We’re spending a lot of money on vices. Let’s start adulting
One dirty little secret millennials are coming clean about? Vices.
It turns out, when it comes to financial vices like takeout and boozing at the bar, we in the younger generations are struggling with giving in to guilty pleasures, a new Bankrate/The Cashlorette survey reveals.
In particular, younger millennials (ages 18 to 26) are falling victim to vices that may feel good in the moment, but are far from worth it in the long run:
- 54 percent of people in our age group eat out at least three times per week.
- 30 percent of millennials say we buy coffee at least three times a week.
- 51 percent typically go to a bar at least once a week. (Among people ages 21-26)
Bottom line: We’re spending a lot of cash on vices.
Look, I GET IT. I’m not judging. I’m 24 years old myself, and passing up a happy hour invite can be painfully hard. And yes, I probably love Shake Shack and Starbucks just a little too much. I’m human, OK?
But while I may like my mimosas, I like money even more.
Here’s the thing: Your vice is hardly ever worth the price. The buzz from that Bellini will wear off and then you’re left with a busted budget and a slim stash of savings. Financial vices can easily add up to thousands of dollars a year, having a major impact on your future financial fate. Such a buzzkill, right?
Never fear, cutting back while still having fun is solidly within your reach. I promise, your future self will thank you.
Easy ways to cut back: Food edition
One of the most popular vices among young people is food. Duh. Haven’t you heard? We’re the generation that brunches.
Our survey found that the average millennial eats out five times per week. Now, I love my prechopped salads and brunch bites as much the next person, but eating out that much is seriously unhealthy for not only your waistline but your wallet, too.
The easiest way to cut down on this vice is to simply prepare ahead. We often run out for a quick bite because we claim we don’t have time to cook, so eliminate that excuse by doing a little meal prep on Sundays. Buy in bulk by hitting the (warehouse) club on the weekend, and be sure cook a variety of easy recipes that incorporate similar ingredients to cut back on waste and time. When everything’s already cooked and all you have to do is grab and go, eating out becomes much less tempting.
Easy ways to cut back: Drinks edition
Another vice to avoid spending money on? Alcohol. Sipping away your savings is probably the worst use of your hard-earned cash. If the thought of your nightly glass of wine is what’s powering you through the long work day, at least be frugal about it! Drinks at the bar are pricey, so get your booze at discount liquor stores.
“I usually buy a bottle of my favorite cheap wine for the week, and go out two to three times a week, including weekends,” says Brooke Marquart, a 25-year-old New Yorker. “I’d say I probably spend $20 to $50 a week, depending on if we go out or just hang out at someone’s apartment. I think it’s worth it in the long run just to be hanging out with friends, but it can definitely get pricey.”
For many millennials, drinking and socializing go hand-in-hand. Brainstorm ideas with your squad on how you can spend time together sober, with the goal of saving some money. Check out free museum days, have a picnic in the park, soak in the sun at the beach or have a movie marathon. Your memories of your time together will not only be sharper, but cheaper.
Easy ways to cut back: Caffeine edition
For some people, their weakness isn’t the buzz they get from booze, but the kick they get from caffeine. A store-bought cup of coffee or tea every morning might seem minimal, but it adds up fast. Brew your coffee at home (hot tip, Trader Joe’s has super affordable coffee compatible with Keurigs), and skip the fancy, vanilla-soy-no whip-latte (and the eye rolls you get when ordering it at your go-to spot).
You can do this: Moderate spending, maximize experiences
That all being said, there’s no need to totally cut out expenses like dining out and bar tabs (see, I’m not a monster!). What is important, though, is spending in moderation and practicing self-control.
To control how much you spend on your favorite vices, figure out a budget for those expenses; one that that you can realistically maintain. Your budget should require some self-control and cutting back, but it shouldn’t totally deprive you.
Envelope budgeting works great for vices; you allocate a monthly, predetermined amount of cash for each expense, and put that cash in an envelope. So, if I’m headed to the bar, I’ll only take out cash from my Alcohol Envelope. This causes me to think twice about what I’m spending my money on; I can visually see how much money I have left for that expense for the rest of the month, and once I run out, game over.
This is a great method to follow if you struggle with self-control (like most of us, let’s be real). And, since it’s 2017, there are apps that act as virtual envelopes. No need to deal with, you know, actual paper.
Make your money work for you
Instead of spending your money on booze and burgers, your money is best stashed in places it can grow. Build an emergency fund in a high yielding savings account and invest in your future self by increasing your retirement contributions or start investing.
Sure, a night out at the bar is fun (until the hangover hits), but is it really worth sacrificing the significant moolah it could be acquiring in an interest-earning account? No.
Your vice usually isn’t worth the price, but no need to cut it completely out of your life. Just be sure to stick to a strict budget when it comes to these expenses, spend in moderation, and maybe leave the YOLOing to Drake.
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