Alcohol and Finances

 

My DIY Kegerator

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

 

What a beautiful creation...
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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.

Values Couple Exercise

Click this image for a link to some of the exercises we did. Starts around page 10.

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.

CHEERS!

Cheers!

 

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.

22 thoughts on “Alcohol and Finances

  • For my husband and I, it’s BRUNCH! We go out every weekend and have brunch at different cafes. We love to enjoy brunch together on Saturdays as a fun date, then on Sundays we often have brunch with friends.

    This is an expense that we have budgeted for and we are so happy that brunching is in our lives! It is aligned with our values (such as supporting local cafes, getting out and seeing new parts of our city, spending quality time together etc) and.. we love good Aussie-barista coffee!

    Great post Joel.

    • Nice! There’s certainly no shortage of brunch places. As long as it’s budgeted and all other priorities are taken care of, there never a need to feel guilty. Enjoy it!

  • Having beer on tap anytime would be great! Especially here in Utah where you can’t get beer on tap above 4% anywhere. Home brewing seems like a lot of work though. How’d you get into it?

    • Definitely a lot of work! My brother bought me a starter kit for Christmas 2012. I somehow fell in love with the science behind it all. The worst and most time consuming part is bottling. Saving, cleaning, sanitizing, and filling all the bottles sucks. I suffered for nearly 2 years before switching to kegging. Now, I just buy kegs at the store. Problem is they don’t last long!
      Didn’t know about the 4% cap. it draft in UT. Sounds horrible!

  • We pick up beer / hard cider at the grocery store during our weekly shopping trips, so I guess we’ve been including alcohol in our food expenses. Whoops. Now I’m curious enough to go back through the receipts and parse it out!

    • We do the same, but I split the expense into two different categories within Mint app. I wonder how much money I will spend on alcohol for my entire life. Maybe I can write a blog post when I am 90 years old titled “I’ve drank $1M with of alcohol”. Ouch.

  • I’m impressed by your transparency. When I worked out my actual values and the amount of mental effort I was spending on managing my drinking, I decided to try one year sober, and it made much a profound difference in my quality of life, I’m now just sober. I never could have dreamed I would give up alcohol, and wasn’t officially an alcoholic, but it has given me so many hours back into my life. For me, developing financial integrity meant that I learned to value my time more than booze and any friendships I believed were based on a mutual love of booze.

      • That’s a good question. I think I just finally was getting tired of my own BS trying to justify and manage it all. And then when I took this particular online finance course it talked a lot about the power of marketing, feeling like we need to fit in with what we perceive as society’s expectations, the labels we’ve unconsciously given ourselves that are no longer serving us– all that stuff that people pursuing FI should be mentally grappling with. And I looked at the homeless folks on the street, drunk or on meth, and I wondered if my life is so great, why do I feel like I need to alter my consciousness just like these unfortunate folks do? When a friend brought up the idea, I decided that alcohol had been an integral part of my life for so long, why NOT just experiment for a single year out of my life. I couldn’t think of any legitimate reason not to, but a bajillion of reasons I should.

      • (I tried commenting earlier, so delete if duplicate) There were so many factors that went into the decision, but bottom line, I started suspecting that just like I didn’t have to believe a lot of other stuff we are told is “normal” but actually holds us back from realizing our true selves, this could be one of those things. I was also so tired of all that mental management that you describe above. When a friend mentioned the idea of a year’s experiment, and then asking yourself at the end of the year– is my life noticeably improved? I decided to call it an “experiment with sobriety” since alcohol had been an integral part of my life my entire adult life. I have a lot of knowledge about all kinds of alcohol from working in fine dining for years and enjoyed all kind of alcohol. But what I say now, is that sobriety feels so good, if it were a pill, everyone would be taking it. A friend told me that I seem like myself, except turbocharged. I am amazed to find myself loving it.

        • Dude, thank you so much. This all makes sense. It kind of reminds me of why I started getting up at 5am. It’s against the norm, but extremely rewarding. I never thought I would do it, but somehow I feel better because of it. I just needed a mind shift and a commitment.
          Thank you – it’s so good to hear you are loving sobriety and have found a better self. I like how you called it a “challenge”!

  • Alcohol is so hard on the body. The dark beers and wine. How do you deal with “the next morning” almost every day?

    If you drink that much as to it being your 4th highest spending category, I think you fall into the “binge drinking too much category”.

    Houston, we got a problem….If you can skip monday thru thursday, but Friday and Saturday you drink..I think that is on the journey to being an alcoholic.

    Time to cut back in my mind. Thanks for sharing and being so honest.

    • Thanks for your concern! We don’t really drink to get drunk… So not too many drinks at one time. We just love beer and wine! We definitely understand it’s not healthy at all.

      Typically, we finish early, like 7 or 7:30pm and have tea or hot water until bedtime. So the mornings are OK – I’m still up at 5am and feeling good.

  • Great blog and very inventive way of determining your budgets. We have always prioritized our weekends with friends and family; and along with that great food and wine….David never took care of our finances, always too busy with other priorities, but nevertheless, he maintained a sense of where and how much money we had to spend. Wine became an obsession over 20 years, where we are brimming with lockers-full and cellar-full…The thing now is, it’s an investment. All the wine has increased in value, some exponentially. The only way we control our “wine” budget is to have a moratorium on buying…and then a good deal comes up and poof, it’s gone! But as retirees, unless it’s a special occasion, eating and drinking in much more pleasurable than eating out…and that’s where we save!

  • You don’t write about the volume you consumed at those various dollar levels. You also don’t say how often your drink today (days per week when alcohol is consumed).

    I live near wine country so I have a nice wine collection from wine tasting weekends. I like reds to – merlot, cabernet sauvignon & cabernet franc, sometimes a zinfandel.

    However as I got older, the effects of alcohol became more pronounced. Two drinks would leave me feeling a little bad in the morning so I cut back to one drink per occasion.

    Much of one’s attitude towards alcohol is learned from one’s parents. I was taught that if you drink everyday, you are an alcoholic. I was taught that if you drink before noon, you are an alcoholic. I was taught if you drink by yourself, you are an alcoholic. Foremost, I was taught that being an alcoholic makes you a horrible person…one step above being a child molester. Therefore I never drank too much. Sometimes for bachelor parties and other events but by and large, I have been extremely temperate w.r.t. alcohol. As you get older, there are fewer social occasions where drinking is actively encouraged.

    I don’t budget but if I did, I guess I would budget $5/month – which if I did budget would be too small to have a line item. Maybe add $5 per month because I use cheap wine ($1.99 per bottle) for cooking as it is cheaper than cooking wine. My guess is I have six drinks per year. I can remember the last two drinks I have had. Three weekends ago, I had Gin & Tonic at dinner because it was the house specialty. I bought a round of beers at a baseball game in April since my ticket was comped. Before that I cannot recall the last alcoholic beverage I consumed. It was before Christmas.

    • Thanks, Dan. Wine country is beautiful, you’re lucky to live there! I grew up near some great wine regions too. Cab Sav and Pinot Noir are my favorites when I go tasting.

      Sounds like we had a slightly different upbringing. Thanks for sharing. I agree it’s important for parents to teach kids the dangers of alcohol. I grew up in South Australia where the drinking culture is prominent (and the wine business is HUGE). Education about alcohol was ever-present.

      Personally I don’t believe that drinking daily makes one an alcoholic (or that alcoholic = horrible person). I know many people who drink most days, sometimes before noon, and have a glass or two by themselves on the odd occasion. However I recognize that Alcoholism is a serious disease.

      Glad to hear you use the cheap wine for cooking. My wife does too when she makes her famous beef bourguignon. Delicious!

  • I worked with a guy that was a recovering alcoholic. He was very candid about his past troubles. As an adult, I have learned that many of the things my parents taught me about alcoholics as a boy are rooted in reality. Many alcoholics cannot go a day without drinking. Many alcoholics drink alcohol first thing in the morning like others drink tea or coffee. Many alcoholics drink alone to hide the extent of the consumption. Are alcoholics horrible people? I don’t know but I will say that any addict has their sense of judgment impaired and is capable of behaving in shocking ways. The label of “alcoholic” is by definition a label of someone with a problem. Some consider it medical, some consider it a matter self-control but there is consensus that a problem exists. I am wary of alcoholics just as I am wary of drug addicts or people with gambling addiction.

    I went to university in the United States where the drinking culture is prominent and many of my classmates were alcoholics. Some of them didn’t “need” to drink as much as needed to be accepted but that’s splitting hairs. Some of them flunked out. Some of them were what is called “functioning alcoholics” meaning they were able to maintain their studies and graduate. Many of them got married and had kids so they voluntarily cut their alcohol consumption drastically if not completely to zero. I don’t subscribe to the idiom “Once an alcoholic, always an alcoholic.” Put people in specific circumstances, some people will become alcoholics. Take them out of those circumstances and they become teetotalers. Put them in another circumstance and they are something in between.

    • Thanks, Dan. Reading your comment raised an interesting point for me about my definition of an alcoholic.

      I don’t have all the answers (and depending on one’s upbringing, culture, religion, age.. perhaps there are many answers). I agree that putting people in different circumstances contributes to their learned acceptable behaviours.

      Truthfully, I haven’t given much thought to this before. Thank you. You’ve given me a lot to think about.

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