The Cost of Vice

Last week I visited my hometown of Winnipeg. Following a long walk along lovely Wellington Crescent to the city’s sprawling Assiniboine Park I stopped at a Starbucks. My small Pellegrino, a grande coffee and oatbar totaled north of CDN$10.00. No big surprise.

While soaking up the sun on the patio I spotted a gent who purchased a venti-something. He carried a bag containing two or more bottles from the provincial liquor retailer (we have a different system of selling in Canada). He wandered off the patio to smoke a cigarette at a respectable distance (it was Canada after all). I absently wondered what his annual spend was on these three habits or vices.

I don’t smoke, never have. Starbucks is a once-in-awhile thing, I have never been hip to the vibe. When it comes to drinking that is a different story, in a bar graph my bar and booze spending would spike. This is no morality tale. I am not preaching the cut of one habit or vice over the other. I am in no position to do so.

It all comes down to choice. The overall “pie” of our discretionary spending will probably never change. Financial behavioral studies show if we quit one thing, we are prone not to save the money instead we will redirect it to another interest.

Kelly Geldis writing on Money.com provides interesting insights into household and individual spending. The article suggests that focusing on big-ticket items is smart. Do you really need the gym membership you never use? Can you get away with one car? These would certainly go a long way in saving dough.

Yet, it is the myriad of relatively small but highly frequent purchases that dent wallets and purses. The corollary to this is because we purchase these things regularly it makes them that much harder to give up or change. There is a compromise as Geldis points out, “If you’re now going to Starbucks five days a week, cutting back to two will still save you money without denying you the experience entirely.”

That sounds good but we are a society who rationally understands the notion of “everything in moderation” but then irrationally avoids the theory with great energy.

Geldis ran the numbers on smoking in the United States. When you come up with average cost and average consumption over a year it adds up to US$1,596.00. In Canada, due to heavier taxes, that number climbs to CDN$2,628.00. Which, if you follow currency exchange rates, still makes it costlier to smoke in the Great White North.

In terms of booze, I was surprised to discover that the average American drinker spends between US$672.00 and US$1,344.00. Perhaps I mix with a different type of American because that seems awfully low. The company I keep in Canada is not dissimilar yet the household average spend is CDN$896.00. The number comes from Statistics Canada who admits that people underreport their drinking. That is an understatement when you discover costs related to alcohol abuse in Canada include $7.1 billion in lost productivity, $3.3 billion in health care costs, and $3.1 billion in law enforcement. But I am off topic.

How about your morning joe? According to USA Today’s coffee-cost calculator, it costs $63 a month to buy a daily cup of coffee from Starbucks. That adds up to $766.00 annually whether in Canadian or US currency. If you are American that means if you quit Starbucks for a year you will have enough cash to buy 12 shares in the company.

Beyond smokes, booze and caffeine, we have other habits or vices that will not all be named here. Lunches out, lottery tickets, and binge TV watching across three different content memberships are frequently cited. Illegal drugs, sexual proclivities and compulsive gambling can add heavily to the cost column.

Logically cutting out the three vices quantified here would save that fellow in Winnipeg close to CDN$5,000 per year. If he eschewed cigarettes, alcohol and coffee he would definitely be better off financially and that much healthier.

What we have not covered is how these habits or vices correlate to stress and anxiety prompting a vicious cycle. We justify vices because we are down or feel stressed and, this in turn, propels and accelerates consumption, dependency and silly justifications. Studies prove that people who eat fast food and commercial baked goods are more likely to develop depression and then they keep going back for more (in researching this piece I found that Mediterranean diet is the best for avoiding feeling the blues).

Years ago I wrote an endorsement of the book, Strategy and the Fat Smoker, by a colleague and collaborator David Maister. David was a Harvard professor, consultant, and an expert in business strategy for professional service firms. His thesis was simple, in business and in life, we know what is good for us but we rarely make the right choices and follow up with the effort required.

That is because few, myself included, believe that our lives should be spent grinding away without pleasure. So perhaps this is bit of a morality tale after all. It may not be about cutting out but cutting back. Or is it swapping one thing for another? These are big questions to ponder for the sake of our physical and mental health and our bank balances.

Aesop, the Greek fabulist and storyteller, provided insight and warning when he said over two centuries ago, “Vices are their own punishment.” It is infinitely clear that in these modern times we are doing a great job of punishing ourselves.

Another chap from history may have solved the conundrum of vice versus virtue. Antoine Rivoral was in a position to see vice and excess in great supply. He was a Royalist writer during the French Revolutionary era and said, “Vices are often habits rather than passions.” Following Rivoral’s thought to sound conclusion suggests our passions are the best things for us if we can accurately discover and pursue them.

1 reply
  1. Carol Dewer
    Carol Dewer says:

    Fantastic insights! This should be reprinted in The Atlantic and other like publications. You have opened up my mind now let me see if I will change my habits and vices!

    Reply

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