How Much are Your Vices Really Costing You?

Do you drink beer? Do you smoke cigarettes? Do you love your morning latte on the way to work? Of course you do. But these little habits may be costing you more than you think and doing serious damage to your financial future.

I'm not knocking your vices - we all have them - but many of us also make the mistake of not realizing just how much those vices actually cost us. Those packs of cigarettes and cups off coffee can really add up.

Adding up what your vices are costing you over the course of a year (or more) may help you put your habits into perspective.

Lattes… Everyone's favorite expense to victimize

Ever since David Bach wrote about the Latte Factor in his bestselling book, The Automatic Millionaire, gourmet coffee has been vilified by everyone from financial planners to frugality zealots. The theory is that, instead of spending money on a daily latte, you could save a small fortune by brewing your coffee at home.

Granted, you'll miss out on the ambiance, professional baristas, and other factors that go into your morning latte. But, with the high quality coffee makers that are on the market and the availability of an incredible array of coffees, home brewing has never been closer to the coffee shop experience. While purchasing a cappuccino at your favorite coffee shop will set you back about $4 on average, brewing it yourself at home can cost you significantly less than $1 per cup.

If you were to brew your own instead of buying a cup of coffee on your way to work, your savings could be about $700 per year, and that doesn't even factor in the savings associated with not picking up that blueberry muffin on the side.

Energy drinks are the new lattes

Coffee is no longer the beverage of choice for today's younger workers. Nowadays, young consumers are latching onto energy drinks, which seem to have enjoyed incredible growth in popularity since their introduction over a decade ago.

Despite having slowed to a modest 4% annual growth rate according to Beverage Spectrum Magazine, the energy drink industry has continued to grow into an industry with $4.8 billion in annual sales. Products in this niche now include energy shots and relaxation drinks, as well.

I never realized how much energy drinks cost until I saw the price of a case on the shelf at my local warehouse club. Energy drinks are far from cheap to purchase, with a typical price tag of $2 or more for a can. If you drink several cans throughout the day while at work, you'll put a serious dent in your wallet - on the order of $1000-$1500/year.

Two packs a day really add up

When you do the math, the costs of smoking can really add up. A pack of cigarettes can cost $4-$5 (or more!) depending on where you live. So someone who has a two pack a day habit could easily be spending $240 per month, or $2,880 per year. Even cutting back to one pack per day can significantly increase your cash flow. If you were to quit smoking completely and invest that $2,880 per year and it grew at 8% annually for 20 years, you could amass over $104,000.

Putting your vices all together

These vices can have a real impact on your finances when viewed separately. So just think how much damage you could be doing if you add two or more of them together. For example, if you smoke two packs per day and stop for a drink at your local pub a couple nights per week, you could easily burn through several thousand extra dollars every year. The costs tend to sneak up on you before you realize it.

Do I really think that you're going to give up on your morning coffee run? No, of course not. But I'm hopeful that you'll at least be honest with yourself about how you spend your money. I know that I'm personally not saving enough for retirement, and I often justify it in my mind by saying that I simply don't have enough money.

When it comes right down to it, the truth is that I'm choosing to spend my money on other things instead of saving it. Your vices can really add up and become a budget buster if you're not careful with your spending.

What are your vices? And have you done anything to reign in your spending on these things? Or have you decided that they're worth the cost?

The original article can be found at FiveCentNickel.com:How Much are Your Vices Really Costing You?