Are You Drinking Yourself Out of Retirement?

Do you really know how much drinking has cost you today, this week, this month and your life? Would 3 million dollars surprise you? I am guessing you probably have a good idea when it comes to this week or month, but if you are a regular drinker you are most likely underestimating the real cost of your drinking over time. The first time this realization hit me was when I was reading Total Money Makeover by Dave Ramsey and he mentioned how much money you would save over your adult life if you invested one of your monthly car payments into your retirement account instead.

So let’s take a closer look at this. First, let’s assume you spend about 11 dollars a day on alcohol and you do this over your adult life for roughly 40 years. If you were to get the average rate of return from the stock market over this time (11% from 1932-2008) you would be drinking away almost 3 million dollars. So the first question you probably ask is do you really spend 350 dollars a month on drinking? You would have to answer that, but what I can tell you is even if you are a very economical drinker, but still drink 4 or  more nights a week, it would still be easy to surpass this number monthly. The older I got the less time I spent in bars, but also the more I drank. But even if I only went 3 times to a bar over the month and spent 30 dollars a visit all of a sudden my daily “budget” for drinking just dropped down to 9 dollars for the rest of the days of the month. The honest truth I have to face is that over my drinking “career”, even with these conservative numbers, my drinking cost me 300,000 dollars. That number doesn’t sound as bad as the 3 million, but if you are familiar with compound interest the real growth of your wealth happens in the latter years, which I lost by drinking away the money in the early years.

Regardless, the scary part is this is only a tiny part of the equation. How much has alcohol cost you indirectly? For most this number easily surpasses the cost of alcohol itself.

The first area is your overall health. If you are a regular drinker it is highly likely that you have gotten more flus and colds at a minimum, but you also put yourself at a much higher risk for the biggest natural killers in our society – heart disease, stroke and cancer. Anything from the little cold to the heart attack most likely has a financial impact, whether it is the cost of cold medicine, lost wages for missing work or the substantial health related costs that comes with any major health issue. Some of you might not agree that there is a connection between alcohol and health, but I think the simple fact that alcohol is a poison, used to fuel cars, should help clarify that you do impact the health of your body and mind by putting alcohol in it, especially if you put alcohol in it on a daily basis. I will save the details of this for another blog.

A Time magazine article stated that 60% of all bankruptcies are caused by health issues and 75% of health care costs are attributable to chronic preventable diseases. Also 40% of premature deaths are caused by lifestyle choices. So the question you have to ask yourself is if your drinking has put you on the path to be one of these statistics? Personally I had a heart attack scare and all kinds of health related issues, albeit all thankfully pretty minor, but all directly related to alcohol and all cost me and my family real money.

So what other costs are we missing in this equation? This article does not have time to completely address this question, but here are some areas to think about. What have you bought when drinking that you may not have? Have you treated strangers before while out drinking? Have you bought things in stores, from infomercials or on the Internet that regularly you would never have considered doing sober? Have you gotten a drunk driving ticket or any ticket that was in some way related to your drinking? Have you destroyed a relationship, friend or marriage, from drinking that cost you money, job referrals or networking opportunities? Have you put on weight due to the impact drinking has had (extra calories, less energy for exercise) forcing you to buy new clothes more often? Did you make other poor decisions or commitments while drinking that cost you money, time or both? How much money did your spouse spend in response to your drinking and their frustration with it? This one my wife and I can thankfully joke about now, but it was absolutely an unhealthy dynamic that affected our financial situation.

I think you get the point. The list can go on and on with regard to poor financial decisions you made while under the influence of alcohol, or the influence the morning after. I am not saying all of these costs simply go away when drinking goes away. You will still want to go out, still be generous with others, still buy things on the Internet and will probably take on hobbies that offset some of these savings.  My only point is if you drink too much the cost is probably much higher than you care to realize. I know it was a bit of a depressing realization for me so I recommend you take a close look at your situation and see if any of this applies to you.

Dave Andrews