Skip to main content
preet banerjee

Instead of paying ourselves first, some Canadians have a tendency to play first.

For people who get paid every two weeks, payday more often than not lands on a Thursday. Is it a coincidence that bars and restaurants are often full that night?

All that going out is fun at the time, but not so much fun later when people are forced to pinch their pennies until their next paycheque.

The average Canadian spends $184 a month eating out. The average Globe and Mail reader dishes out just a bit more at $190 a month. (If you want to see how your own spending stacks up, try our interactive calculator.)

But averages can be misleading, since those who are frugal are lumped in with those who are not. For example, someone who is sticking to a budget might limit their spending to less than $50 a month. Those spending without abandon could reach that monthly average in a single night out.

As everyone who has done so knows, going out in a big city can quickly add up: Even if you factor in 'pre-drinks,' which is meeting up at a friend's place to have a few drinks and save a few dollars on booze by avoiding restaurant mark-ups, you could easily spend $40 on alcohol on a Friday night out, and that's if you stick to the top of the wine lists or share in a few pitchers of beer. Add in another $20 to $40 for food, a $20 cover charge for a club, $10 for parking or a taxi (and that's assuming you're sharing costs with a group), and another $10 in late night greasy food. All of that amounts to triple digits for a young person looking to paint the town red. If you're even remotely into fine dining, you're looking at $100 a person on food alone.

The habit of frequenting bars and restaurants starts early. Many students like to head out every weekend, sometimes on consecutive nights. The frequency might decrease shortly after graduation, but it gets pricier. After living like paupers, a paycheque opens doors to new corridors of partying. You start to enjoy fancier drinks and venues that not only cost more to get into, they require a more expensive wardrobe, too.

After a few years, most people are smart enough to realize they can still go out, without the financial hangover. The idea is simple: You can have fun now, and not suffer later, if you put a bit of thought into your discretionary spending. Accelerating student loans, saving for a down payment on a home, or funding retirement: we know the trade-offs.

One way to avoid the long-term hangover is to automate your savings or accelerate your loan repayments. After you have addressed your financial priorities, focus on not spending more than what's left.

Borrowing money to buy a depreciating asset is the worst kind of debt. And if your fancy feasts end up on a credit card balance that can't be paid off at the end of the month, a faster depreciating asset would be hard to find.

Perhaps we need to spell it out: its okay to go out and enjoy yourself but it's not okay to finance these nights out at bars or restaurants. And if you carry a credit card balance, and you're not paying it off every month, that is exactly what you are doing.

I'll leave you with a humorous peek into the future if we continue to be so comfortable with credit: this scene from the movie LA story, in which the character played by Steve Martin has to get a credit check to make a reservation at a fancy French restaurant appropriately named "L'Idiot."

Preet Banerjee, a personal finance expert, is the host of Million Dollar Neighbourhood on The Oprah Winfrey Network. You can read his blog at and follow him on Twitter at @preetbanerjee.