With all of the articles you see about the fact that millennials are spending more on coffee than they’re saving for retirement…
I’ve been waiting for the follow up article:
Millennials are likely spending more on alcohol than they’re saving for retirement, too.
And I’ve been waiting for that article precisely because, even as a person who enjoys the occasional (or, if we’re being honest, not-so-occasional) latte, my monthly craft-beer-and-wine budget often tops my coffee budget.
And based on what I hear anecdotally from friends? I’m not alone on this.
So if beverages are ruining millennial’s retirement, and if we’ve already talked lattes to death…
Let’s switch gears for a second and ask a different question.
Less “Will a $5 latte sink my retirement?”, and more:
“Am I spending too much on beer, wine and alcoholic drinks? And uh… how do I know if I’ve hit that point?”
The answer will likely be highly personal. Because alcohol itself is highly personal.
From your favourite type of wine, to the reasons you don’t indulge.
But here’s a look at why we’re spending so much on alcohol, and how to get a handle on your booze budget.
How did alcohol become such a big budget line item?
In 2014, the total sales of alcoholic beverages by Canadian liquor stores and agencies was $20.5 billion dollars – and that’s not counting money spent at restaurants or events. (And it’s up to $22.1 billion in sales in 2015-2016.)
Here’s a few reasons why that number got quite so high:
The cost of taste
To no one’s surprise, social media plays a big part in millennial’s alcohol consumption patterns.
A study released in 2016 found that 28% of millennials said they would order a premium brand of liquor to impress their friends – even if those friends happen to be their Instagram followers.
A separate study found that over half of US millennials agreed that “craft” alcohol was higher quality than general big-brand bottles. And that craft premium can add up.
Craft beer can run you more than $20 for a single growler (1.89L), and don’t even get me started on the prices of liquor that comes with a “craft” marketing message.
If all this seems like the height of extravagance, however, consider the price of a good bottle of wine and some fancy cheese.
Spending on premium alcohol is nothing new. And likely won’t go away anytime soon...
Beer and liquor just figured out how to get into the game, so no matter what your drink of choice, you can spend extra to get “the good stuff.”
Related: Do You Splurge?
Although it’s easy to look at a receipt from a trip to the Beer Store and identify that yup, that was money you spent on alcohol…
There are sneakier ways we spend money on booze, too.
For example, look back at your restaurant meals for the past month or two. Ask yourself how many of those meals included a glass of wine or a beer to go along with your meal.
If you do drink, it’s probably at least one, and that heavily-marked-up beverage got rolled right into your restaurant spending category.
Sure, restaurants aren’t a cheap night out most of the time. But tack on an alcoholic beverage or two and all of a sudden you might be drinking the cost of another full meal out.
And there’s nothing wrong with that, by the way!
But if you’re looking for a clear picture of how much you’re spending on alcohol, it’s something to consider carefully.
Whenever I talk to people about their going-out budgets, and how they can scale back, one specific type of event comes up more than any other:
Specifically, their objection is that spending money on attending networking events – and the cash bars that inevitably go along with any event after 5PM – is critical for their career.
Having been there myself, I agree entirely. And I’d never suggest that anyone scale back on such a critical activity for career progression.
But the multiple-networking-events-every-week period of my career also happened to be the period where I was earning a decidedly entry-level salary. So I noticed the hit my budget was taking from these events.
Even one drink, plus tax and tip, can tack an extra $10 onto an event that may have already cost you a ticket price to attend.
The responsibility factor
Then, of course, there’s the fact that if you plan to drink, you need to plan for transportation, too.
If you would have driven - or biked! - home after an event, but you had a few drinks and hopped in a cab instead, I’d say that counts as a drinking-related expense.
So how can you get a real handle on your alcohol spending?
If you’re reading through this and realizing that oh right, you do all of those things, don’t worry.
There are a lot of ways you can figure out exactly how much money you’re spending on alcohol…
And find ways to enjoy your favourite drinks without breaking a reasonable booze budget.
Track your alcohol-related spending
It really is the first step to figuring out how much you spend on anything – and alcohol is no exception to the rule.
As you’ve read through this, you might have identified sneaky ways alcohol slips into your budget alongside other categories of expenses, even beyond the ones listed here. To get an accurate total:
- write a list of all of those spending categories, and
- commit to keeping a tally of them for a month.
So if you go to dinner, and you add on a glass of your favourite craft beer, make sure to keep the receipt and pop that extra $8 + tax and tip into whatever you’re using to track your spending.
Give it up (for a while)
Whoa whoa whoa – give it up?!
This entire article has been about all the ways in which alcohol can be a big part of people’s lives and the events they like to attend.
But it’s also not a necessity.
Unlike your food budget and your rent, alcohol is a purely discretionary expense. Which means, if you want to reevaluate how much you’re spending on it…
You have the option to cut it out of your life completely for a period of time.
I did exactly that this year, and participated in “Dry January.”
It’s exactly what it sounds like, and you give up alcohol for the entire month.
It turns out, it was a great way to keep my budget – and my post-Christmas waistline – in check. And I found a lot of great alternate options to replace alcohol during the month. (Sparkling water was a personal favourite.)
If you’re thinking that there’s no way you could give up alcohol for a month, let me offer some context for you:
I went to Vegas and celebrated a birthday in January. No alcohol required.
You can do it!
Set a budget, and stick to it ruthlessly
If you’d rather take a more moderate approach, it’s time to set a hard limit for your alcohol spending over the course of a month.
- You can set an arbitrary number – $50? $100? – and spend until you hit that limit.
- Or you can base your booze budget on how much you spent last month (which you’ll know because you tracked your spending, right?)
Either way, this approach will keep your alcohol spending within a limit that you think is reasonable. (And still let you enjoy all the fun of your favourite drinks.)
Just make sure that when you do hit that limit, you cut yourself off. The rest of the month is now a Dry-Whatever-Month-You’re-In!
Sparkling water, anyone?
Now if you’ll excuse me, I’m going to get back to my sparkling water…
Because thanks to the gorgeous weather (patios!), I hit my self-imposed booze budget at least a week ago.