Updated: Jan 31, 2021
My wife and I recently quit drinking. We're at that age where it just wasn't working for us anymore. Even 1 drink caused us to wake up with a bit of a headache, dehydrated and sluggish. Would cause our heart rates to spike, and our guts to twist up a bit. So we made the decision that we didn't have room for it any longer and we quit.
We honestly don't miss it much. Of course it helps that we are locked inside due to the the ‘Rona 2020 Tour thus not sitting in restaurants or sports venues with it beer flowing all around us. We may go full blown Doug & Doug McKenzie when this all ends though, who knows.
So I was thinking - how much have we spent on booze? I was most interested in the past decade. What if, instead of putting that money into IPAs, we put it into IRAs? (Love a good Dad joke) A nice, frothy S&P500 index fund each year. What would the overall financial impact be?
So I did some quick math - and it was...alarming to say the least!
$2 per drink: So I figure that each serving cost us $2 per. Obviously drinking at home is a bit cheaper than that, but a beer at a restaurant or a ballgame costs significantly more.
30 per week: I figure that between my wife and I we had 30 servings per week. Some weeks were less, some weeks (embarrassingly so) were more. But on average, we chugged down 30 drinks per week (not always beer, but more often than not it was).
$3,120 per year: So, easy math, 30 drinks per week at $2 a piece, times 52 weeks means we spent over 3 grand per year. Ouch!!! That's a chunk of cash flow! Based on the 4% rule we'd need to have an extra $78,000 saved just to cover our booze expenses in retirement. B-R-U-T-A-L! But it gets worse...
$68,181 last decade: I captured the S&P 500 returns each year over the past 10 years to determine how much we would have today if, instead of buying a nice cold brewskie, we bought a nice cold slice of the market. Well we'd have $68,181 more in our accounts today! I hate that we've pissed away that much money. (Another solid Dad joke)
I'm thankful that we decided to stop drinking - both from a health standpoint as well as a financial one. Although I did enjoy the cold beers at a ballgame or in the backyard, I didn't get anywhere near $68k worth of enjoyment out of them. It's all about the cost benefit analysis with our purchases.
You can do a similar calculation yourself, for any expense that is unnecessary. There's a handy-dandy calculator here. Some unnecessary expenses are worth it, they add a little spice to life, while others are simply are not. You get to be the judge.
Wanna support this blog?
Personal Capital: My go to place for tracking all things Net Worth.
YNAB: My go to place for managing my spending and budget.
Betterment: I use this account for general investment purposes.
M1 Finance: I use them for my dividend stock investments.
SoFi Invest: This is where I make individual stock investments.