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How Much are Your Vices Really Costing You?

Written by Hank Coleman - 6 Comments

How Much are Your Vices Really Costing You?
Do you drink beer? Do you smoke cigarettes? Do you love your morning latte on the way to work? Of course you do. But these little habits may be costing you more than you think and doing serious damage to your financial future.

I’m not knocking your vices — we all have them — but many of us also make the mistake of not realizing just how much those vices actually cost us. Those packs of cigarettes and cups off coffee can really add up.

Adding up what your vices are costing you over the course of a year (or more) may help you put your habits into perspective.

Lattes… Everyone’s favorite expense to victimize

Ever since David Bach wrote about the Latte Factor in his bestselling book, The Automatic Millionaire, gourmet coffee has been vilified by everyone from financial planners to frugality zealots. The theory is that, instead of spending money on a daily latte, you could save a small fortune by brewing your coffee at home.

Granted, you’ll miss out on the ambiance, professional baristas, and other factors that go into your morning latte. But, with the high quality coffee makers that are on the market and the availability of an incredible array of coffees, home brewing has never been closer to the coffee shop experience. While purchasing a cappuccino at your favorite coffee shop will set you back about $4 on average, brewing it yourself at home can cost you significantly less than $1 per cup.

If you were to brew your own instead of buying a cup of coffee on your way to work, your savings could be about $700 per year, and that doesn’t even factor in the savings associated with not picking up that blueberry muffin on the side.

Energy drinks are the new lattes

Coffee is no longer the beverage of choice for today’s younger workers. Nowadays, young consumers are latching onto energy drinks, which seem to have enjoyed incredible growth in popularity since their introduction over a decade ago.

Despite having slowed to a modest 4% annual growth rate according to Beverage Spectrum Magazine, the energy drink industry has continued to grow into an industry with $4.8 billion in annual sales. Products in this niche now include energy shots and relaxation drinks, as well.

I never realized how much energy drinks cost until I saw the price of a case on the shelf at my local warehouse club. Energy drinks are far from cheap to purchase, with a typical price tag of $2 or more for a can. If you drink several cans throughout the day while at work, you’ll put a serious dent in your wallet — on the order of $1000-$1500/year.

Two packs a day really add up

When you do the math, the costs of smoking can really add up. A pack of cigarettes can cost $4-$5 (or more!) depending on where you live. So someone who has a two pack a day habit could easily be spending $240 per month, or $2,880 per year. Even cutting back to one pack per day can significantly increase your cash flow. If you were to quit smoking completely and invest that $2,880 per year and it grew at 8% annually for 20 years, you could amass over $104,000.

Putting your vices all together

These vices can have a real impact on your finances when viewed separately. So just think how much damage you could be doing if you add two or more of them together. For example, if you smoke two packs per day and stop for a drink at your local pub a couple nights per week, you could easily burn through several thousand extra dollars every year. The costs tend to sneak up on you before you realize it.

Do I really think that you’re going to give up on your morning coffee run? No, of course not. But I’m hopeful that you’ll at least be honest with yourself about how you spend your money. I know that I’m personally not saving enough for retirement, and I often justify it in my mind by saying that I simply don’t have enough money.

When it comes right down to it, the truth is that I’m choosing to spend my money on other things instead of saving it. Your vices can really add up and become a budget buster if you’re not careful with your spending.

What are your vices? And have you done anything to reign in your spending on these things? Or have you decided that they’re worth the cost?

Published on December 1st, 2011
Modified on December 26th, 2011 - 6 Comments
Filed under: Frugality

About the author: is a freelance writer who has written extensively for many financial websites and publications. Hank holds a Master's Degree in Finance and is actively pursuing Certified Financial Planner status.

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6 Responses to “How Much are Your Vices Really Costing You?”

  1. 1
    JR Says:

    Little expenses can add up. But I need know how they fit within the big picture or it might not be worth it.

    I budget a fixed amount for savings (30%), needs (50%), and wants (20%). So I can blow all of my spending money on nice restaurants, expensive lattes, gifts for my family, or whatever other splurges make me happy. No guilt. But just cutting down on eating out for the sake of saving more money would make me resentful and might trigger spending in other ways.

  2. 2
    Sun Says:

    I don’t think you can convince people who prioritize convenience over cost. Of course, you can brew your own coffee at home. Of course, you can drink beers at home. If you value convenience first, it matters less the cost… but more on the convenience of not having to clean after yourself and not having to spend time to prepare drinks.

  3. 3
    Steve Says:

    A vice is “Immoral or wicked behavior”. Some would consider smoking and drinking alcohol vices. I am not aware of anybody who considers drinking coffee a vice (except if you’re pregnant). Are you saying buying coffee at exorbitant prices is a vice? I would classify it more as a habit.

    This article would really take off if you calculated the lifetime cost of a once-a-week strip club visit. And you could combine two or more vices, as suggested, for instance, a drug habit.

  4. 4
    Kurt Fischer Says:

    We can’t all live an ascetic lifestyle, consuming only what our bodies require and doing only what needs to be done to survive. The key point in my mind is transparency: Building a household budget and then tracking actual expenses vs. the budget. Then a light bulb may illuminate: “Wow-I spent enough in bars last year to fully fund an IRA!” Or “We could have taken a 2-week trip to Hawaii for what I spent on tobacco!” Or even “We could have paid cash for the new roof on the house instead of taking out a loan for what we spent on golf last year!” A budget, and more importantly the questions tracking a budget raises, are great tools for helping us make smarter money choices over time and, eventually, reaching our goals.
    Thanks for the post.

  5. 5
    Peter Says:

    I’m not advocating smoking (having given up the habit some 30+ years ago), but consider this from an economic point of view… If one smokes 2 packs a day there is a very high likelihood of dying early. You don’t need retirement savings if you die while still working. If you die within say 5 years of retiring you could save perhaps $ 1 million compared to the healthy one who lives to 90. Medical costs could be higher for a smoker, at least that is a popular notion, but I’m not convinced that lifetime medical costs are really higher. After all you have these expenses for only as long as you live, and here in the US the medical industry is geared to keep everyone living for as long as possible. It is well established that non-smokers live than smokers. The life-insurance companies actuaries have very good data for this and their premiums reflect it. Since there are not any flat-rate, whole-life, health insurance products (like an annuity for health care) the equation is less well established for life-time health care costs. Perhaps you could research this and write about it.

  6. 6
    Fareek Says:

    Hi, yeah you have mentioned very common habits of a person specially like me…!
    And what you asked for vices, so I’ve the vices such as eating, watching tv, spending too much time on the internet.
    I am reminded of a time that I had more addictions in there, and yet am so grateful to God for helping me through them. Brustvergrösserung

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