I am about to get pretty honest about myself. This post is about something that feels very personal, and it is difficult to admit to what I consider one of my biggest vices: alcohol consumption. I am actually more comfortable publicly sharing my finances than talking about this, but I felt like it is an important topic. In our culture, it is easy for many people to think that their alcohol consumption is “moderate” (like me). I hope that you at least re-examine your habits, if not in the name of health, then for its affect on your ability to reach financial independence.
I have a confession: I drink too much.
Since I graduated from college, I have fallen into the habit of enjoying a beer or a glass of wine every night of the week. Honestly, it is more like two per night during the week, and sometimes more on the weekends.
That puts me in the 14+ drinks per week range. It is easy for me to rationalize that as being normal. Plenty of people drink more than me, so why should I be worried?
Well, according to this, my “normal” alcohol consumption puts me near the top 80% of American drinkers.
And, according to recent guidelines, I should drink no more than 6 drinks per week.
I have to agree with that, given my experience with the occasional groggy morning. A peek at my recent monthly alcohol budget also has me cringing. Just take a look at the last six months:
That’s an average of $69 per month.
From what I know of other FIRE-seekers and the already FIRE’d, I’m not alone in my love for a good beer.
But it would seem like the effect of alcohol on our bodies and our wallets would be enough for us to shun it entirely, so what’s holding us back?
I imagine it is some form of “life is short so enjoy it while it lasts.” At least that’s how I think of it. But my focus is on the future for basically every other aspect of my life: finances, career, health, and family. The “live for today” line of thinking just doesn’t fit in with the rest of my values.
All this has gotten me wondering: Does alcohol even fit in with FIRE at all?
In three major ways, it entirely clashes with the values of the FIRE community. Alcohol is:
- Harmful to finances. If regular purchases of such luxury items hinder your savings rate, you will extend your timeline to FI.
- Harmful to health. The undeniable consequences to health may limit your time in early retirement, and your ability to enjoy it.
- Harmful to productivity. Whether you get a hangover or not, alcohol has the potential to interfere with sleep, thus affecting your ability to get stuff done.
Let’s break it down now, y’all.
We have already established that over the past six months, we have spent an average of $69 on alcohol. I say “we,” but in reality, my wife infrequently indulges in the liquid mistress, so let’s just assume that this is one person’s consumption.
I get by with “only” $69 per month because this is mostly cheap box wine, with the occasional craft beer. If I were to drink only beer, this would be more like $90 per month. And BELIEVE ME. I would prefer the beer. I just want to minimize costs.
Using our friend opportunity cost, let’s compare the cost of 14 beers per week with a more reasonable 6 beers per week. I will assume a six pack of a good craft beer goes for $9.
That means that a rate of 14 beers per week costs you $1,092 per year. Cutting back to 6 beers per week would already save you $624 per year.
But if you were to invest that $624 savings over 20 years you would have over $27,000!
That’s a decent hunk of change.
I know. It’s a simplistic exercise, but you get the point, right?
Drink less, keep more of your money.
The health risks
I think everyone is at least somewhat familiar with the health effects of drinking alcohol, including damage to some pretty major parts of your body, such as your liver, heart, and brain.
However, I don’t think most people realize it can be harmful even in previously considered small amounts.
The 6 drink per week guideline I mentioned earlier is the maximum weekly intake recommended, meaning that anything more than that increases your risk of alcohol related health issues.
The path to FIRE is not just financial. We aren’t just minimizing our time in the office, we are maximizing our time outside of the office.
Personally, I want to be in the best shape I can be. Even though I have not yet felt any long term negative effects of my alcohol consumption, the data says that I am at risk to eventually experience them. I can’t ignore science.
- Liver. This one shouldn’t be a surprise to anyone. Too much alcohol can result in excess fat on your liver, which is hinders its ability to function properly.
- Heart. Some research shows that small amounts of alcohol can be good for your heart, but the actual amounts are uncertain. But – once you get into the 7 drink per week range, any positive effects are negated.
- Brain. Alcohol consumption over long periods can result in brain cell shrinkage.
- Cancer. Hormone imbalances caused by alcohol have been linked to a higher risk of certain cancers.
Of those, I am most fearful of cancer. It is easy to think that I will never get liver disease (only alcoholics drink enough for that! Right?), but cancer is such an unknown beast that I don’t want to take my chances.
And, of course, drinking and driving drastically increases your chances of crashing and potentially causing harm to yourself, or others. So don’t.
But there’s even more to the harm alcohol can do to your livelihood. What if you become ill and then are stuck with the medical bill?
The cost of the health risks
In the United States, excessive alcohol consumption cost $24.6 billion in health care expenses in 2006 (source).
If we assume that these costs are incurred by the top 10% of the drinking population, that’s $820 per person. And that’s probably a conservative estimate.
Including the cost of the actual alcohol, it is easy for your annual costs to push $3,000. For your whole life. That’s a pretty large opportunity cost.
The loss of productivity
The same source above from the CDC estimates that of the total $223.5 billion spent on excessive alcohol consumption in 2006, $160.9 billion (72%) was due to losses in workplace productivity.
And, while alcohol can help you fall asleep faster, the quality of sleep is worsened. I personally can attest to this. After 3 or more drinks the night before, my sleep becomes restless in the early morning and I will wake up around 4:00 or 5:00 AM. The impact on my sleep alone is enough to convince me to cut back.
So how does alcohol fit in with FIRE?
The verdict: It’s up to you.
My opinion? I think that everyone should consider cutting back, even if you are already under the recommended guidelines. Any amount of reduction will be better for your health, your wallet, and your mind.
Obviously you would be able to save more money if you cut it out all together. Is that reasonable? Maybe for some, but not for me. Self control and focus are very important attributes to achieving FI, but I think that enjoying small amounts of luxury are an important part of an enriched life. As with everything, alcohol is best enjoyed in moderation.
I do not want to come across as the anti-alcohol-FIRE-blogger. As I said before, I am not giving up alcohol. I am merely reconsidering my consumption. I am still aware of the value in enjoying myself.
I have, however, decided to cut back on my consumption of alcohol to no more than 6 drinks per week and $30 per month, whichever comes first.
I may even try going weeks or months without alcohol. I find challenges like that enjoyable, especially when it means saving money!
What is your opinion of alcohol and FIRE? Have your changed your habits to better reflect your values? Let me know in the comments!
Two posts from none other than Mr. Money Mustache himself:
And from the MMM forums, some Mustachians weigh in on their monthly alcohol spending and even cutting it out entirely: