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.

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