The Impact of Vices on your Debt

We all have our vices, from the indulgent to the down right bad for us, having vices isn’t necessarily a problem but their impact could be. For me a vice is something that you do that is something that you don’t need to do that has some negative connotation with it. For example smoking and drinking are clearly vices in my opinion but this can translate to pretty much anything that you indulge in that you don’t need to. The Starbucks coffee that you have every morning becomes a vice when you spend $5 for a specialty coffee every day. Vices by themselves are not necessarily evil or bad, we all have them but the important factor is knowing their cost and impact to our lives, financially and otherwise.

The cost of vices

Most vices come with some form of cost from hidden costs or ones that are clearly known; if you think that your vices don’t have costs you’re likely quite mistaken. The obvious costs are to partake in the vice in the first place such as for smoking, drinking, and eating out all the time, there is a clear up front cost that is required.

Additionally there is often a hidden cost that is associated with our vices and these costs are much harder to measure because often these are intangible. With vices such as smoking the long term likelihood that you’re going to damage your health starts carrying a cost with it (especially in countries with privatized health care). You spend most of your life paying someone good money in order to be able to smoke and then it makes you sick forcing you to pay extra money in order to maybe get better.

But the hidden cost is not always easy to find, what about the opportunities lost as a result of a vice? How many people have lost an opportunity to show off their full potential because they were hung over or tired because they were out drinking the night before? The answer is likely quite a few. There are numerous scenarios that you can invent where a person could loose an opportunity because of one of their vices and these lost opportunities are very difficult to identify let alone quantify. Another hidden cost is in the lost interest on the money you spend on your vice. If instead of spending your money on your vices you paid down your debt or invested the money you could reduce the amount of interest you pay or make money from the interest. That interest be it extra paid on consumer credit or lost interest gained on investments is another intangible cost of participating in a vice.

The impact of vices on Debt

Now in my opinion one of the most significant impacts that a vice can have is to your debt. Lets face it, if you’ve got a vice this isn’t something that comes up once a year or even once a month but its a regular thing. If you’re a smoker then its a constant thing, and in reality an addiction, you’re paying to keep doing this vice all the time. Because you’re paying money all the time for this vice you’re not able to pay your debt down as fast (or possibly at all).

I think to really illustrate this I’ll use myself as an example, I am currently a smoker and I smoke about a pack every 2-3 days. Smokes are no longer as cheap as they used to be and I’m paying about $10 per pack (sometimes more) which means that over the course of a year I’ll smoke over $1500 worth of cigarettes. This $1,500 is money that I have literally burnt away in order to keep my vice going, its also money that could have paid down my debt. This is a very simple illustration because it doesn’t take into account any of the potential hidden costs that can come out of my smoking or even the additional interest I’m going to pay as a result of not being able to pay my debt down faster.

My personal struggle with my vices

Vices simply cost us loads of money that could help ease our financial situations considerably. Personally I have struggled with my vices in the past, I enjoy them and with the exception of smoking they’re not actively hurting me. I like to have a few drinks now and then, I smoke, I like to go to the casino once in a while; in other words I’m a normal person with some vices. I know that I can save a lot of money by cutting out anything to do with these vices or at the least reduce them, but that doesn’t make it any easier to stop. There is a very addictive quality to many vices, at least for me, and stopping them is very hard.

I have tackled a few demons such as gambling, when I was younger I would go semi-frequently to the casino with friends to play some cards and for the most part I would loose some money. While rarely was this a lot it added up and prevented me from clearing my debt. I have grown up a little and I understand that this is mostly a loosing venture and now I go maybe once or twice a year with a very defined budget. It’s a vice that has become an evening out for the sake of fun – essentially its become an entertainment cost.

But I still struggle with my other vices specifically the smoking and drinking. The smoking because it’s an addiction that I can see hurting me both financially and physically and until recently the drive to quit just hasn’t been strong enough. This is a vice that I simply want to tackle and be done with. I want my $1,500 per year to go to other things. The drinking is a vice I struggle with not because of the health or social impact, while I drink frequently I don’t drink a lot the problem is the cost of the alcohol is starting to bother me.

Vices by themselves are not necessarily bad but we need to keep in mind their cost, both tangible and intangible when participating in them. If you are heavily in debt and want to get out of debt then you need to consider tackling your vices in order to find the extra money to speed up the repayment process. Personally I am looking at my vices as too costly and they will be where I look to find more money to save and to repay my debts even though it maybe a challenge.

Year of Less

If I were to put a statement on this past year it would be that it was the ‘Year of Busy’, it felt like I was running around a lot doing a great many things and in the end I felt like I was stretched extremely thin. The goal for this year will be to make it the ‘Year of Less’! This past year I read Leo Babauta’s book Power of Less and it had a very lasting impact for a few reasons first off it made a lot of sense that by doing less you can be extremely productive. Focusing on fewer things rather than more means you can accomplish these things and secondly I know it works because I’ve been reading his blog, Zenhabits.net, for a while now and he’s a living case study of the power of less.

I find with myself that I like to set my goals extremely high and then inevitably they aren’t achieved or the project is started and never quite finished. This blog has been witness to a few of these grandiose goals such as my posting of my weekly budgets to goals from previous years where I have tried to save X or Y where the numbers were rather large. So this year I am going to take a slightly different approach, I am going to focus on fewer things and by doing that I am hoping to achieve more of them.

Further to that point here is my list of goals for the year, I’ve kept the list to 5 items. I think I could accomplish a great deal more than just these 5 items but I think by starting with these and not putting more down I have a better chance of success

  1. Quit Smoking and drink less
  2. Get my finances in order
  3. Find my passion
  4. Get my side business going
  5. Declutter the house

Each one of these items is important to me and I think that in the long run I would be happier by achieving these than anything else.

Quitting Smoking and Drinking less

This will be the goal that I start working on first because it has the most immediate impact and at the same time it has the farthest reaching impact. The smoking part is in my opinion extremely obvious. Smoking is extremely bad for you and I have never hidden the fact that I smoke and that I would rather be a non-smoker. There is no cutting down on this part of the goal I am sick of it and I don’t want to do it anymore. The second half of this goal is a bit more of what I would call fuzzy and it will tie into the other goals to some extent. I like to have a few beers at the end of a long day, while I don’t drink excessively I do drink fairly frequently. The drinking by itself is not a problem, I enjoy having those couple beers a day, what I believe is a problem is the fact that this habit is extremely expensive and I don’t think I need to do it.

Get Finances in Order

In many ways this goal is the a very significant part of the reason why this blog exists and has existed so long, unfortunately I am still struggling with certain aspects of my finances for example I am not saving much money and I am still carrying a fairly substantial consumer debt load. While my financial situation has improved over the years its still not great and could be a lot better than it is.

  • Savings – increase savings to 15% of my paycheck by end of April (currently its at about 5%)
  • Credit card debt – reduce debt by 20% by the end of the year (this would mean that by the end of the year I would be below 10K)

Those two measurable goals are something that I would like to achieve, I also think that I could do a lot better than this but I would like to start small and keep myself focused. Also this will give me a bit more time to truly define what getting my finances in order really means for me. I pay my bills on time but I have not been making much headway financially and I just want to make sure I tackle it in a way that is appropriate for me.

Find my Passion

Over the past year I have started delve into myself and try to figure out what drives me and what my passions are and for this upcoming year I want to continue to do this. While I don’t know if I’ll be able to find my passion within this calendar year I do want to continue the process of trying to discover what they might be and what I can be doing about them.

Get my side business going

As part of trying to find my passion, and finding myself in some ways, I have discovered that I don’t want to do live the rat race life until I am ready to retire (or die). I want to be able to try new things and to experiment I also don’t want to be a slave to someone else for my bread and butter. I have had a few ideas for starting a side business for a few years but I have never really done anything about it other than dream and talk. This year the goal will be to get this moving once and for all. The worst thing that can happen is it fails.

I have a couple ideas that are potential candidates and I have decided to focus on one of them to drive the idea forward and see what happens. If I make some money off of this that would be great, if I try it and nothing happens then really I am no worse off, but if I try this and it works then this will become the starting point for additional income streams.

One of the starting ideas behind this blog and its name is was to have one million dollars by the time I turn 35, I am now 32 so this is an achievement that is becoming harder and harder to fulfill and I believe that getting off my ass and doing something about a side business is the way to go. Over the next couple months I will be working to getting this going and while I don’t want to blog about it just yet I will once the idea is in place.

What I would like to achieve from this goal is that by the end of the year I would like to have $1000 in income from a side business coming in monthly.

Declutter the house

This goal ties in more to the concept of the year of less, we simply have too much crap and I don’t want to bother with it anymore or worry about it. Just by scanning around the room I am in right now I can see things that we really don’t need like the extra phone and charger stand that aren’t being used and I believe the phone doesn’t even work anymore or the printer that is stacked on the shelf because we’ve replaced it with a new laser printer. I am never going to buy new ink cartridges for it and thus never use it. These are just a couple examples that I was able to find by looking around the room and I am sure that the house is full of items such as these that need to be removed. The end result is that i am hoping to have fewer things to worry about and have to deal with. If anything can be sold or donated then it will be what can’t will be thrown out. I will attempt to initiate this goal slowly because it is not as important as the others I still want to achieve it.

Will I be able to accomplish all of these five goals over the course of the year? The real answer is I don’t know, the one about finding my passion might the one that brings the house of cards down, but I believe that I can and should be able to achieve these. If I am successful then I can always add more items to the list.

2009 A Personal Year in Review

When it comes to the end of the year a lot of people look back at the year that has happened and reflect. For many this doesn’t go past: “wow its new years again, where did the year go.” Personally I think this is a good time to stop and look back at your year, this is where you stop and look at the good and bad – this is the time to be impartial take the good as good and the bad as bad. There is no reason to see what could have been or what opportunities were missed and why. This just leads to dwelling on what might have been rather than on what was and learning from this.

My year was busy, it was both good and bad and there are a lot of places that different things could have happened but they didn’t and I can’t change any of that. This year really has been a journey for me and I believe that I have grown a lot in the year.

The Good.

The good is really great in my opinion I got a chance to watch my daughter grow from an infant that barely recognized me as her father to being daddy’s little girl. She’s walking and learning to talk and you can clearly see her growing day by day both in height and size but also in cognitive ability. It’s amazing to watch this process; this little person is what has kept me going during some of the tough times throughout the year. Seeing her smile light up when I picked her up at the end of the day really made the trivial worries of the day go away.

The other good is that I have grown personally, I have started to recognize that I have a lot of potential and I can get moving into a direction (as part of this process I am aiming to find my passions) while this is a process that has started it is not one that has finished. I am still learning who I am now, not who I was when I was in high school or when I first started working. The reality is that we all change over time and in my case I hadn’t actually seen much of this change so the discovery process is educational, interesting and at times a bit frightening. Overall I am getting a much better sense of who I am right now and who and what I would like to be in the not to distant future. There is much more room for growth.

Other than these two things there was a lot of good, professionally and personally even though there were challenges – work has been really good and I have learnt a great deal. I made new friends and kept in touch with some close friends and I am glad I was able to do this.

The Bad

There is rarely good without the bad. This year has been tough in many aspects: juggling work and everything required for the baby along with maintaining a healthy relationship with my friends, family and wife has been hard. It feels that I have been stretched very thin at times and the thing that has really suffered is the time that I used to spend for me. It feels that over the year there has been no time to recharge and the batteries have been running a bit on the low side. It feels like all of the items that need to be done compete with each other for my limited time and the net result is that I am not able to give as much attention to any one thing as I would like. While at the upper level this doesn’t sound like such a bad thing but it has at times frustrated me and made me feel very down to the point where I think I was bordering on being depressed.

Other than this there was a few other bad things that happened illnesses and lost jobs and friends that have become virtually lost. This is the stuff of life and I haven’t dwelled on any one of these item. I have simply tried making it through them keeping my head on its shoulders. Thankfully nothing really bad happened that I could not deal with.

The biggest bad thing from this year was the fact that there simply seemed to be too much to do and too little time to do it, everything seemed rushed and overly busy. I know that this is a common theme but it was one of the biggest downfalls from the past year, everything needed to be done right away and there didn’t seem to be much time for anything other than rushing around.

The Other

There was some stuff that was neither good nor bad it was just stuff that happened like my finances. they were maintained with some semblance of normality, there was neither serious growth nor loss and in many ways it seems that a lot of stuff just stayed status quo this year. In many ways this year has been the year of stabilization and work. At times this has come off like being in a rut but over the past few years there has been a lot of ups and downs so having a year of a lot of stability and sameness is not a bad thing.

Looking to the future

Along with taking stock of the year that just passed this is also the time for looking to the future and this year is no different for me. I have been thinking about all of the things that I would like to work on in the various facets of my life and the more I think about it the bigger the list gets! But if this last year is any indication there is simply not enough time to do everything especially all at once so the upcoming year will be the year of less in my view. My goals for the year will be fewer and smaller at least initially and if I manage to accomplish some of these goals I can get to the next items on the list. I’ll be posting about these in after the new year.

The year seems to have gone by in a flash and now its time to start another year and unlike this past year I do intend to make some changes, even if they’ll be small ones but I don’t intend to continue to repeat the same actions over and over expecting different results. I wish all of you a safe and happy new year!