The financial implications of your vices.
As people fall into the routine of their daily lives, they may acquire vices as a coping mechanism, some of which could fall into the category of bad habits, and others may be considered harmless, but all of which take a toll on your finances. For the majority of people, it’s not unusual to have multiple habits that can easily add up and make it hard to take control of your monthly budget.
What are some of the most common vices?
1. Smoking – Smoking has been known to be one of the most expensive habits one can obtain and while the amount of people who smoke may be steadily declining, there are still many who regularly purchase cigarettes. In New Brunswick, the average cost of a 20-pack of cigarettes is $14.32, according to Statistics Canada. For people who smoke a 20-pack a day, that can easily add up to $5,040.64 per year. For those who go through a pack every other day, the cost can still quickly add up to $2,520.32 per year.
2. Alcohol – Going out for an after-work drink with friends every other day or visiting the liquor store on a regular basis can add up quicker than you’d think. According to Statistics Canada, from 2021-2022, the average alcohol sales in Canada were $813 per person over the legal drinking age.
3. Retail therapy – A common tactic to deal with a stressful day is to partake in retail therapy with the hopes that a purchase for yourself will make you feel better. Like smoking and alcohol listed above, the affects you feel after partaking are only temporary and leave you spending money that might be earmarked for other expenses or racking up credit card debt to do so.
4. Fast Food – Whether it’s stopping for a coffee, to grab breakfast, treating ourselves to lunch, or bringing home supper after a long day, fast food availability is everywhere we look. But when looking at how much is spent on fast food during the month, its easy to see how quickly it can add up. Getting a coffee every morning on your way to work, assuming you work 5 days a week, 23 working days during the month, and grab a medium coffee at Tim Hortons can easily cost you $47.35/month (taxes included), and up to $568.15/year. When you start adding in all the other spur of the moment purchases while ordering, you can see how quickly the total increases.
It's easy to see the impact that these vices can have on personal finances. There are the direct costs, which are noted above, and possible repercussions, such as increased debt, decreased savings, etc. By making simple changes, it’s possible to change our habits, and in return, cut back our spending. Below are some of the changes that can be made.
1. Identify your vices – We all have vices that we may not even realize are taking a toll. By tracking your spending within a few weeks period, you’ll be able to see what vices you really have, and the toll their taking on your finances. This might be something as simple as grabbing a coffee every morning, treating yourself to lunch a few times a week, or stopping for the pack of smokes after a mentally stressful day.
2. Don’t try cutting out more than one vice out of your life at a time – People give into their vices in moments of stress. If you try to cut out more than one at a time, the chances of success are slim. By cutting out one at a time, you can work towards creating one good habit at a time as replacement.
3. Make it difficult to spend – Because people have such easy access to funds through their debit card, credit card, or with a tap of a phone, it makes it all too easy to give into temptation. If you remove the easy access, such as leaving credit cards home or deleting card information from your phone, it will prevent easy access, hopefully causing you to think about whether the purchase is worth it.
4. Save the money from eliminating vices – Most people are accustomed to spending a certain dollar amount on their vices. By taking the money saved by giving up a vice and transferring it to savings, it allows you to have a visual of what’s being saved and gives you an opportunity to get ahead. Start with building an emergency savings account, and then work towards paying down debt.
5. Revisit your goals – By revisiting your goals on a regular basis, it keeps your goals in the forefront of your mind, hopefully giving you enough incentive to stay on track.
If your vices have left you feeling the financial pressure of your debts, it’s essential to seek out your options.
If you are looking for advice, or a second opinion about your debt, it does not cost anything to talk about your options. Every financial situation is unique and viable options can differ from person to person. A conversation free of judgment and cost, is the first step to determine options for debt that make sense for you. For a free consultation, please call or text (506) 645-1814 or email jaime@tackledebt.ca; or visit www.tackledebt.ca.