There's nothing wrong with enjoying a few luxuries here and there to make life enjoyable, but Americans are spending a small fortune on treats that are ultimately stripping them of the opportunity to save and use their money more responsibly. Here's a breakdown of what the typical American spends on nonessentials, according to a recent survey commissioned by Ladder:

The tendency to splurge consistently on nonessentials is causing Americans to skimp on other important items. Case in point: according to the same survey a good 38% of Americans claim they can't afford to fund a retirement plan because they don't have enough money. Meanwhile, 35% say they can't afford a life insurance policy, 28% can't afford to pay off credit card debt, and 26% can't afford car repairs.

All of this spending on nonessentials is also causing Americans to neglect their near-term savings. An alarming 60% of adults don't have enough money in savings to cover a $1,000 expense.

Set Priorities

If you've been in the habit of spending anywhere in the ballpark of $18,000 a year on nonessentials, then it's time to do better, effective immediately. First, set up a budget, which will show you what your various living costs really entail. Next, assess your savings, and see what it'll take to build a true emergency fund – meaning at least three months' worth of savings in the bank. Next, identify the financial holes in your life (no life insurance, no retirement savings) and figure out how much money you'll need each month to fill them.

Once you have that information, you'll need to play around with different scenarios in which you trim your spending on nonessentials and see where that leaves you. For example, if you're $1,000 shy of having three months of living costs in the bank, you might cut back on restaurants, drinks, lunches and takeout for a month or two until you've bridged that gap. From there, you might slash two of those expenses to pay for a life insurance plan, and cancel a streaming service or two and your gym membership to eke out money for a retirement account. It doesn't matter which expenses you cut, as long as you're getting yourself into a better spot financially.

Of course, if your savings are robust, you don't have unhealthy debt and you're able to consistently fund a retirement plan and pay for the right insurance, then by all means, spend $18,000 a year on nonessentials if you can afford to. But if you can't, you'll need to kick some habits quickly – before they destroy your finances for good.