The Carr Report: You’re paying high prices for your vices!

by Damon Carr
For New Pittsburgh Courier

The word “vice” is generally used to define behavior or habits that are immoral, sinful, criminal, rude, depraved, taboo, or degrading. I’m not going to be that sinister. I’m using the word vice to imply something we do or something we spend money on that we know is foolish, doesn’t make any sense, and is detrimental to our health, wealth, and overall well-being. We admonish our children from doing it. We warn others about the dangers of doing it. We frown upon others whom we see with potential from engaging in it. Yet, we do it anyway.

We tend to be judgmental when we see others wavering with their vices. We leave our own vices unchecked. We all have vices of some kind. Like sin, no one vice is worse than the other. Some vices are obvious, and its ill effects can devastate your life seemingly overnight. Other vices are quiet killers. These vices slowly erode your health, wealth, and life.

We justify our indiscretions with: “you only live once,” “fear of missing out,” “you have to die from something,” “I work hard, I deserve it,” “it relaxes me,” “it’s my money and I can do what I want to,” “this is the only thing I do for myself…”

When you have to rationalize doing something that you know deep down inside is wrong, it’s called “deceptive intelligence” or “rationalizing wrongdoing.”

What does it take to blow $10,000 per year? A measly $27.40 per day on miscellaneous spending. Yep! Cigarettes, weed, alcohol, drugs, lottery, casino, dining out, coffee, emotional shopping, adds up FAST.

I recall doing a financial plan for a family. Money was tight. They had no wiggle room. I was going over their income and expenses. They had a negative cash-flow of approximately $600 per month. Meaning they were spending $600 more than what they were earning. How is that possible, you may ask? They supplemented their income by using credit cards and by borrowing from Peter to pay Paul. I noticed he was spending $15 dollars per day on cigarettes. I looked at him. I said, “Your money is going up in smoke!” He looked at me puzzled. Not only are there health concerns associated with smoking cigarettes but also you’re spending $15 per day. That’s equivalent to $105 per week, $420 per month, and $5,040 per year.

I had his and his wife’s attention. Think about it. If you stop smoking, you reduce your negative cash-flow by $200 per month. Let’s take it a step further. I asked how long have you been smoking? He said since he was about 20 years old. He was now 44 years old. I ran some time value of money numbers. I told him that if he had invested that $420 for 24 years, that money would be worth approximately $503,000. They were astonished!!

I told them hard habits are hard to break. I don’t expect you to stop smoking overnight. But it’s something to consider. In the meantime, curtail spending on your vices. I gave them some other recommendations that reconciled the negative cash-flow and created some margin between their income and expenses. During our follow-up appointment I was shocked to learn that he quit smoking cold turkey after hearing those numbers. I’ve given this advice and ran those numbers to a lot of people. To date, he’s the first client that I know of that quit smoking cold turkey.

Smoking may not be your vice. It’s not mine. We can’t look down upon him because he wasted his money on smoking. What are you wasting your money on? What’s your vice? You have one. Most of us have more than one. That’s double or triple the trouble. It’s not uncommon for a person to be a smoker, drinker and play the lottery. Mine is dining out. I have the bulge in my gut to prove it. We’ll go grocery shopping and stock up for the week. On the way home from the grocery store, I’ll stop at a restaurant and buy me something to eat.

Another vice of mine is the casino. I don’t go often. But when I go, I leave a small fortune. I lose all common sense when I’m at the casino. I try to check myself. I’ll valet park and leave my wallet in the car to prevent myself from going to the ATM. One time I was at the casino, I lost $200 in 20 minutes. I was looking forward to going and having a good time. Winning is how I define a good time. Within 20 minutes, I’m broke, busted, and disgusted. I don’t like watching other people gamble. So, I did the sensible thing. I had a valet attendant bring me my car so that I can get my wallet. Down goes another $200. I know better. I had to fall back from that place.

Don’t judge my client or me. He quit smoking. I curtailed my spending on my vices.

Below is a list of the average cost we spend on various vices. The list isn’t all inclusive. It’s an average of some of our vices. Reflect on how much you spend compared to the average. Work towards curtailing your spending on these vices.

• Cigarettes: The average person spends about $6.28 per pack on cigarettes. If you smoke a pack a day that’s $176 per month.

• Marijuana: The average cost of marijuana is $10 per gram. The average person spends $25 on each purchase. If you spend $25 on weed three times per week, that’s $300 per month.

• Alcohol: The average person is spending about $100 per month on alcohol.

• Lottery: The average person spends about $86 per month on the lottery and scratch-off tickets.

• Dining Out: The average person spends about $232 per month on dining out.

• Coffee: The average person spends about $50 per month on coffee.

• Casino: The average person takes $200 to gamble with at the casino.

• Emotional shopping: Feeling sad, lonely, bored, or happy? People shop for various emotional reasons. The average person spends about $133 per month.

Benjamin Franklin said that small leaks sink big ships. These expenses seem small. But they add up quickly. We pay high prices for our vices. It’s not just what we spend on our vices. There’s also opportunity cost— money that could have been used to save, invest or do fun, memorable stuff with our family and friends.

(Damon Carr, Money Coach can be reached at 412-216-1013 or visit his website @ www.damonmoneycoach.com)

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