money than YOU.

  20. SJ says:

    My sister has been a waitress for years, including several very high end places in NYC, and has had both excellent experiences with management and fair tip policies, and the type of abusive situation Trent describes. It does exist, far too often.

    In addition, regardless of worrying about the government and taxes, the credit card fees will take a slice out of the tip (1-3%, depending on the card), which can really add up.

  21. Mariette says:

    I never understood why people ate at Applebees and Chilis as the prices seemed really high to me for the mediocre food you are served.

  22. SJean says:

    When I was a waitress, credit tips were identical to to cash tips. The 1-3% wasn’t factored in either. Interesting to realize that isn’t always the case!

    To be the different one… Personally, I’d rather have several cheaper meals than one really fancy meal. I enjoy going out to eat, and the food is always better than what I cook at home. Cheaper doesn’t necessarily mean gross or even a chain restaurant. And maybe my tastes aren’t as refined, but I have to say I don’t hate everything applebee’s serves.

  23. Susan says:


    It’s not $200 from only one waitress that the IRS (i.e. everybody) is missing out on, it is the $200 times 2,000,000 waitresses in our country. And the person that is making millions is also paying taxes at a much higher rate.

  24. Ryan says:

    I have no problem leaving credit card tips. It keeps the wait staff honest when it comes to paying thier taxes, plus I get a 3% bonus from my Citi Professional card on restaurant purchases. And I don’t worry about the restaurant taking those tips away from the wait staff since it is illegal. If a restaurant is doing that, it’s up to the waitress to report that to the authorities.

  25. plonkee says:

    I always prefer to leave a cash tip. I expect other people can fill in their tax returns correctly without any input from me, why would it be different for waiters and waitresses.

    In an ideal world, I’d eat out at really nice places, but I most commonly eat out in average priced places (usually small chains) with a group of friends.

  26. Johanna says:

    Mrs. Micah: At places like Chipotle, at least where I live, you can ask at the counter for a cup for water and they’ll give you one for free. Then you can fill it up at the little button that says “water” on the soda dispenser. They use different kinds of cups for water and soda, and the soda dispenser is always within view of the counter, so they can keep an eye on whether anyone is trying to put soda in a water cup.

  27. Brigid says:

    Where I live, in Massachusetts, we have several very nice white-tablecloth restaurants that don’t have liquor licenses. We bring our own wine and pay a small fee to have them open and serve it. This is considerably cheaper than paying restaurant prices for wine.

    One night, when we were eating at one of these places, we got to talking with the poeple at the next table and shared some of our wine with them. When they left, they gave us the half-bottle that was left over from their dinner. It had a $200 price tag on it—far more than our modestly priced bottle!

  28. Brett McKay says:

    I totally agree with you on this one. My wife and I stick to pretty strict diets throughout the week, but we always designate Saturday as “free day.” When we go out to eat, we don’t worry about how healthy the meal is. The greasier the better!

    I should really start ordering water, but I love having a nice sweet soda to wash down a savory meal.

  29. Erich says:

    I don’t know about the laws in Iowa regarding tips, but here in Illinois, a restaurant collecting tips and not giving them back to the servers is illegal.

    For a long time I worked at a local tavern. We had a kitchen, and it was a very popular lunch spot. During lunch shifts all tips were collected into a big pool, and all staff was equally tipped out, including the kitchen staff. Everyone was pleased with this arrangement, it seemed fair to all of us, as kitchen staff and bar staff were interchangable.

    One year the gov’t did its semi-regular employment audit and told us we were in violation of the law in this tipping respect, since the employees felt that the sharing was a requirement, not a choice. It turns out that there are very specific legal rules for how tips are handled.

    I can’t remember the specifics, but the breakdown was something like this:

    Servers can be required to share n% w/ bussers, and m% with host(esses), and x% of drink tips w/ bartenders.

    Bartenders can be required to share n% w/ host(esses). And can be pooled by requirement.

    Any other sharing is voluntary. So there was an all staff meeting about this, and the end result was an agreement to do sharing the way we had before. It was a unanimous thing except for one girl. She wanted what she made and all of it. Of course she didn’t work there very long because no one would share w/ her and it turned out she ended up barely making minimum wage that way.

    Anyway, I diverged from the point a bit which is:
    Trent the instance of the christmas bonus restaurant may be in violation of labor laws. You should reccomend to a server there that they contact the govt, anonymously even, about that situation. It is an insult to the servers.

  30. Lisa says:

    I hate the idea of tips, particularly the customary percentages that are used. The gal at Denny’s works harder than the one at the steakhouse, yet 18% on a GrandSlam breakfast is nothing compared to 18% on the porterhouse & wine bill.

    Some other countries don’t do the whole tipping at food establishments thing. One just expects proper service and just payment of the servers.

    I never ask for anything special (no substitutions or anything), so why should I tip?

    Yes, I do tip, but I go out to eat so rarely now days that when I do I am in a group of more than 6 or 8 so get stabbed with an automatic 18-20% tip anyway.

  31. For a truly decadent night out, I rarely order dessert in the restaurant I’ve had dinner in. Very few great savory restaurants do great desserts.

    Instead, I go to a dessert-only specialty place and spend another $8-$10 per person to die in chocolate heaven!

  32. Amy says:

    Actually, I prefer to pay via credit card to keep the servers honest with respect to the tip out (the percentage of money that goes to the runners, bussers, etc.) I know too many waiters who’ll happily pocket a stray twenty on a generous tip.

  33. Monica says:

    I’m quite appalled by Lisa’s statement of why should she tip at all! When I was waitressing, the restaurant took 10% of all of my SALES and reported it for tax purposes. That means that whenever someone skipped on a tip (which does happen frequently) or leaves a shady 5% tip, they’re actually taking money out of my pocket. I’m paying taxes on something that I didn’t even receive. It was also my total SALES that put how much I should tip out to the bartender/bussers/hostess. What I was making in tips had very little to do with how much I tipped out. Some nights I came away with very little at the end of the night because I got next to nothing but was still expected to tip the other staff. So by taking a “stray twenty” on a generous cash tip was never a problem in our place.

    It’s nice to see that people who have never worked in the restaurant business think they know how the system works everywhere. I wouldn’t go to their workplace and assume that they’re trying to rip their fellow employees off. If anyone were truly ripping other people off, it wouldn’t take long for complaints to come through and for them to have to look for work elsewhere.

  34. Susan says:


    Hogwash, I was a waitress before I finished college and I took home $150 a night at Applebees on a light night for work that did not require a high school education.

    Tip based on how good the service and don’t feel obligated to meet some society prescriped 15-20% standard.

  35. Lisa says:

    My point was to question why we have the whole tipping situation at all when other societies do not have it and the service is still wonderful.

    In addition, I pointed out that the common amount to tip is based on the total on the bill and NOT on the quality of the service (ie: why does the steak house gal get more in tips than the greasyspoon for working less?).

  36. Kat says:

    Mapgirl, I didn’t have an issue with Trent, it was with a commenter who said they think waiters should cheat on their taxes.

    I lived in Denmark for a year. They don’t have tips. Because of this you got horrible serivce and you were still expected to round up the bill.

  37. SwingCheese says:

    My husband worked in various facets of the restaurant industry for over a decade, and I can assure you that people do not always tip even 10%, let alone a customary 15-20%. I also have a friend living in a large city, supporting herself as a waitress, who recently received one $6 tip on a $96 bill, and received $140 on a bill for $133.75 and was told to “Keep the Change”. Stingy people are all over, and 99% of the time, the quality of the service is immaterial…

  38. jennifer says:

    as far as the taxes waiters pay and cheating the irs…i remember when i waited tables, i had to declare a certain percentage of my sales as tips (at the time it was 8%). so, if someone stiffs you or tips you less…guess what? i still had to pay taxes on my sales!! so the people who tipped me cash at 15-20% helped make up for the people that didn’t tip at all! also i didn’t make minimum wage in the 10 years i waited tables–it was alway something like $2 and hour..it was assumed that tips would balance out your $2 hourly wage. it’s been about 8 years since i waitressed….not that much could have changed!

  39. Ed says:


    You offer even further proof that wait staff are stiffing the IRS (in effect everyone since that shortfall has to come from somewhere). So the 2% or so of people that stiff you on a tip gives you the right to only pay tax on 8% of the rest of the tips? What about those that pay more than 20%? I love how people try to rationalize doing something illegal. Get some ethics.

  40. Ralphie says:


    Put a cork in it already. There are systems in place to deal with wait staff and income taxes. This is way ofd topic. Perhaps you think waiters are terrorists too? ;)

  41. Susan says:


    What the heck are you even talking about? Talk about being off topic.

  42. Bill says:

    We eat out as a family fairly often, but never do chain restaurants, or high-end places either.

    Just locally-owned restaurants, mostly ethnic (Indian, Chinese, Mexican. etc.) who serve food they actually eat, not exclusively “Americanized” versions.

  43. Annie says:

    The “Christmas bonus” restaurant made me suspicious, so I did a little research. The Department of Labor’s Wages and Hourly Division website has a copy of the Fair Labor Standards Act, as well as a summary:
    “Tip Credit: Employers of “tipped employees” must pay a cash wage of at least $2.13 per hour if they claim a tip credit against their minimum wage obligation. If an employee’s tips combined with the employer’s cash wage of at least $2.13 per hour do not equal the minimum hourly wage, the employer must make up the difference. Certain other conditions must also be met.”

    If the restaurant is taking ALL the tips, all the time, there’s no way their waitstaff is making $6.20 an hour.

  44. MamawW says:

    Since I often have much cash on me I ask the waitress or the pizza delivery guy do you get this tip. I like to use Discover get the credit on cash back and yes I pay the car in full each month.

  45. Amber says:

    Okay I was reading these comments and I have worked as a server for 7 years now and at every restaurant I’ve worked at. You are responsible for claiming anything over the 10 percent of sales that the company expects you to make. If anyone is defrauding the government it is because they are lying on a piece of paper or in my case a computer at the end of the night of how much they actually made. This means credit card tips as well as cash. In my company the management staff checks periodically that everyone is claiming a reasonable amount. Most of us get our taxes back anyways because we don’t make much money. Actually we do make a good amount of money hourly, but it is hard pressed-very much so to get more than 20 hours a week and that is if you are full time. Servers only serve during peak hours then most of the staff goes home that’s about 3-5 hours a day. Remember most servers are not just servers. Most of us are college students or newly out of college and paying off loans. Not tipping us properly is akin to an employer not paying their employees for their time-not okay in this country. Oh and PS you have to be fairly intelligent to be a server and you certainly have to know how to multitask and hide true feelings behind a smile, so please don’t talk down to your server she/he might be the doctor or lawyer you depend on later in life.

  46. Regarding the cash tip for the waitperson. I, too, always leave cash, but the reason is different. The restaurant has to pay a credit card processing percentage on anything it charges to my card. #1. Making the restaurant pay a fee on the gratuity for the waiter seems wrong. and #2. I don’t want the restaurant management to use this fee as an excuse to take money out of the waiter’s tip.

    Pay the bill with a credit card, but tip in cash always!

  47. Nitin says:

    @Trent: It is not good for digestion to drink water 1HR before and after your meals.

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