If I had a nickel for every time a so-called “personal finance expert” (i.e. some windbag financial planner type with a desire to grow assets under management) told the masses to stop drinking coffee and invest that money instead, I’d have enough to buy the entire Canadian economy. Or something like that.
Many people have debunked the latte factor over the years, including the handsomest finance blogger out there, yours truly. They correctly point out that having takeout coffee a few times a week isn’t really that big of an expense compared to stuff like getting a place in a major Canadian city or paying off student loans on an education that continues to increase in cost faster than inflation. And sure, while the little things have a way of adding up, they’re still little things.
Anyway, good news coffee drinkers. Feel free to imbibe all you want. Because there’s another liquid that I think you might want to start avoiding instead.
The booze factor
The thing about coffee is you usually only have 1-2 a day and I’ve yet to meet anyone who has ingested a few cups and started acting like a jackass. But alcohol is a whole other story.
One beer with the buddies quickly turns into three or four. For some reason we tip bartenders much more than we do baristas, so $5 per beer is really $6. Add in some greasy bar food and you’re looking at a $35 tab.
Do that once a week and we’re talking serious money here. Do it twice a week and it’s a $3,500 annual bill. Ouch.
Getting drunk has other downfalls, too. Only a maroon drives home after a handful of drinks, even if they’re spread out over a few hours. Uber might be losing a boatload of money, but their rides still aren’t free. Drunk people are talked into other dumb decisions, too. I have an autographed piece of hockey memorabilia I purchased at a charity auction (I use the term charity here loosely) that seemed like a good idea after four drinks. A decade later and I’d still rather have the $300.
Sure, alcohol does have some benefits. It can allow a shy guy to turn into one of the group for a few hours or give us a little encouragement to do something we just don’t have the nerve to do so sober. But it’s a really fine line between being the boisterous life of the party and being a drunken jackass. And I’d argue if you need a shot of liquid courage to do something, that’s your brain telling you maybe it’s something you shouldn’t be doing in the first place.
Alcohol is such an ingrained part of our culture. You’re going to get some resistance if you tell your friends you’ve given it up completely. These folks believe you really can’t have a good time unless you get hammered, which is a pretty big buzz kill for the folks in the room that don’t get completely sloshed. So mission accomplished, I guess?
This all really doesn’t matter
Look, at the end of the day I don’t really care what you spend your money on. As long as you’re saving enough to meet your long-term goals then do whatever you want.
If you want to go to McDonald’s, Timmy’s, or even (gasp!) Starbucks every day for your cup of joe and you can maintain a 25% savings rate, then knock yourself out. You’ve earned that luxury.
Hell, I’d even argue that the average Financial Uproar reader has the opposite problem. They’re saving too much today, worried about a future that will be much more rosy than they ever imagined. It’s hard to go from a huge savings rate to something much more manageable. I’m having a hell of a time telling myself to spend more money now that I’ve made it to FI.
So if you’re looking for something to cut to increase your savings rate, let me recommend booze instead of coffee. But if you’ve already taken care of the big stuff and have a good savings rate today, feel free to indulge in both. Just don’t call me when you’re hammered, drunky.