Food Delivery Apps and the True Cost of Convenience - Money Tip Tuesday

Food delivery apps offer a convenient service to get delicious food brought directly to your door. But they can also pose financial hazards that can derail even the tightest budget. How can food delivery habits impact your overall financial health? Keep listening to find out.   

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Transcript:

Welcome to Money Tip Tuesday from the Making Money Personal podcast.  

It's hard to resist the ease and comfort of using a food delivery service.  Whether it's for lunch, dinner, or a few simple items you need from the local grocery store, these services bring the world to your doorstep.   

Delivery app services like Uber Eats, DoorDash, and Grubhub may be easy and convenient to use, but they can also be the reasons we find ourselves overspending on meals month over month.    

Food delivery apps can often misguide us in various ways, and their impact on our budgets is significant. How do they influence our spending habits and finances? 

Well, there's a chance you'll be paying more for the item than you would if you went to the store or restaurant yourself. Many restaurants list higher prices for items on delivery platforms to offset fees on their end. For example, a burger that costs $10 at the restaurant might be $12-$13 on the app. It's hard to say whether all restaurants increase pricing for items within the app, but I've noticed it a few times when I order some of my favorite treats from a local coffee shop in my neighborhood.  

Another thing to keep in mind is that you can expect to pay additional fees, such as delivery and processing fees. For example, most platforms charge a delivery fee, which can range between $1.99 and $6.99, depending on the app, the distance for delivery, and demand. They can charge a service fee, typically a percentage of the order, such as 10-15%. Some apps will charge a small order fee if the order doesn't meet a minimum. And then there's, of course, the tip. Although tipping is optional, it's often expected and essential to give a little extra to the driver delivering your order. Considering all the fees, a $15 meal in person could become $25+ after the fees and the tip. Not exactly a budget breaker, but over time, those fees and tips can add up to a substantial amount of unexpected costs.    

It's important to recognize that you are paying a premium for meals ordered through the apps. While delivery is undoubtedly convenient—especially when we aren't in the mood to prep, cook, and clean—the real money-saving option is cooking for yourself. On average, restaurant meals can cost up to five times more than making them at home. For instance, a deluxe cheeseburger might cost $4.63 to prepare at home, but it could cost $13.69 for takeout and $23.79 for delivery after the fees and tip are factored in. By consistently opting for food delivery, you'll end up spending considerably more on your meals. Sometimes the convenience of delivery is justifiable, but other times it's not worth the extra cost, so before opening the app to hunt for tonight's dinner, consider the significant cost savings of preparing the same meal at home.  

So, we've covered the most significant way food delivery apps can cost you more. How can we help you enjoy the benefits of these apps without overspending? Here are a few ways to minimize the chances of overspending the next time you want to order out.   

• Opt for takeout and pick up the order yourself instead of paying more for delivery. You'll avoid all the added fees, and there's no need to tip a driver.   

• Avoid using the app and order directly from the restaurant. This can reduce the processing or service fees associated with ordering through an app.   

• Use a loyalty program to save. Most apps offer a loyalty program with zero delivery fees and other savings, albeit for a monthly fee. But if you find yourself using the apps frequently enough, do the math to determine if getting on a loyalty plan will save you money.  

• Set a monthly delivery budget to ensure you have money set aside for food delivery. This is an easy way to ensure you'll have the funds available to afford the joys of food delivery without the danger of overspending.  

While food delivery services offer the ease and convenience of having delicious food and other household items delivered directly to our door, they can also lead to excessive overspending an