At the beginning of my FI journey, I basically reviewed each element of my life. I sorted these elements into two distinct buckets–things that added value to my life and things that didn’t. The things that added value to my life were things such as family, friends, health, exercise, and financial security. The things that didn’t add value to my life were things such as excess spending, trying to keep up with the Joneses, wasting time, and recreational drinking.
Drinking alcohol for me was never really a problem, there was certainly no dependence and it wasn’t really impacting our family or home life in a negative way, however, I had to ask, was it adding value to my life?
Drinking was a tool I used to de-stress after a busy day, however, was that necessarily the best tool to use for this purpose? Drinking was a tool I used to assist in a social setting, to loosen up, however over time was this becoming a crutch rather than a useful tool? Drinking was a tool I used to pass the time, however, was this activity the best use of my time? These were the questions I asked myself and after a quick assessment, the answer each time was a big fat NO!
I will be honest here and say I was a medium-scale drinker (depending on the scale), I would consume on average around 12 – 15 alcoholic drinks per week. This obviously varied wildly depending on whether we attended social gatherings or not. However the process of drinking became a habit–it’s Friday afternoon, so I deserve a drink; it’s a sunny Saturday afternoon, I better grab a beer; I am so stressed, I know what I need…you get the picture.
Drinking in Australia is almost a national sport. It is highly ingrained in our culture and stems from its core. It is a social norm that seems to flow from one generation to the next. This was another reason I wanted to stop drinking, to break this generational cycle in my home at least. I especially didn’t want my son to grow up in an environment where drinking was on display as a regular pastime or a normal facet of life.
In essence, I came to the conclusion that this habit was not adding value to my life, in fact, it was actually a major cost to my life. I must say it was shocking to work out how what the actual costs were.
Firstly, there was the cost of the alcohol itself, which in Australia is quite expensive due to excessive government taxes. The cost per beer ranges from around $2 if purchased in a 24-pack carton form to upwards of $10 for a beer in a fancy bar or restaurant. Plus, there is the cost of buying rounds of drinks for your mates, which somehow never seem to come back around! For this experiment, I averaged the cost of each drink to $3.
There are also related costs to consider such as reckless food spending, gambling, and taxi’s/uber’s home. These may seem frivolous at the time, but they amount to a considerable cost when added up.
So here is a summary of what drinking was costing me, based on 15 drinks per week:
| Category | Cost per item (average) | Number per month | Cost per month | Cost per year |
|---|---|---|---|---|
| Drinks | $3 | 65 | $195 | $2,340 |
| Food | $10 | 4 | $40 | $480 |
| Gambling | $20 | 2 | $40 | $480 |
| Taxi/Ubers | $20 | 2 | $40 | $480 |
| Total | $3,780 |
In fact, time was another large factor in this decision for me, as time is the ultimate currency and it is precious and finite. We are all on this earth for such a short time frame, I had to ask myself was this the best use of my time? Think of all the other things I could be doing, such as starting a side hustle, working on a blog, focusing on my FI plan, and obviously spending more time with my family. All far more meaningful and fulfilling and all of which I implemented within weeks of giving up drinking.Wow, $3,780 per year…this is a massive number! If this is not enough incentive to quit, there are also other non-monetary costs that are not factored into this such as your health, time drinking, and your time with a hangover
I hear you ask, this is all well and good but where is my offer of becoming a millionaire? Well, this all comes down to calculating the opportunity cost over time. If you work on the $3,780 annual saving by not drinking and include an 8% rate of return on your savings/investment, you get a whopping $462,000 saved after 30 years. If you extended this calculation out to 45 years, the sum would be over $1.57 million!
So, there is your incentive to look at each element of your life and ask yourself the questions: Is it worth it? Does it add value to your life? What is it actually costing you? Once you do this, the path ahead will become clear. It was an easy decision for me and one that I know was correct.
Finally, I just wanted to end by stating that everyone’s value tree is different, if you value drinking then that is fine. You need to live your life however you choose, and keep doing whatever adds value to your life and brings you joy. Only you are in control of your life and only you can choose your life’s path. All I recommend is that you step back and take some time to assess each element of your life and keep only those elements which give you the most value.
On reflection, this is the best choice I could have possibly made for my life. It was a decision that is already paying big dividends. Not only are my savings growing more rapidly, this decision has also given me the time and motivation to create a side hustle and to also create a blog to hopefully inspire others. I have also freed up some precious family time in my life and I have also never felt so healthy and clear-minded.
Hopefully, this shows that making a few seemingly small but positive life changes can have a huge impact on your life and your FI journey. So, what positive changes can you make in your life on your path to FI?
This is a guest post from Mr. 3000 who writes over at Financial Independence in 3,000 days.
