Food is a necessity in life. Water is a necessity. Shelter is a necessity. These are the basic things we need to survive.
But after these must-haves are covered, what is the next priority on the list?
For my wife and I, it’s alcohol. At least that’s what our annual spending reports tell us. I’ve been tracking every dollar that we’ve spent over the last six years and alcohol always comes up as the highest, or second highest category in our annual spending. (After taxes, rent, and food)
How Did We Get Here?
2012: Moved to LA. Started working from home full time and making friends with other local DINKS. Monthly alcohol budget ~$300/m
2013: Started homebrewing. Hobby turned into obsession. Brewed over 40 x 5 Gallon batches of craft beer in 2013, mostly drunk at the “daily happy hour” we hosted in the front yard with neighbors and friends.
2014: Built home kegerator. Always full, always free for guests, always new flavors to try. Craft beer industry continues to explode, we start to develop expensive tastes. Monthly alcohol budget goes up to ~$600/m
2015: Weddings, babies, brunches, beer festivals, wine tastings, etc. etc.. Not one weekend goes by without having an event to celebrate.
2016 & 17: Wife and I got new jobs. More money + less time = careless spending. Continued to develop more expensive tastes for beer and wine. Monthly alcohol budget ~$400/m (lower due to less happy hours, friends started to prioritize kids vs. drinking, and my company started to pay for drinks while out networking or with clients.)
2018: Wife and I quit our jobs. Travel, travel, and more travel means more drinking out and less at home.
2019: Reduced spending enforced. Shopping sales, better planning and switching to quantity vs. quality. So far our 2019 average spend for the last 4 months is now just ~$240/m
Are We Alcoholics?
In the truest sense of the word, No. We are not alcoholics*. There’s a big difference between habit and addiction. Our drinking is a habit, and we’re fully aware of how small habits can have big ripple effects.
“Be mindful of your repetitive behaviors. Once they become habits, you become their slave.” – Michael Yardney
To control our habit my wife and I constantly assess our behavior. We also constantly assess our finances. If we’re drinking too often, we cut back. If we’re spending too much, we tighten up the purse.
Recent examples cutting back:
“Babe, we went pretty hard this weekend. Let’s have a dry Mon – Thurs… I’ll make us some delicious tea!”
“Holy cow, we spent $100 last night at the concert. No going out for the next few weeks, deal?”
“I really want to go bar hopping but we’ve already spent xxx on beer this week. How about we pre-game at home and not spend any money at the bar (This actually happened last week – we also utilized Tip #3 of these Aussie booze saving techniques. Tequila in the bush!)
“Should we do another glass of wine?”… “Nah, it’s 8pm and we’re working tomorrow. Let’s have a hot chocolate instead.”
Value-based Budgeting & Spending:
Probably the best piece of financial advice the FIRE community teaches is try to match your spending with your life values.
The reason my wife and I have spent so much money on alcohol over the years is because we designed it that way. Good beer and wine has helped us build the awesome lifestyle that we live today. (It’s strange to admit that out loud, but it’s true). It’s helped us create a fun, relaxing, and amusing environment at our home where everyone is welcome and every day is a celebration.
- As soon as you walk into our house you will be offered a drink.
- “Cheers” is the most commonly used word at our house.
- Life is a celebration, and we want to celebrate with YOU.
We’re not surprised by our annual alcohol spend – quite the opposite… We intend it to be high. The 10’s of thousands of dollars spent over the years was purposefully budgeted and well spent.
That being said…
Times Are A Chanin’
Value-based budgeting isn’t just a once-off exercise. Since values can slowly change throughout life, spending patterns need to be adjusted accordingly.
My wife and I recently went through a couples exercise to identify/discuss our values, and the role that money plays in our life. We haven’t done this in years – It’s separate from our regular spending reviews and personal QBRs.
Here are a couple of shifts in our values that will affect our future spending:
- Travel is becoming more and more interesting to us. In 2019 our travel spending will eclipse our alcohol spend.
- Home based activities have become more valuable to us than going out to bars and restaurants. This has been a trend for a few years now, as the majority of our friends have kids and rarely go out.
- Healthcare, fitness and sports are becoming more important. As we approach our mid-30’s we are focussing on staying healthy and fit. Healthcare and insurance will become a growing expense for the rest of our life.
All of these trends are leading towards drinking less, lowering our alcohol budget, and re-allocating that money towards higher-value things.
All Things Considered
Although beer and wine is not a necessity in life, it’s one of our highest nice-to-haves. And it’s going to stay that way as long as we keep seeing value and enjoying it.
Curious to hear your thoughts… How much do you budget for alcohol and is it hard to stick to? Comment below!
*Alcoholism is a serious issue. If you think you’re at risk, talk to someone or get help. Ask yourself these questions… Is your drinking affecting your work, friends, family or financial commitments? Are you borrowing money to buy alcohol or going into debt? Do you depend on alcohol to have fun? Does your drinking hurt friends and family? Do you get black-out drunk? Ever had a DUI or do you drink-drive? Has a doctor ever told you to stop drinking?… If you’re answering yes – consider seeking professional help.