How to afford your favorite vices without going broke

• It's okay to spend income and earnings on consumer vices, but it needs to be carefully managed.
• Understanding the time value of money is key to saving for the future.

Vices are nothing to ashamed of, in fact, everyone has at least one. 

"There's fashion, jewelry, nice watches and so on," says wealth manager Joe McLean, founder of financial services firm Intersect Capital, which helps superstar athletes from the NFL, NBA, PGA, MLB and NASCAR manage their money. 

While McLean requires his clients to save 80% of their earnings, he does not rule out spending on vices.

"I think it's okay, but it's managing that [vice]," he said.

Managing vices is difficult, especially among high-earning athletes who may not receive the financial education they need. Nearly 80% of former NFL players have gone bankrupt or come under financial duress just two years after retiring from the league. 

One of McLean's client is Houston Texans' linebacker Whitney Mercilus, who was lucky enough to learn about finances early in life. "My dad sat me down and taught me about finances. It was super simple. He drew a line and wrote 'assets' and 'liabilities.' He listed the assets that will build value and the liabilities that will lose money. The dream car I wanted was going to lose value."

Charles Omenihu #94 of the Houston Texans and Whitney Mercilus #59 react after hitting Tom Brady #12 of the New England Patriots in the fourth quarter at NRG Stadium on December 1, 2019 in Houston, Texas.

Tim Warner | Getty Images

Athletes are not alone when it comes to spending on vice. According to a CNBC and Acorns Invest In You Spending Survey released last July in partnership with SurveyMonkey, 28% of respondents admitted to spending more than $200 on takeout each month. It was followed by vice spending, including alcohol (10%), tobacco (8%), live entertainment and sporting events (7%), and gambling (4%).

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The time value of money

McLean wants his clients to think about time when they spend their money. "A $50,000 watch may cost $300,000-$400,000 in time value of money," he said.

Time value of money is the concept that money earned at the present is more valuable than an identical sum at a later date; because the present sum has time to earn interest. 

Mercilus still does not own his dream car, but that does not mean he hasn't had his trouble managing spending on indulgences. Like Lebron James, Whitney is an amateur sommelier with receipts to match. "I had these ridiculous bills, like $1,500, $2,000, because I just love wine," he said.

McLean suggests that anyone who is passionate enough to spend thousands of dollars on vice should take the time to educate themselves about it. Spending smartly and learning about the vice you enjoy could reduce your costs. For McLean, it is important to enjoy these experiences, but at a reduced cost that does not impede long-term financial goals. 

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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.