A full 40 percent of New Year's resolution-makers are fixated on financial goals, which makes me feel either very trendy or very cliched.
Although I don't usually bother with resolutions, I was recently able to pay off most of my credit card debt (which says absolutely nothing about my management skills and everything about how few banks are willing to entrust me with their money.) Currently, my only card with an outstanding balance is the card I use to purchase liquor on review meals. A nightly cocktail isn't a cheap ritual when practiced in restaurants: The annual cost is about $4,000. Add in the bottles of wine that inevitably get ordered when I have more than one review companion, and I've drunk a 1987 Ford Mustang's worth in alcohol by year's end.
So my resolution for 2012 is to rein in my liquor spending. But I wasn't sure how to determine a reasonable monthly figure. I thought about choosing an arbitrary percentage of my income. I considered equivalents: My New York Times subscription costs me $61 a month, and the paper - like alcohol - informs my worldview and facilitates conversations. I tried working backward: If I budgeted for a Manhattan before dinner five nights a week, I'd end up with a number in the neighborhood of $220.
Finally, I decided to ask an expert for advice.
"I haven't been confronted with that one yet," Aaron Coleman, a Boise-based personal finance consultant, said when I reached him by phone.
Coleman, author of Winning With Money: The Budget Tool for People Who Hate Budgets, assured me that I could apply the same budgeting principles to alcohol that most of his clients use to save up for home purchases or Caribbean cruises. "The basic premise is, you have a fixed amount of income per pay period," he explained. "The goal is not to make more money for the banks."
If I don't want to buy booze on credit, Coleman counseled, I need to deal with real numbers: Multiplying the cost of my gym membership by two and subtracting what I save on gas by not owning a car is apparently not a legitimate way to write a budget. Instead, I need to figure out how much money I have left after paying my rent, utility and phone bills, and then decide how to allocate it based on what I've spent in the past. That's the step that trips-up most budget writers, Coleman says.
"People don't like to go through the initial exercise of identifying spending," he says.
According to Coleman, unrealistic budgets are bound to fail. So are budgets that are highly categorized: He strongly advised against creating separate budgets for cocktails and wine.
"That frustrates people," he says. "If you get too confined it can be an emotional drain."
And rather than focus entirely on spending, Coleman suggested I tackle my alcohol quandary by focusing on earning.
"If one of your goals is drinking a really nice wine, think about what you need to do to make much more money," he says.
Sounds like something to contemplate over a cocktail.