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Alcohol & Debt: Financial Impacts From Alcohol Use & Abuse

Heavy alcohol use and abuse often come with significant debt, threatening the financial well-being of the drinker, the stability of their family, and their financial future.

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Part of the reason why is that alcohol has become more and more expensive over the years.[1] This can strain budgets and prompt people to do things like charge basic bills to credit cards or take out payday loans with high interest rates to pay rent.

In addition, alcohol misuse often results in costly healthcare needs, high legal bills, and reduced productivity at work, which triggers a drop in income. Many find that the only effective solution to the financial drain that comes with alcohol use and abuse is to stop drinking altogether through the help of alcohol addiction treatment.

Statistics on Debt & Alcohol 

The following statistics on alcohol demonstrate the financial effects of ongoing alcohol abuse:

  • Alcohol sales increased during the pandemic, and then, supply chain issues caused prices to rise. Inflation ensured that prices remained high on alcoholic beverages, with an increase of about 5.9% over the 12 months before April 2023 — higher than the average 4.9% inflation experienced across sectors, according to the Bureau of Labor Statistics.[1-3]
  • Financial problems may increase the urge to drink especially among elderly people, which in turn increases financial problems.[4]
  • Those who are homeless have high rates of alcohol use disorder, which may or may not have started before becoming homeless.[5]
  • Lost productivity due to alcohol use and abuse increases financial strain due to missed days at work, job loss, and subsequent loss of income.[6]
  • Debt caused by alcohol use doesn’t just hit the drinker and their family. Drinking cost U.S. taxpayers $249 billion in healthcare and law enforcement costs in 2010, or about $2.05 per drink.[7]

The Role Debt Plays in Alcohol Use & Abuse 

Alcohol abuse and dependence have serious financial ramifications for both the individual and society as a whole.

Here are a few ways that alcohol use and abuse can negatively impact the finances of someone who drinks heavily:[6-10]

Direct Costs of Purchasing Alcohol

Regular alcohol consumption involves the straightforward ongoing costs of purchasing beverages, which can strain a budget over time, particularly those who consume substantial quantities of alcohol or opt for expensive brands.

Healthcare Expenses

Excessive alcohol use can result in a number of different physical and mental health concerns that require medical care, medications, hospitalizations, and rehabilitation treatments. This means high medical costs for the drinker and an increased burden on the healthcare systems that fall to taxpayers.

Lost Productivity & Income

When it comes to making money, alcohol abuse can lead to absenteeism at work, decreased productivity, and income loss due to inability to perform effectively. Not only does this decrease earning potential in the moment, but it can also lead to job loss and an inability to find new employment.

Legal Costs

Alcohol-related charges, such as driving under the influence (DUI) or public intoxication, can cause financial problems in the form of fines, court fees, and the cost of legal representation in court. If the legal issue is severe enough to cause the person to miss work or to mean a long-term incarceration and damage to reputation, this can also cost in the form of lost income.

Increased Insurance Costs

Individuals with histories of alcohol abuse could face higher premiums for health insurance, life insurance, and auto insurance due to associated health and safety risks. Additionally, extra trips to the doctor or the emergency room due to accidents under the influence or alcohol-related health problems mean more spent in co-pays and medication costs.

Property Damage & Liability

Alcohol abuse may lead to accidents, injuries, and property damage, which results in costly repairs, insurance claims, or settlement payments for repairs as well as potential court costs if the incident ends up in litigation.

Debt Accumulation

When under the influence, people tend to have lower inhibitions and less concern for their financial well-being, making purchases on a whim more likely. Many people don’t even remember the purchases or whom they gave money to when they wake up the next day, while others actively enjoy the combination of drinking and shopping.

Family Financial Strain

When incidents and purchases related to alcohol abuse begin to drain family accounts, other family members are forced to cover the costs and make ends meet. The friction that this causes can ultimately trigger the person to drink more and worsen the issue.

Education & Career Opportunities

Chronic alcohol abuse can hinder educational and career advancement opportunities, limiting earning potential and long-term financial success.

Rehabilitation Costs

Seeking treatment for alcohol use disorder (AUD), such as rehabilitation programs and therapy, can be a significant financial burden. Still, this investment will ultimately save money in the long run if it helps the person to stop drinking.

Social Welfare & Government Costs

Alcohol abuse imposes costs on communities at large, as taxpayer funds end up being diverted to cover the cost of medical care, law enforcement, and social services aimed at addressing the consequences of alcohol misuse.

Investment in Treatment for Alcohol Abuse

While treatment for alcohol abuse and AUD can be costly, it is well worth the investment in the long term. Research shows that every $1 spent on addiction treatment services can bring a benefit of $58, and every $1 spent on rehab services saves $7 in criminal justice costs and $4 in healthcare costs.[11]

People who go through evidence-based treatment for AUD usually come out of rehab able to hold down a job, with fewer health issues, and with a brighter future ahead of them. The cost of addiction treatment pales in comparison to the long-term financial benefit of a life without chronic alcohol abuse.

Insurance often covers a chunk of the cost of addiction treatment. Treatment providers also frequently offer payment plans to make the remaining cost of treatment more manageable for people in need.

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Medically Reviewed By Dr. Alison Tarlow

Dr. Alison Tarlow is a Licensed Clinical Psychologist in the States of Florida and Pennsylvania, and a Certified Addictions Professional (CAP). She has been a practicing psychologist for over 15 years. Sh... Read More

Updated March 22, 2024
  1. Here’s how the price of your beer has changed over time. Sykes, S. CNBC. Published June 2, 2023. Accessed October 16, 2023.
  2. The concerning increasing trend of alcohol beverage sales in the U.S. during the COVID-19 pandemic. Castaldelli-Maia, JM; Segura, LE; Martins, SS. Alcohol. Published online July 2021.
  3. Brace yourself for booze-flation. Your holiday alcohol run is just the beginning. White, R. Los Angeles Times. Published December 13, 2021. Accessed October 16, 2023.
  4. Are changes in financial strain associated with changes in alcohol use and smoking among older adults? Shaw, BA; Agahi, N; Krause, N. J Stud Alcohol Drugs. 2011 Nov; 72(6): 917–925.
  5. Associations between socioeconomic factors and alcohol outcomes. Collins, SE. Alcohol Res. 2016; 38(1): 83–94.
  6. Assessing the costs of excessive alcohol consumption in Minnesota. Gloppen KM, Roesler JS, Farley DM. American Journal of Preventive Medicine. 2022;63(4):505-512.
  7. Excessive drinking is draining the U.S. economy. Centers for Disease Control and Prevention. Last reviewed April 14, 2022. Accessed October 16, 2023.
  8. What are the economic costs to society attributable to alcohol use? A systematic review and modelling study. Manthey J, Hassan SA, Carr S, Kilian C, Kuitunen-Paul S, Rehm J. PharmacoEconomics. 2021;39(7):809-822.
  9. The effects of prices on alcohol use and its consequences. Xu X, Chaloupka FJ. Alcohol Research & Health. 2011;34(2):236-245.
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