Is that picture above not just making your mouth water by looking at it?! 🙂
Since wine is one of my personal favorite drinks as well as being a popular selection among the general population, I figured it was high time that I devoted a blog post to the financials surrounding this most delectable of drinks.
So, let’s get started!
First, let’s assume that you, as a loyal, free thinking wine connoisseur, drink the recommended 2 glasses of wine per day that is supposed to improve your health, prevent cancer, and extend your life.
OK! Two glasses of wine per day. Assuming that it takes the normal 5 glasses of wine to make up a bottle, this equates to drinking a bottle of wine every 2.5 days, on average.
Now that we have our bottle consumption rate, let’s look at our different options for wine bottles available to the everyday consumer!
• Trader Joe’s sells Charles Shaw brand wine (known “on the street” as Two Buck Chuck) for $2.99 per bottle
• Wal-Mart sells Oak Leaf brand wine for $2.97 per bottle
• On the other hand, you can get a perfectly drinkable bottle of good wine at the wine store for $10 per bottle
Let’s now assume that you drink wine each night at the previously mentioned rate of 2 glasses per day from when you are 24 years old until you are 65 years old.
Given these assumed conditions, just how much would you save if you opted to be a religious $3 per bottle wine sampler? Let’s take a look.
At the wine consumption rate of 1 bottle of wine every 2.5 days, this corresponds to 146 bottles of wine per year! Pretty crazy when you calculate it all up eh?!
Now, take a look at the Google Docs spreadsheet at the link below. Assuming that this consumption pattern continues until age 65, you will end up spending the following total amounts for wine:
- $61,320 for the $10 per bottle wine
- $18,396 for the $3 per bottle wine. This represents a real cost savings of $42,924 total! Wow!!
Even though a cost savings of $42,924 total is a pretty impressive total, for the sake of interest, let’s see what happens when we throw Time Value of Money (or the idea that money grows over time exponentially when invested properly) in to the mix.
Assuming that the $1,022 cost savings that results each year from buying the $3 bottle instead of the $10 bottle is invested at a 10% rate of interest each year, we see in the spreadsheet at the link above that at age 65, this results in a savings of $549,465.01. This is even more impressive for sure!
This findings are no doubt impressive, but what does it mean overall for the every day consumer? Well, what it means for me are the following key takeaways:
- First, it definitely makes me even more cognicent of the fact that every day expenses add up quite greatly over a long period of time.
- The second key takeaway relates to the topic of wine taste. Essentially, what we all need to consider is this – Is the increased “quality” of taste of a more expensive bottle of wine absolutely necessary for you to have in a wine you drink every day?
- What I like to do is to have several good quality bottles of wine at my apartment for sharing with friends when they come over or for entertaining guests for dinner. However, on the days when it is just me at my apartment, and I feel like having a glass or two of wine with dinner, I prefer to drink more economical wines.
I hope this helps to get you thinking about little things you can do to restructure your spending and save money. And, as always, please let me know if you have any questions!
Keep on learning!
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