How much your bottle-a-day alcohol habit is ACTUALLY costing you

When you learn how to think about money the right way, the numbers behind bad habits like drinking alcohol become truly shocking.

That’s because you’re not only paying the cost of the bottle of wine you drink every night, you’re paying the opportunity cost of the positive things you could have done with that money.

Last week, I wrote about how I’d spent a staggering amount of money on alcohol over the years.

This was a depressing calculation, but an inspiring one as well.

Now that I’m 60 days into my current sober streak, I can already see the positive impact on my wallet. Keep it going, and more good things will come.

I was still too scared to do the compounding calculation of what more than a decade of heavy drinking cost me, so let’s try it as a theoretical exercise instead.

The true cost of drinking

Let’s say you drink on average one bottle of wine per day, or spend about $12. This is not uncommon for a lot of people who want to cut down.

There might be some days where you don’t drink at all, and some days (holidays, parties, etc.) where you binge at a much higher cost.

For the purposes of this exercise, however, let’s stick with an average of $12.

So our average for the week is $84, and for the year it’s $4,380.

That’s bad enough as it is, but what happens when you consider the power of compounding?

In other words, what if, instead of spending that money on alcohol, you invested it every week at an 8% rate of return (for comparison’s sake, the S&P 500 returns, on average, about 10% a year, so we’re being a little conservative here).

I credit my favourite self improvement book of all time — and frankly the only self improvement book I think you really need — for getting me to think about money this way. The book is called The Compound Effect and it was written by Darren Hardy.

(Side note: I’m dropping my affiliate link for this book right here because, as I said, I think it’s one of the best self improvement books available and the paperback is only nine bucks because it’s a bit older.

I prefer listening to self improvement books rather than reading them, because the audio is often inspiring in and of itself and I can listen while out on a walk. That’s certainly true of the high energy Darren Hardy. If you’re new to Audible, you can use my affiliate link here to get a couple free books with your membership and make this one of them. OK, I digress).

The power of compounding

So what would happen over five, 10, 15, and 20 years if you put $12 per day into your investments rather than into the purchase of toxins?

After five years at 8 percent, compounded monthly, you would have $26,745.58.

After 10 years, you would have $66,592.36.

After 15 years, you would have $125,957.91.

And after 20 years, you would have $214,403.43 (!).

If someone offered you almost a quarter of a million dollars in a lump sum to quit today, would you do it?

This piece isn’t meant to be depressing, though I understand how it could be if you’re in my position and pissed away close to 15 years of time and money.

I do think it’s important to acknowledge it and then let it go and focus on the amazing, positive things coming in the future, however.

The quicker you make a change, the quicker you’ll actually have some change to spend and be on your way to huge gains in the future.

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