Diana Clement: How much are your vices costing you?

You don't need to be an alcoholic to spend a shocking amount of money on wine, beer and spirits. Photo / 123RF

Opinion

Is alcohol killing your finances? Be honest now. You don't need to be an alcoholic to spend a shocking amount of money on wine, beer and spirits. A couple of bottles of wine a week between two of you at $15 a pop adds up to $15,420 over 10 years. Two or three more drinks in a bar each week thrown into the mix doubles that spend.

If you're buying in rounds your spend is likely to soar. And most people who socialise this way can recount spending up large on food later in the evening when their inhibitions became alcohol infused. I did just that with industry colleagues one night before Christmas; blowing my budget and healthy eating in one fell swoop.

In late 2016, the Health Promotion Agency (HPA) published Attitudes and Behaviour towards Alcohol Survey, which looked at the drinking habits of New Zealanders aged 15 years and over. Of those who reported they had consumed alcohol in the previous week before the survey, 20 per cent had at least one experience that may be considered harmful as a consequence of drinking alcohol. The most common harmful experience reported (10 per cent) was "spent too much money on alcohol".

This equation isn't just limited to alcohol. Even coffee, which contains the highly addictive psychoactive substance caffeine, can cost the same as those two bottles of wine a week. Coffees at $5 aren't unusual these days, which can add up to $35 a week.

Cigarettes are more addictive and a one-pack-a-day habit can add up to an entire house deposit. At $40 a pack you've spent $143,920 over 10 years. In KiwiSaver at a growth rate of 4 per cent that cigarette habit would have turned into a $177,499 first-home deposit over the decade.

Spending money on alcohol, tobacco, coffee and other additions can become habitual, says Tom Hartmann, managing editor at the Commission for Financial Capability (CFFC). The big nights out can really put a dent in your budget, especially if that's a tight budget with very little "me money".

Coffee and other additions can become habitual. Photo / 123RF

I have often wondered what percentage of the average student loan was spent on alcohol as opposed to the percentage on living costs and education. Research at New Zealand universities during the 2000s threw up some worrying conclusions about Kiwi students and their relationship with alcohol.

David Towl, who was then at the University of Otago, noted that drinking had been described as intrinsic to the student culture and a more defining feature of tertiary study than academic work itself. In his research for the Alcohol Advisory Council of New Zealand, Towl noted that drinking stories were a part of group dynamics for students.

A study of 500 students at Waikato University found one of the five most common harms of binge drinking was spending more than anticipated. In that study 38 per cent reported drinking six or more drinks in succession at least weekly; 65 per cent did the same monthly. Drinking six or more drinks regularly adds up to big spending over the course of a degree.

At $40 a pack, a one-pack-a-week smoking habit adds up to $143,920 over 10 years. Photo / 123RF

Not everyone is buying two bottles of wine, or seven packs of cigarettes and the same number of coffees every week. If, however, this is you, or worse, then take a 10-year view on the effect if you keep continuing the behaviours, says Hartmann.

To change any behaviour you first need to be honest with yourself. Being mindful of how much you are spending in any area of your life is a first step to taking control of your finances.

One easy way to become more honest about it is to buy your alcohol from a different store to your groceries. Go to Glengarry, Liquorland or another store that only sells alcohol and then you can analyse your spend better.

Finally, all legal vices are fine in moderation. Just don't drink or smoke away your financial future.