How Alcohol Impacts Your Budget

How Alcohol Impacts Your Budget

When you think about your household budget, do you consider how much you will spend on alcohol each month? Do you think about how alcohol affects your health - both physically and mentally? Do you know the risks of consuming too much alcohol? You will get answers to these and similar questions in this article.

At home (what you spend per week on beer/wine/spirits $)

Alcohol can bloat your budget similar to your midsection. Alcohol usually gets lumped into the food or groceries category, so it is hidden. Having it as an explicit budget item sheds light on the story and allows you to track it.

How much money should you budget for alcohol? According to statistics, Americans set aside one percent of their annual earnings on the purchase of alcohol. The average household spends $11 a week on alcohol which works out to $572 a year on alcohol. However these averages include all the dry households too, which skews the distribution.

The average price of a bottle of white wine is $14.41, and the average price of a bottle of red wine is $15.66. If you buy a bottle of wine a week for a year, you will spend more than $1,563 per year.

For a personal example, back when I was drinking 3-4 IPAs per night I was spending $50 per week on beer, which comes out to $2,600 per year! Those were fun times, but also wasteful. I’m glad I have since stopped (5 years dry).
 

At restaurants (what you spend when you eat out or go to a bar $$)

The average American spends $232 a month eating outside the house. Drinks at restaurants and bars are typically 2-3 times what you would pay for if you were drinking at home. Having a specific category for ‘bars’ or ‘restaurant drinks’ may be too much work, but consider that a good percentage of your restaurant budget is going to drinks.

When I stopped drinking at restaurants I would order root beer or ginger ale instead which isn’t cheap, but we still saved a bit on our dining budget.
 

On vacation ($$)

When going on vacation it makes sense to set an overall budget for the trip. With hotels and plane tickets purchased in advance that only leaves food and entertainment as variable items. It all depends on the destination where you are going on vacation. That said, the total cost of a vacation including travel, accommodations, car rental, etc is going to dwarf the alcohol cost unless you are a really heavy drinker :)
 

Parting at clubs ($$$$)

Drinks at clubs are super expensive. It is the experience and atmosphere you are paying for. Looking at clubbing through the lens of a budget conscious person is the exact opposite of the “guys / girls night” vibe you are doing for. So budgeting for “nights out” or “entertainment” is just fine.

During my first job back in the 90s at the local mall I had a coworker who said she worked two jobs just to keep up. I asked “keep up with what?”. She said “no money for clubs and drinks, no friends…” She was working 60 hours per week across two retail jobs at close to minimum wage. All just to keep up with her circle of friends who make a habit of racking up huge bar bills. I remember being amazed and a little disappointed at her lifestyle choice. I was 16, she was 22 (and out of my league), but it was evident we had very different priorities.
 

Moderate Use and Positive Impacts On Health

Drinking in moderation is not only socially acceptable in most circles, it has beneficial side effects to your health. My great grandmother lived to be 103. She would open a can of Coors Light, drink half of it, then put it in the fridge and drink the rest the next day. She also ate bacon, eggs, and made legendary waffles.

Half a beer a day for a woman is well under the CDC’s guidelines for maximum alcohol intake. If you can keep it to that, good for you and your budget.

My problem was, if I drank one, I would want another, then another. After about 10 years of regular drinking I was struggling to stay below the CDC’s guideline of 14 drinks per week for men. Unfortunately, I didn’t get the gene for moderation from my great grandmother. I got the hard core alcoholic gene which both my grandfathers suffered from…

This leads us to the next section, on the negative impacts of alcohol on your health.
 

Excessive Use and Negatives Impacts On Health

People who drink alcohol in large quantities are at risk for various diseases including an increased risk of many types of cancer. There’s nothing like a life threatening health diagnosis to ruin your budget.

Here is a list of the main health problems that come with excessive alcohol use.

  1. Diarrhea / IBS - alcohol irritates both the small and large intestine and for this reason leads to diarrhea as a long-term problem.
  2. Heartburn / GERD - alcohol relaxes the muscle that keeps the acid out of your esophagus, the tube that connects your mouth and stomach. This acid can cause scarring and lead to esophageal cancer or Barret’s esophagus.
  3. Kidney disease - if you drink alcohol for many years, your brain releases a hormone that prevents the kidneys from producing too much urine. This puts extra strain and the toxic effects of alcohol can deplete your kidneys.
  4. Cirrhosis of the liver - if you drink too much alcohol, the liver becomes fatty and accumulates dense fibrous tissue. This restricts blood flow, which prevents liver cells from receiving nutrients for survival.
  5. Alcohol weakens the vascular system - if you drink alcohol for many years it can weaken your arteries. Over time, alcohol causes the heart muscles to relax and stretch, like an old rubber band. It can't even pump blood, and that affects every part of your body. In addition, too much alcohol can increase blood pressure.
  6. Hearing loss - if you drink alcohol for a long time you can lose your hearing, because alcohol weakens the nerves and small hairs in the inner ear that help you hear.
  7. Pancreatic cancer - the pancreas is responsible for the production of insulin, and if you use alcohol for many years, it can lead to serious damage, which prevents the production of insulin, and also leads to pancreatic cancer.
  8. In addition to illnesses, habitual alcohol use can also cause hangovers, depression, irritability, colds, and pneumonia. It can disrupt menstruation and fertility in women. In general excessive alcohol use puts you at higher risk for a long list of maladies.
     

On your sleep and mental health

Alcohol, while it seems like it makes you sleepy, actually messes up a person’s sleep cycle and can lead to insomnia. Alcohol can help you “pass out” more easily, but causes intermittent sleep and nightmares.

I have had some of my worst nightmares after drinking 3-4 beers while watching zombie shows… yuck.

A night of poor sleep can lead to drinking more coffee the next day. That in turn can keep you awake when you want to fall asleep. The cure for that would be drinking alcohol before bed, which causes the cycle to repeat…

Alcohol can also hurt our mental health - primarily linked to anxiety and depression. These two are exacerbated by poor sleep. In extreme cases it is associated with suicide, self-harm, and psychosis. Wondering how? If you are anxious and drink a little alcohol, it can reduce your anxiety. In fact, alcohol is a great way to push down emotional stress, physical pain, and numb ourselves. But perversely, alcohol actually causes anxiety to increase overall in the long term as the brain adjust to the numbing effect. From there the brain requires more and more alcohol to get the same pleasant numbing effect. Developing tolerance to alcohol is part of the process of becoming dependent on alcohol (which is what medical providers consider to be a full blown alcoholic).
 

The fine line between “enjoying yourself and destroying yourself”

Many people who consume alcohol risk being destroyed. They destroy not only themselves but also their family, health, and financial situation. Many families are forced into bankruptcy because of an alcoholic mom or dad. The lack of income and debts incurred by the person who drinks stack up.

With a “functional alcoholic” most of their money is spent on alcohol, and most of their time is spent drinking or sleeping it off. Meanwhile the family suffers from a lack of support and has to get by on their own.

It is okay to surf the abyss but if the abyss looks back at you, it is probably time to get some help. A few lucky alcoholics go for counseling or even rehabilitation. That can be costly if not covered by insurance but it is worth it compared to the alternative.
 

Conclusion

Alcohol not only affects the budget, but also the health of the person who consumes alcohol. Alcohol is fine if consumed in moderation (like my 103 year old great grandmother). When it gets out of hand you are not only hurting your budget you are also hurting your body. I speak from experience after having been dry for 5 years.

The post How Alcohol Impacts Your Budget is part of a series on personal finances and financial literacy published at Wealth Meta. This entry was posted in Budgeting, Risk Reduction
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