Maybe you just made it through dry January or are contemplating taking a hiatus from alcohol sometime in the near future after watching other people complete the challenge. These self-imposed pauses on imbibing have grown popular in recent years, often as a way to reset after a holiday season of overindulgence or as an opportunity to check in with drinking habits.
The health benefits of cutting out alcohol have become increasingly evident too, including better sleep, weight loss and reduced blood pressure and cholesterol levels. The cherry on top: pressing pause on drinking can make a big difference when it comes to your financial health.
How much can you save by not drinking for a month?
“Going entirely alcohol free for the month could save between $300 and $1,000, depending on consumption,” said CNBC, citing Fred Harrington, the CEO of Coupon Mister, a site with money-saving tips. Another estimate was much lower, at “about $50 per month,” based on Americans’ spending of “an average of $583 on alcohol each year,” said Yahoo Finance, citing Own Your Limits, an educational campaign run by the Department of Defense.
There are a number of variables that will impact your exact amount of savings from nixing alcohol. For one, it will depend on how much you usually drink and where you tend to do it, whether at home over dinner, at a local dive or at a cocktail bar. “For example, a six-pack of beer from a grocery store might run $10 to $15, whereas a single cocktail at a bar could cost $12 to $18,” said CNBC.
Your location and timing can also influence the prices you pay. “Big-city bar prices are often higher than those in small towns and social habits — weekly happy hour, weekend outings — also play a huge role,” said Douglas Boneparth, a certified financial planner and the president of Bone Fide Wealth, to CNBC.
Lastly, there is the question of what you prefer to drink. If you are a fan of Budweiser, for example, you will pay an average of $0.73 per serving from a can, or $4.19 per 16 ounces of Bud Lite draft from a bar, said GOBankingRates. On the other hand, if you prefer a glass of wine, you will pay an average of $3.60 per glass of white wine at home, or $8 at a restaurant.
What are the other ways you can save by cutting back on alcohol?
While the cost of alcohol itself will account for a big chunk of your savings during a dry month, there are other expenses associated with drinking that are worth considering as well.
If you go out, “there are all the other potential expenses involved in a night of drinking: tipping the bartender, a taxi or rideshare home, that late night pizza you probably wouldn’t have ordered if you weren’t buzzed,” said Yahoo Finance. You might just feel generally spendier with a few drinks in you, too — “people may make impulsive online purchases when they’re inebriated,” said CNBC, citing Danielle Dick, a psychologist and the director of the Rutgers Addiction Research Center.
Additionally, said Yahoo Finance, there are “indirect, long-term expenses you might reduce by cutting back on alcohol, such as medical costs or even insurance premiums.”
What are some smart ways to use your dry January savings?
One way to stay motivated throughout your no-drinking challenge is to keep track of how much it is saving you — and then decide what you want to do with that money instead.
Two possibilities: use the money to treat yourself or add to your savings. If you are saving up for a vacation, for instance, “[UK card provider Caxton] estimated three years ago that a couple who quit drinking in January could fund a two-night stay in Amsterdam with the savings they made,” said Bloomberg. Even if your savings do not seem all that significant, Claire Exley, the head of investment company Nutmeg, “calculated that if you save just $126 by going teetotal every January and invest it in a savings account with a 5% annual return, it will be worth $880 in five years, and $1,849 in 10.”