How to manage your financial vices

Each of us have specific items or activities for which we are more than willing to pay a premium. In fact, deciding what we are and aren't willing to spend money on is one of the core issues in personal finance.

A willingness to pay extra for everything would quickly bury most of us in debt. At the same time, willingness to pay for nothing will burn out even the most frugal among us. When allocating our spending, we will likely each have a couple of financial vices that surface.

What is a “Financial Vice”?

Wikipedia defines a vice as “a practice or a habit considered immoral, depraved, and/or degrading in the associated society.” This definition may be a little intense for our own purposes. However, if we equate the “associated society” with the personal finance community, an interesting concept emerges.

My definition of financial vice is, therefore, “any regular expense we willing include in our budgets that may appear extreme, bizarre, or down-right ignorant to many members in the personal finance community.” Most of us have one or two financial vices that are inconsistent with the other patterns in our budget. These are the expenses that would make our friends and family cry, “What in the world are you thinking?”

Sometimes these are healthy vices — expenses that we passionately choose and that bring benefit into our lives. Other times, our friends and family may be onto something: Unhealthy financial vices have the potential to do some serious damage (often to more than just our budgets).

I won't speak for J.D., but he's written about several of his own financial vices both when he was fumbling in the dark and since entering the third phase of his personal finance journey. I will, however, speak for myself. [J.D.'s note: Comic books have historically been my biggest financial vice. You all know that, right?]

My Primary Financial Vice

There are several financial vices that tend to consistently surface in my own budget. The primary one in my life right now would have to be Brazilian jiu-jitsu training.

I love training in martial arts. I'm far from a professional — just the opposite. I'm unmistakably new to the sport. Nevertheless, I love how I feel when consistently training. I love the physical workout, the mental benefits, and the instructors/students.

There's a gym close to me that offers Brazilian jiu-jitsu (with an authentic teacher), Muay Thai, and Boxing classes six days a week. It's close, it's convenient, and it's fun. The price I pay? $168 per month! Outrageous? Understandable?

To put it in perspective, Courtney and I share one car to save money. Just yesterday we had a 30-minute conversation about whether or not to spend an extra $15/month to get a DVR with our cable/internet package. The furniture we need for our temporary rental is coming from a combination of Goodwill and 4th-level family hand-me-downs.

Despite the efforts we go through to save money in some areas of our life, we are both okay with this oddball expense. Why? Because it passes the ground rules we've established for managing the financial vices in our own life.

4 Questions to Help Control Your Financial Vices

Here in the Baker family, we try to ask ourselves four questions when face to face with an expense of this nature:

  1. Is it impulsive? Courtney and I usually act as each other's impulse alert. If one of us comes up with a wacky, impulsive idea, it's the others responsibility to sound the alarm. In the martial arts example, it's been a consistent desire of mine for 2-3 years now. I trained before our recent overseas trip and even spent a couple months training while we were in New Zealand.
  2. Is it consistent with our other goals? This is tough because many of these expenses will work against our financial goals by nature. However, we try to consider any ancillary benefits that are generated from the financial vice. Martial arts helps my fitness goals, provides me with a fun community of people, and helps me to stay mentally calm while under intense pressure (trust me).
  3. Can we control it? This rule is primarily focused at me. I have an extremely addictive personality, so I struggle consistently to maintain balance and control. In general, I try to avoid anything even remotely related to “collectible” or “massively multiplayer online” (long story). We both try to avoid expenses that are destructively addictive by nature, such as gambling, alcohol, and tobacco. (Note: I'm a proud coffee drinker!)
  4. Are we both on-board? For us, the last condition is that both parties are fully supportive of the expense. Even though the training expenses is for only me, I have Courtney's full support. Without this type of support from a spouse or significant other, vices of this nature can stir up a ton of resentment.

If an expense seems to be of an excessive amount, we run it through these four questions. Most of the time, it fails to pass one of the questions. In rare cases, we find ourselves with a true financial vice that emerges.

Limiting Your Financial Vices

Allowing yourself a financial vice can be a huge blessing (even directly to your finances). However, if you aren't careful, over time your definition of vice may expand to be synonymous with anything I want. To help control this, Courtney and I try to limit ourselves to only one major vice at any time.

Courtney supports my martial arts training and I do everything I can to support her journey to improve her photography skills (her primary financial vice). If we choose to pursue something else, it means either eliminated or drastically reducing our current vice. Of course, sticking to only one financial vice each is easy for us…we can't afford any more!

Joking aside, I'm interested in hearing your own insight into this issue. Have you found your own way of keeping your vices in check? Share your financial vices in the comments below!

J.D.'s note: I'd argue that what Baker has described isn't a vice; it's too controlled. I'd say it's more of an indulgence. Conscious spending like this is great because it can lead to improved happiness. A true vice is something that you can't control, and isn't really conscious. Right? Tune in tomorrow when my wife reveals one of our household's financial indulgences! Photo by dlcampos.

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Chett @5k5k.org
Chett @5k5k.org
10 years ago

High speed internet, cable, and cell phones. Between those three items I spend about $120 a month. (I’m sure that’s cheap by a lot of people standards. Basic cell phone, basic cable.)

I’m sure many people consider all three necessities, but I was perfectly happy without them 8 years ago, but can’t seem to let any of them go now that I’ve gotten use to them.

basicmoneytips
basicmoneytips
10 years ago

I love coffee and there is a coffee shop across the parking lot from me at work. I know a cup of coffee is one of the least economical things you can buy out. The markup is huge.

However, it is relaxing for me to take a break on occassion and go have a cup. I limit myself to twice a week max and I just get the coffee of the day, no fancy drinks.

It costs me about $25 per month, but I think it is worth it.

Mrs. Money
Mrs. Money
10 years ago

I think yours isn’t a vice. I think it’s something you enjoy and is worth spending money on. I think my vice is eating out and stopping at the grocery store three million times a week! Great ideas to combat it, though! 🙂

Cara
Cara
10 years ago

“Most of us have one or two financial vices that are inconsistent with the other patterns in our budget.”

Or, to put a more positive spin on things, we scrimp on things that aren’t important to us so we can splurge on things that are. I don’t see the martial arts lessons as a vice at all, especially if it keeps you healthy. You can’t spend too much on your health, IMO.

My “vice” is running half marathons. I like planning weekend trips around races so I can explore new places.

Baker
Baker
10 years ago

J.D. (and several of you!) are absolutely correct!

My training isn’t a ‘vice’ anymore, because we’ve learned to keep it in check and control it. Indulgence is a much better word.

However, I *do* think it’s possible for mere indulgences to turn into vices if we aren’t careful. The ground rules we established help us manage the true ‘vices’ and ensure that only genuine ‘indulgences’ emerge! 🙂

Sam
Sam
10 years ago

Hmmm… we manage our financial vices (mine would be clothes, shoes, jewelry, and original art and Mr. Sam’s would be tools and car parts for his antique car) by utilizing our allowance system. We each have some freedom to spend in that we each have an allowance that we can spend as we see fit, assuming that we are also covering things like gas, groceries, personal expenses, eating out, etc. I generally can work my allowance such that I’ve got about $100 to spend as I like. Our other financial vice is travel, we save up for our trips and… Read more »

Kathy
Kathy
10 years ago

Thanks for the post. I’d agree it’s an indulgence. But it falls into one of my “ok” categories of improving/maintaining mental and physical health. That is important to long-term financial health too, correct?

CB
CB
10 years ago

I’d say your definition of a vice is spot on considering your audience. How many times on a pf blog do you see someone say they spend $X on such and such only to have people comment, aghast that you could spend $X on that when you should be spending $X on this? Or for example, there are people on GRS that critique one of the Tyler’s budgeting system where he saves so much and pays the bill with so much and then the rest is spent however he pleases. For some, if he spends $5000 on a TV that’s… Read more »

carmie
carmie
10 years ago

I wouldn’t call that a vice, especially if you go train on a regular basis. Think of it as an investment in your health spending future. The best exercise is the kind you will do regularly!

Tim
Tim
10 years ago

Fast food is my biggest financial vice. I periodically review my spending for regrets and fast food tops the list. Still I continue to purchase and eat fast food, spending an average of $53 a month. I wouldn’t mind spending this money if it was on something that fit in with my goals and happiness. The fact is that I know it’s not good for my budget or health but I still eat it for the instant gratification and convenience. For lent I’ve decided to offer up fast food and I hope this will help me break the habit for… Read more »

Tim
Tim
10 years ago

Just the other day I was drinking my afternoon soda at work. My wife and I stopped buying soda at home so this is the only one I get all day. After drinking roughly 64 ounces of water I just want something different. I realized I don’t really enjoy the taste of the soda. However, yesterday there I was buying another soda. It has become a ritual that costs me roughly $250 a year. Small change in comparison to the overall budget but that is almost a season ticket to college football. This also comes out of my personal spending… Read more »

Mr Credit Card
Mr Credit Card
10 years ago

It really depends on how much money you have and how financially you are well off isn’t it?

If you earn a lot, what is spending some money every month on comic books or taking martial art lessons?

Dave
Dave
10 years ago

My vice is my monthly comic books. I spend a lot less now than I did a couple of years ago. I use to spend 50 dollars/week now I spend 50/month. I only get what I really enjoy now and I get it through an on-line discounter which saves me more money.

olga
olga
10 years ago

Surely a vice, just like mine is to run mountain ultras. To be healthy is enough to jog 30 min a day and have a set of dumbells, do push ups and crunches. Everything else is extras. I understand it. Running 100 miles a week to prepare for a 100M race is not only extra, it might even be not that healthy after all:) But it does work as a therapist for the mind, and it does bring you a certain circle of like-minded friends that you wouldn’t otherwise have. That said, controlling it is a huge thing to keep… Read more »

Steve S
Steve S
10 years ago

Not related to article: I wouldn’t characterize alcohol as “destructively addicting”. I drink maybe twice a month, but only in social situations and never alone. I enjoy it, but never have the urge to do it that often. Don’t let a few alcoholics paint the picture for the rest of us. Related to article: I went through this same thing as well with running races. The wife and I were spending upwards of $1000 /year on races, but as mentioned above, the expense is worth it for the experience (it doubles as travel sometimes) and because it keeps me healthy… Read more »

Anne
Anne
10 years ago

my vice used to be scrapbook supplies and fabric and things like that. Now I just stop going in those stores, and if I like something, I post on my blog to look at. And I am making an effort to use up my supplies.
My vice now is probably bubble tea. I really enjoy it and I know it is also like the coffee thing, expensive and they add up. But I do like to get one probably once a week. It is a hard thing to give up!

Rosa Rugosa
Rosa Rugosa
10 years ago

Our true vice in every sense of the word – cigarettes! Bad for the budget is the least of it!

Kevin M
Kevin M
10 years ago

I don’t think this is a vice at all – just look at the benefits it provides you – physical and mental stimulation and relationships with instructors and fellow students. It’s clear you’re cutting spending in areas you don’t value (furniture, cable TV, etc.) to spend where you choose.

Lulu
Lulu
10 years ago

My vice seems to be getting scented candles and air fresheners. I have a stockpile in a kitchen drawer and still keep looking out every Sunday to see if there is a new one on sale at CVS.

I do budget for it and only spend about $7 a month…but that is $7 for stuff I already have tons of so it is still a bit of a waste.

On the other hand my place always smells great and I have candles to give out as gifts when I realize that I have 9 vanilla candles and 15 cinnamon ones!!!!!

Brenda
Brenda
10 years ago

Pilates. Private session once a week. I could do group sessions for a third of the cost, or mat classes for 1/8 of the cost, but I really like having the one-on-one attention. I’m in the best shape I’ve been in years.

Kristin
Kristin
10 years ago

@Tim – Soda

I’m with you on the soda addiction. Diet Coke is my vice. My husband and I easily spend $30+ on this nasty stuff each month. I’d love to quit. I’ve tried a time or two. Then, I’m sleepy, irritated, have a headache and reach for another one… We can start our own soda anonymous support group together!

Cara
Cara
10 years ago

@olga: that is so cool that you run ultras! A 50 mile ultra is a dream goal of mine. I couldn’t imagine doing 100 miles!

Nancy L.
Nancy L.
10 years ago

@CB (#8) hit the nail on the head as to why Baker’s right defining his class as a “vice”. If someone was posting specifically about their budget on a pf blog, and they mentioned that they spent $168 a month for a specialty class, there will always be people who point out that the person could save money by cutting out that expense. It’s very clearly a “want” vs a “need”, and most pf communities are more focused on paring down to just the “needs” rather than indulging in “wants”, so there’s often a negative response to “want” based discussions.… Read more »

Molly On Money
Molly On Money
10 years ago

I agree with JD, these are indulgences. I look at what in our lives seemed like luxuries and are now needs.
Oh, and I am an ex-Diet Coke addict! I’d have one a day at 3pm. As the years past I’d find myself dreaming about the Diet Coke starting at 10am and than it moved to all I thought about! I couldn’t wait for 3pm to roll around. I can’t figure out what is so appealing about it- it tastes nasty and gives me a headache after drinking one!

J.D.
J.D.
10 years ago

For those of you who are ultra runners, be sure to check out The Turtle Path, the blog from my friend Pam Smith. She loves ultras — even hundred-milers.

Beth
Beth
10 years ago

RPG Gaming would be my vice. It gets a tiny allowance in the monthly budget — just $5 — but as some of you know, with books, dice, maps, minis and other accessories it can get expensive and take all the money you want to throw at it.
Having to save for (literally) months for a book is a good thing because I sometimes find a used copy at Powell’s and I’m saved from buying some of the duds that get published and sink without a trace.

Herb
Herb
10 years ago

There is nothing wrong with having a “vice”, it is all about balance. If you are saving for retirement, have an emergency fund, then going crazy on something that you love and enjoy is totally recommended. No point in trying to save as much as you can if you are not living your life right now.

Matt
Matt
10 years ago

I wouldn’t classify a martial arts class as a vice, unless you’re learning it so you can go out and start fights ;). A martial arts class should be considered an investment in your health – it’s great exercise, and once you’ve got a good hold on the basics, you can do at least some of the practice on your own (which doesn’t cost you anything), and it can be handy in the very unlikely event that you’re attacked.

jeffeb3
jeffeb3
10 years ago

You have to “Do what works for you”, but I really don’t think agreement with my spouse is healthier than agreeing on a budget. We tried agreeing on these vice spending, but (to follow the martial arts example) we might agree the training is worth it, but have an argument on buying home training mats, certain protection, or energy bars. Each of these arguments drain our relationship. What works for me is to have a budget that I can spend however I want, and she has the same budget to spend on what she wants. We still discuss the purchases,… Read more »

chiefcaba
chiefcaba
10 years ago

@ Soda Club Anonymous I’m with you folks although I am down to one can a coke a day! It is a rough habit to quit for all the reasons mentioned above. If you do try and you are someone who drinks 3+ cans a day I highly, highly recommend a gradual decline instead of cold turkey because you are less likely to have the irritable, tired, headache issues that often lead me back to drinking more. Honestly, I found the best tool for me was those stupid, overpriced half cans of coke. I cut out a half can of… Read more »

Lauren Hill
Lauren Hill
10 years ago

Hello GRS Readers,

I’ve been a GRS reader for over a year now and I’ve never posted a comment (Sorry J.D.!) This post has made me admit that my coffee addiction is a vice. My habit could quickly run upwards of $20 per week, but I limit myself to once a week.

My vice would be a lot less expensive if I drank regular coffee but I love the fancy fraps and caramel machiatto’s that cost on average $3 a cup instead of a regular coffee that I could get for say half that.

olga
olga
10 years ago

Pam is awesome! I am so looking forward her WS100!
May I add she ran best times for boosting confidence at the races I RD’ed? 🙂 She is natural, and she is having fun with it.

kaitlyn
kaitlyn
10 years ago

I’m with the people that would consider this an indulgence instead of a vice. I adore martial arts training. If I could at all afford it (right now, it would be 100% cc debt that I can’t pay, boo), I would be taking classes.

My vices are food related. Dinners out, or buying expensive specialty ingredients to make it at home. Then I get crazy busy at work, don’t have time to make it, and the food goes to waste.

Sara
Sara
10 years ago

I guess my financial vice is leasing a luxury car. The PF community in general considers leasing to be downright stupid, but there are a lot of advantages to leasing. I truly enjoy my car, and I can afford it (thanks to not wasting money on other things that I don’t value). Plus, I got a great deal on it and I’m driving a car that’s more expensive than my payments would suggest.

RJ Weiss
RJ Weiss
10 years ago

This one is easy, gym membership.

I’m there everyday playing basketball, going to yoga class, lifting weights, swimming, using the sauna, etc…

It’s well worth $100 a month (family membership), even though most people mention that you can easily work out at home.

Naomi
Naomi
10 years ago

I’m embarassed to admit this: Facials and expensive face cream. Yikes.

Lee
Lee
10 years ago

My vice would be eating out for lunch. I go through many months eating out only very occasionally then I completely fall off the wagon and eat out every day. And not cheap fast food but sit-down pub food with a beer. I can easily spend $300-400 a month doing this. Although my worst was a few years ago when I spent nearly $1200 in one month, although this was because we were going out after work for dinner/drinks as well and my wife was joining me. Good times though! Up hear in Canada you really need to make the… Read more »

C.H.
C.H.
10 years ago

My hobby is fly fishing, so needless to say I spend a portion of my discretionary income on various equipment and flies. I have found that by simply keeping a better inventory on my equipment, I can save money by reducing “overlap” – especially with lures.

Cara
Cara
10 years ago

Oh yes, buying my lunch is a vice for me too. But in my defense, I buy from the company salad bar every day. It’s easier than buying and cutting up a garden’s worth of vegetables every week (I like lots of variety in my salads). It comes out to about $130/month, and it’s healthy, so I don’t feel that bad about it.

Wayne K
Wayne K
10 years ago

I excercise daily (run about 25 miles per week) but I will not pay for a gym membership so, instead, I run in all kinds of weather.

However, I buy season tickets to my college alma mater football games each year. These are pricey and all the games can be seen on TV.

I do not mind running in the heat or rain but I WILL NOT miss seeing the football games live.

For me this makes sense based on how I weigh the pros and cons and value/happiness I receive.

Luke
Luke
10 years ago

I’m loving reading about your vices for all the wrong reasons – you’re just giving me ideas for things to spend my money on in future! I’m somewhat unusual in that I don’t have any particular financial vices as I’ve been trying to pay off student debt for many years while living in London (£800/$1200 a month for our one bedroom flat). From my monthly takehome of £1300 (after pensions etc.) I only get to spend about £30 on myself (just over 2%) It’s not always the most fun and perversely enough I think I’m going to have to train… Read more »

Financial Samurai
Financial Samurai
10 years ago

Good stuff Baker. You will lose A LOT of weight if you keep up the Brazilian JJ! My vice is spending a lot of money on last minute travel and experiences. If I planned better, I probably could have saved $500 on two roundtrip tickets to Hawaii this past Tuesday. Instead, I decided on Saturday evening that we’re going this past Tuesday and we did it! Then again, that’s the whole point of making and having money… to not worry about money and have the freedom to get up and go to Hawaii in two days notice for a week,… Read more »

Brent
Brent
10 years ago

In a similar vein I dance Argentine Tango and almost always feel justified in my spending time and money on doing it socially and to improve. But sometimes I do spend impulsively, I don’t have a allowance or anything like that because there is nobody else I’m taking money from. I am usually more on the side of denying myself instead of rewarding so it tends to be in a balance.

Rita
Rita
10 years ago

I have two vices- martial arts training and eating out. I train at two gyms (one for muay thai and boxing and one for kenpo and jiu jitsu). The total price for both gyms monthly- $220. I know that some people would think that this is excessive, but I feel like it is completely justified. My husband attends one of the gyms so we get to spend time doing something together and I spend a majority of my free time at one place or the other. I enjoy the mental and physical benefits of training and the ability to work… Read more »

Christine T.
Christine T.
10 years ago

I wouldn’t categorize it as a vice or indulgence. I agree it’s a want vs. need but anything that teaches you a new skill I put it more in the category of “education”. I feel like it’s the same as calling college an indulgence, which I guess some people would say it is 🙂

Jolyn@Budgets are the New Black
[email protected] are the New Black
10 years ago

I agree: This is an indulgence; not a vice! I think a vice has to be something that isn’t good for you: drinking too much; smoking; eating out too much… Some indulgences can become vices when they go beyond moderation. Is the martial arts taking too much time away from your family? Is paying that fee keeping you from putting food on the table? Or paying the light bill? An indulgence isn’t necessary, but it’s not hurting anything, either. We indulge in basic cable; buying good beer to drink at home (none of that watered-down American stuff); dance lessons for… Read more »

Cynthia
Cynthia
10 years ago

It is interesting to hear what some people call a vice, and another person will say it is justified for health reasons or overall quality of life. When my kids were young I used to scrimp on everything and make clothing and bread from scratch, birthday cakes were always homemade and never store bought. But I spent freely on books and music lessons. I still have a “bedroom” that is designated as “the library” to store all the books. Now that they are grown, I weed out the books each year to donate to a charity book sale, but I… Read more »

Cely
Cely
10 years ago

I think it’s also important to note that, for a particular “vice” (or indulgence), there are different levels of spending.

Say your vice is skiing. You spend hundreds for an annual ski pass. But it’s also possible to spend thousands more on new skis, jackets, pants, goggles, gloves…then trips to the best ski resorts, etc.

Same with photography. You can indulge your hobby without spending a lot of money, but it’s very easy to spend thousands on equipment.

Perhaps an indulgence turns into a vice when you spend money on every last bell and whistle.

chacha1
chacha1
10 years ago

Is it just because this is a PF blog that so many people are conflating “hobby” or “indulgence” and “vice”? I think VICE means, straight up, something that’s not good for you that you choose to do anyway. We’re talking seven deadlies here … aka the Cardinal Vices: gluttony, pride, sloth, envy, lust, greed, wrath. I would put addictions squarely into the lust category. Luxury cars might go into pride. Manolos and Birkin bags might go into envy. I don’t see where exercise fits, folks! Sure, you can stay fit without any gear at all, but making a budget line… Read more »

Tyler Karaszewski
Tyler Karaszewski
10 years ago

Doing anything at all beyond keeping yourself alive and functioning in society is hardly a vice, or even an indulgence, really. I mean, half the commenters are listing exercise as a vice. It’s not, nor is it an indulgence, anymore than showering is an indulgence. This post has pretty much redefined “vice” to mean “interest”, read Baker’s definition again: any regular expense we willing include in our budgets that may appear extreme, bizarre, or down-right ignorant to many members in the personal finance community. Even still, using Baker’s definition, I don’t think I have any vices, because none of my… Read more »

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