Americans Want To Quit Their Vices - And Advisors Can Help

Fully one-third of Americans are planning to reduce how much they spend on "financial vices" because of the economy, according to research from Bankrate.com, with important implications for advisors and their clients.

The survey distinguished six different vices — alcohol, lottery tickets, casino games, tobacco, sports gambling, and marijuana — and showed that 84% of Americans spend money on at least one of them. 32% do so at least once a week, half do so monthly, while 11% take on debt to partake of their vices.

Households with higher income, as well as Baby Boomers, preferred alcohol and gambling, while lower-income households were more likely to spend on tobacco or marijuana. 

The surprising prevalence of spending on these financial vices is important to consider for financial and retirement planners. Cash is the most common form of payment for these activities, making it difficult to track how much clients spend on it. This in turn makes it hard to plan for these expenses, even before considering that clients may be reluctant to admit to some of this spending.

However, with one-third of respondents saying they plan to cut down on this spending, there's an opportunity for advisors here to help people realize how much these vices cost, whether they really fit in with their clients' long-term plans, and finding alternatives to or more structured ways of enjoying these activities. 

For younger clients especially, who may not be as familiar with the power of compound interest, showing how much they could improve their future living standard by turning regular vice purchases into regular investments could be key.