Financial Vices That Affect Your Fiscal Health
We all have our vices. In fact, evidence suggests that people are indulging more in their vices right now than before. Due to the low-grade (but persistent) anxiety of the social distancing measures and directives to stay home, people seek something to take the edge off. It’s understandable. However, some vices come with negative consequences. Many vices have negative impacts on our relationships, health, and/or finances. Financial vices can end up having major consequences.
Financial Vice #1: The Cost of Drinking
Many people are willing to spend a pretty penny on the regular consumption of alcohol. As more people are working from home, and spending more time there in general, a larger portion of the budget goes for booze.
I’ll confess that this is one of my personal financial vices. I enjoy wine with dinner and some good bourbon after a long week. And, it seems each week gets longer than the one before as we face yet another possible coronavirus shutdown. Although I have expensive tastes in whisky, my spending stays balanced since I no longer have to pay for pricey cocktails at the bar. Even though I’m still spending about the same amount, I am also earning less income turning this expenditure into a vice.
Alcohol also comes with costs beyond the financial ones. There are health concerns, particularly for people with a history of alcohol misuse, a compromised liver, and other specific issues. If drinking goes beyond a vice into an addiction, then there are potential costs to relationships, your career, and other key aspects of life. If that addiction requires treatment, the financial costs can become astronomical.
Of course, not all drinking is problematic drinking. It’s just important to be aware of the risks if this is one of your financial vices. Giving up alcohol can save you a lot of money and improve your physical health. However, if you don’t want to give it up entirely, consider reducing your consumption. You may opt to cut back, purchase less-expensive alcohol, or buy it in bulk to save money. The impact on your finances and your health may lead you to change your spending habits.
Financial Vice #2: The Cost of Smoking
As a former smoker, I can attest to just how expensive this habit is. However, the exact cost varies depending on where you live and how much you smoke. To give you an idea, a pack of cigarettes typically costs between $5 and $10. If you smoke one pack per day, that’s $35 per week and more than $1800 per year. But, the cost of cigarettes themselves isn’t the major expense. There are a ton of unforeseen costs as well.
The Hidden Costs
Increased Life Insurance: Smokers are more likely to die young and therefore have to pay more for life insurance.
Health Insurance: Smokers have more medical problems. This risk is reflected in their higher medical insurance premiums.
Health Care: Since smokers are frequently less healthy than non-smokers, they have higher health care costs.
Medications: Because smokers have more medical problems, they also pay more for prescription medicine.
Home Owner’s Insurance: Smokers are more likely to burn down their houses. This risk is reflected in higher home owner’s insurance costs.
Value of the House & Possessions: Not only is smoking a financial vice, but it also leaves a bad smell in housing, furniture, and cars. This decreases their value to potential buyers.
Car Insurance: Smokers have a higher risk of getting into a car accident than nonsmokers. So, they pay more for insurance.
Earn Less Money: Studies have found that smokers earn between 4-11% less than non-smokers. Also, because smokers earn less money, they receive lower social security and pension benefits.
Cost of Cleaning: Smokers have to spend more to keep their clothes, houses, and cars clean.
Giving up cigarettes is one way to avoid certain health concerns and a nice chunk of change. Some people don’t want to give up tobacco completely, of course. If cigarettes are one of your financial vices, you might want to switch to something like snus, Swedish smokeless tobacco that has fewer health risks than cigarettes.
Financial Vice #3: The Cost of Online Shopping
I was never a big shopper. First of all, I don’t like crowded malls. Moreover, I can’t afford the boutique stores in my neighborhood. But, online shopping has changed all of that. It’s just so easy these days! Find anything you want online, click a button, and it’s delivered to your door – sometimes on the very same day!
There are many reasons I regret that this is one of my financial vices. The cost is the most obvious. I impulsively buy things I don’t need or that I think other people would like. Or, I find great deals on expensive beauty products in bulk and end with a larger shopping cart than originally planned.
Unfortunately, this is one vice I will never completely give up, especially as new COVID variants make their rounds. However, I have learned to curb my spending. Thankfully, deleting the apps from my phone and avoiding bored-browsing has helped me get it under control. Another trick is to put things in an online cart, then give yourself a required waiting period. I force myself to wait at least 24 hours, longer when possible, before reviewing the cart and completing the purchase. This time delay gives me the perspective to realize what are things I want versus things I need. Other tips that may work for you include blocking the sites you use most or removing credit information from your browser. Whatever you can do to implement to reduce unnecessary online shopping is good for your bottom line.
Other Common Financial Vices
Drinking, smoking, and online shopping are the financial vices that I deal with time and again. However, there are many different vices in the world, and plenty of them can compromise your finances. Here are some of the other common financial vices people tend to indulge in:
Expensive Food Habits
People spend money on fast food, which is bad for health and can easily blow your budget. People also spend money on coffee drinks, bakery items, and expensive dinners. I find it easy to justify high food costs for my health. But when I look more closely, I often see that often this is just an excuse to justify when I splurge on things I don’t really need.
Marijuana and Other Drugs
Just like with alcohol and cigarettes, marijuana and other drugs can be high-cost financial vices. Recreational use is legal in many states, but comes with a steep price tag. When you calculate the additional taxes for THC/CBD products, each trip to the dispensary could cost you hundreds of dollars.
This used to be one of my financial vices. I would always say, “I know that I probably won’t win, but it’s only a dollar for a chance at the jackpot.” However, I rarely spent “just a dollar.” I would often buy multiple tickets for the same drawing. There are several drawings per week. Then there are the scratchers. It’s easy to spend a lot of money on lottery tickets in the hopes of getting more money in return. Unfortunately, it rarely works out that way.
Gambling and Other Behavioral Addictions
Playing the lottery is a form of gambling. But, gambling can take many other forms as well, some of which can be much more costly than Lotto tickets. While some people gamble for fun and can quit anytime, other people develop an addiction to gambling. This is one of several behavioral addictions. Online gaming, internet addiction, and various forms of sexual addiction are also behavioral addictions. It also includes compulsive behaviors in people whose problematic behavior doesn’t rise to the level of addiction. Any of these can cost you financially, compromise your health, and impact your relationships.
What are your most expensive vices? How do you feel about giving them up?