Monday, June 4, 2018
2018: The Summer of Booze?
As we just rolled through our first full gorgeous week of weather this year, thoughts go to outdoor patios and backyard BBQ’s where the clothes get smaller and the drinks get bigger. Seems like summertime is synonymous with boozing. Heck even our possible future leader Doug Ford, I pray not, is proposing bringing back cheap booze for all! Buck a beer baby! That will solve all our problems! I often look back at all the good times I have had and wonder how much I spent on booze. It’s a scary thought. One thing is for certain, my life got dramatically better when I stopped drinking on a regular basis. Now I would never say I was an alcoholic. I wasn’t addicted to drinking, I was more addicted to going out and hanging with friends. It just so happened that every time we went out, the night was centered around booze. Today, I am going to speak about the true cost of drinking alcohol to your financial future. Oh yes, I won’t even get into how bad it is for your health, which is in fact, very, very bad.
My boozing days
I don’t remember much from the ages of 18-25, but I do remember one thing, I was always broke. I may have acted like I had a lot of money, but I really didn’t. Going to the bar with my last $300 was a staple. Me and my top dog even had nicknames for each other, ala Batman and Robin. He was “Shot Man,” and I was “Drink Boy.” He would buy the shots and I would buy the drinks. By the way, a real drink is a double, minimum. Single ounce drinks need not apply. We were those guys at the one end of the bar with 30 drinks in front of us. Pretty disturbing when I think about it. It was not uncommon to spend $100-200 a night crushing drinks and crushing dancefloors while we were at it. PS: My boozing days ending coincided when good music stopped coming out. Coincidence? If you factor in 5 years of straight-up debauchery times 5 nights a week, I blew a lot of money in Downtown London, Ontario. $130,000 is $100 x 5 nights a week x 52 weeks a year x 5 years. $130,000. I repeat, $130,000. I will say it one more time, $130,000. You might say, “There is no way he spent that much boozing.” I call that a low-ball estimate. Remember, I said 5 nights a week. There were many weeks where we went out every night. I also said $100. There were many nights when I spent $200 or even more at the bar. The actual figure could be closer to 150K or even 200K. Puke.
Prioritizing Your Spending – Budget Boss
Age 25 and beyond
I worked very hard throughout my early adulthood, and sadly had nothing to show for it. I’m sorry, I misspoke. I did have something to show for it, about 50K in debt. Student loans, credit cards a pesky line of credit plus every oddball debt you could think of including Rogers Cable, family and friends. I made a choice around the age of 25 to not be in debt and drink as much anymore. Partly because I was sick of having no money, partly because my doctor said binge drinking was affecting my health. Over the next 5 years something dramatic happened, I stopped being a broke-ass fool. I turned 50K in debt into 50K in savings in 5 years and huge part of that transformation was not boozing it up. Student loan, gone. Consumer debt, gone. Owing family money, gone. Money in the bank, shorty what you drank, check. Was I as fun of a person? Probably not. Was I really that fun of a person to begin with? Probably not. We were all pretty drunk back then. I don’t miss going to work hungover. I don’t miss being late on rent because I am broke. I don’t miss having my new shoes stepped on in a crowded bar. I do enjoy seeing several zeros in my bank and investment accounts instead of seeing one lonely zero. I do enjoy not thinking about the cost of a bill when I do go out, instead of drunkenly crunching the numbers in my head while counting the money in my pocket. Things have changed, big time.
Drinking away our savings – Financial Post
The real cost of alcohol
When I look at the money I spent on booze, I don’t even think about the more than 130K spent. I think of the opportunity cost associated with spending that money. I think of the home I could have paid off by now. Or the rental property that could be providing an income by now. Or the investment account that could literally have hundreds of thousands of dollars in it by now. Check this out so I can illustrate my point:
$100 a night x 5 nights a week x 52 weeks a year x 5 years = $130,000
$500 weekly contribution to an investment account over 5 years with a 7% annual return:
= $155,465.56 with $25,465.56 interest earned
That $155,465.56 if never touched again, from age 25 to age 65, with a 7% annual return:
= $2,535,869.90 with $2,380,403.90 interest earned
2.5 million folks. 2.5 million. I will say it again, 2.5 million. That’s with no additional contributions over the 40 years. That is the money just sitting in an investment account, gathering interest as the years go by. That’s what makes me sick. Not the 130K, because I know I will make that again in my lifetime, many times over. It’s the time and opportunity lost. Now you might say, “I don’t spend as much as you did on booze, so back off Dad!” Fair enough. Maybe you don’t spend as much as I did on booze. The bigger question then becomes, are you saving and investing while you are spending on booze? Even something as simple as $25, twice a week is $2600 annually. Are you saving that much annually? $50 a week from the age of 20 to the age of 65 equals $769,451.45. In a TFSA it’s tax-free by the way. Are you saving that much? I know I wasn’t before I stopped boozing.
The True Cost of Wasting Money on Getting Wasted – Cait Flanders
The point of this post
I am not telling anyone to not have fun. Heck, I am not even telling people not to drink booze. In fact, I think everyone should have fun here and there because life is damn stressful. It is also good for the economy and helps local businesses, some of which I have worked at or have friends that own. What I am telling people is that wasting a large portion of your money on booze is pointless. You are literally pissing your money down the drain, or urinal, or alley outside a bar. If you intend to have a decent life, you need to save and invest your money. If you cannot save and invest your money because you are poor from boozing, then your priorities are not straight. I always used to think that drinking helped me let loose and forget how tough life can be. Now that I don’t drink as much, life isn’t as tough, and I don’t need to let loose to forget how hard life is. Kind of a big coincidence isn’t it? Yes, there are big coincidences. Grab a beer or glass of wine and crunch the numbers on how much you are spending on booze on a weekly basis. It might scare you. Cheers!
“Every form of addiction is bad, no matter whether the narcotic is alcohol or morphine or idealism.” – Carl Jung
Email – joe@budgetboss.ca
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