Summary: Between the cost of cigarettes and health-care-related costs, smoking can cost you over $1 million over the course of a lifetime.
Today we’re continuing our series on how being healthy can grow your net worth.
So far we’ve talked about how working out can grow your income and how you can save money by being the right weight.
Today we’re going to cover how you can save a bundle of money by not smoking. In fact, Money magazine says you can save $1 million. But we’ll get to that in a minute.
My History with Smoking
I have never smoked, but both of my parents smoked when I was growing up.
And they weren’t light smokers. I’m talking 1-2 packs a day. They did this for years — decades really, until they quit in their 60’s.
They tried to quit many, many times. They tried cold turkey, hypnosis, patches, and probably two or three other methods I’m forgetting. But the results were always the same: my dad would be strong and could have quit many times, but on day two my mom would start moping around. On day 3, she’d be crying. And by day 4, she’d be smoking again. Then my dad would start because he couldn’t stop if she was around and smoking all the time.
They would forget about quitting for two to three years or so and then the next method would come up with the same results.
Eventually it took my mom getting cancer and heart disease to stop them both smoking but it was after many years of puffing away.
My Son’s Friends
My son had some friends over from his work the other day. They were bemoaning the fact that they didn’t have any money for food, rent, to have fun, etc.
After they left my son and I were talking and I mentioned that both of his friends smoked. I started doing the math for him:
- His friends make $10 an hour
- They work 30 hours a week
- That means their weekly income is $300 and monthly is $1,300 a month
- This is gross of course, so taxes are taken from this
- The cost of a pack of cigarettes varies widely from state to state (because taxes are so different from one state to the next) — they range from $5 to $13.50 per pack. Here in Colorado they average $5.93 per pack
- Assuming my son’s friends smoke a pack a day at $5.93 per pack, that’s almost $180 per month (14% of their monthly expenses)
We talked about how much food, fun, and so forth his friends could buy with an extra $180 a month. It was eye-opening!
$1 Million Up in Smoke
Now back to that Money magazine piece that details the costs of smoking. Some highlights:
Lighting up burns a big hole in your wallet. Buy a $7 pack of cigarettes a day, and you’re spending $2,555 a year. Over 20 years your tab skyrockets to $93,987, assuming prices rise by 6% a year. Higher health care costs deepen the financial damage—besides lung, throat, and other cancers, the list of costly conditions tied to smoking includes heart disease, strokes, and diabetes. According to the American Cancer Society, tobacco-related health care costs are $35 for every pack smoked.
And that’s not all. You’ll pay more for life insurance, and studies have shown that your earnings can suffer. A new study from researchers at Stanford concluded that smokers make $5 less per hour, on average, than nonsmokers and need more time to find a job when unemployed. An analysis by the website WalletHub found that, on average, smokers will lose at least $1.1 million to the habit over a lifetime—in some high-tax states, that total is a staggering $2 million.
So, just like my son’s friends who lose a ton of their money by smoking, over a lifetime, smokers lose a boatload of money.
There’s not much more for me to say other than I just don’t get it. Don’t you think that if there was something you knew was costing you a fortune, would reduce the quality of your life, could impact the quality of life of those around you, and could even kill you that you’d give it up? Wouldn’t you do whatever it took to stop?
I’m sure there are some ESI Money readers who smoke and will hopefully share their thoughts with us.
photo credit: Røyking dreper / Smoking kills via photopin (license)
Coopersmith says
I am sure you can point out the cost saving of any vice.
Back in your parents day smoking and going out for drinks was the social thing to do and everyone was doing it.
I know people 20 years ago who gamble daily on the daily lottery numbers and mega millions, now a days it is going to casinos for an evening and blowing a wad of cash. IMO of them can’t really afford it because they don’t have much but it is the thought of hitting it big. One person even told me ” I don’t smoke or drink so this is my vice”. Ok then.
Maybe 10 years ago the latte factor was coined and showing how much just a simple latte will set you back financially. Proven point that little expenses add up.
I would say today’s vices are exotic places and experiences. People want to spend money on going places and experiencing things. I am sure in 5 to 10 years someone will be pointing this out this is the reason you are not saving money is because of these costs of “experiences” are really hurting your saving rate.
Point being is anything will all cost you money over time.
Jim Wang says
And vices are convenient targets because they’re generally considered socially unacceptable… but it’s really no different than any habit that costs money. That said, smoking is especially bad since it causes additional health costs down the road whereas knitting probably won’t create too many problems. 🙂
ESI says
Well, gambling, lattes, and experiences won’t kill you…that’s a big difference, as Jim notes.
This post is about health and finances and smoking impacts both. So it’s not just about spending on anything, it’s about spending on something that costs you both your money and your health.
If you want a post on why “small” spending can be bad, you can find it here:
https://esimoney.com/how-small-spending-can-add-up/
Coopersmith says
OK …My bad in not getting in tune with the post as it was early in the morning with my thoughts or lack there of …but what about all the sugar latte’s giving you diabeties or sugar drinks like soda’s,( a health issue) or over indulgent foods leading to obesity ( a health issue)or a gambling addiction (loss of sleep or suicidal thoughts mental health issue) Don’t forget stress of how to pay fore something…is that maybe better?
OK so trying to redeem myself here but it was a very rough day so please forgive….. grasping at straws… bleh… thank you weekend is here… thank you.
ESI says
Ha! No problem…I remember what those days were like. 🙂
Have a GREAT weekend!
Mike H says
Not to be controversial, but consider investing in tobacco companies. That way you are at least getting a dividend from smokers so that helps to take the sting out of the occasional second hand smoke you encounter. The fact is cigarette volumes continue to slowly drop but is offset by the annual price increases. And nearly all the cash flow generated gets paid out as a dividend back to shareholders. Take Philip Morris (PM) who owns the rights to these branded cigarette products outside the USA- their dividend yield is over 4% and they have grown their dividend by 2% the past two years given the strength of the US Dollar compared to foreign currencies- otherwise this would have grown at a faster rate.
But for an individual I agree that smoking is a huge waste of money. Even though it seems cool at the start, it is a poor decision and an easy habit to get hooked into.
-Mike
ESI says
I actually did this when I was younger and was picking individual stocks.
Most didn’t work out well, but the tobacco stocks always did.
It could be an interesting topic for a post — the ethics of investing. I know some won’t invest in tobacco, porn, alcohol, etc. and I’m sure we’d get a variety of opinions here.
JayCeezy says
Actually, lifetime healthcare costs are no different between smokers and non-smokers. That is because non-smokers die eight years sooner.
Okay, that was a joke. Seriously, younger people please consider this. Smokers are 17% of the adult population in the U.S. 4-year degreed adults are 8% of smokers. Something to consider when you are swimming in the dating pool and/or looking for a mate.
ESI says
Ha! Yes, that is true about healthcare costs.
personally, I always fall on the side of “spend your money however you like as long as you do it with intention (you actually make the decision that you want to spend on something)”. Smoking is the same. If people want to smoke, that’s their choice.
And yet it puzzles me that intelligent people would do something that they know is so bad for your health — not just killing you possibly, but hampering your quality of life along the way.
Perhaps the trade-off is ok with them. If so, again, that’s their choice. It doesn’t seem to be rational sometimes. I’ve had many conversations with my mom about why she used to smoke and I can’t really get a handle on the “why”.
Apex says
Because it’s more addictive than cocaine. It’s not a rational choice but logic is not involved with addiction.
And we have known this for 30 years. Here is a NY times article on it from 1987. Since then we have only discovered that it is even more addictive.
http://www.nytimes.com/1987/03/29/magazine/nicotine-harder-to-kickthan-heroin.html?pagewanted=all
The question isn’t why someone keeps smoking or cannot seem to quit even when they try. They are addicted. That is why your parents found it so difficult to quit.
The question is why do they start.
Usually it is peer pressure and what is the cool thing to do or the rebellious thing to do, etc. The peer pressure to smoke is not as strong as it used to be. That is why youth smoking is decreasing. But peer pressure never goes away. It just shifts to other things.
Want to help your kids? Try to have an influence or guide who they hang around with. The scary truth is that peer pressure is often a bigger influence on them than you are.
Most people have probably heard the Jim Rohn quote that, “you are the average of the five people you spend the most time with.” …. So are your kids.
Apex says
ESI,
I just wanted to clarify that this comment about kids is not directed at you. I realized after I posted it that the way it is written it could come off that way. It is directed at everyone including myself, perhaps mostly myself. I am actually frightened sometimes that I won’t be able to keep them from having enough negative outside influences.
ESI says
No problem. I did not take it personally.
I am aware of the peer pressure issue. Through most of it with one kid, but the other is testing my limits. 🙂
Jack Catchem says
I don’t smoke, but based on my time in the Marine Corps, I was around a lot of smokers. With so little of the population smoking, we lose an easy insight into character.
Here are three examples I observed in Iraq and Afghanistan:
1) some cache’d large amounts of cigs and would never share. This man is a survivor and expects you to look out for yourself.
2) some would share when they had it and borrow when out. This marine is connected to the unit through good times and bad.
3) some were always smoking but never had their own. Beware of vampires!
Without cigarettes to give away personality types I have to work harder to analyze those around me. Oh well. 🙂
Jon @ Be Net Worthy says
To your point about investing in tobacco companies above, I think it was Warren Buffet that said he loved them because cigarettes cost pennies to make, sell for dollars, and are addictive. What could be better?
The cool factor is the issue. Having two high school aged kids right now, I see it play out from week to week. The pressure to fit in and be cool can be very intense. Luckily smoking tobacco isn’t as cool as it used to be.
Troy says
I don’t smoke but I used to years ago.
It is expensive and it does create issues.
But it does not reduce your quality of life.
Quite the opposite in my opinion.
I thought smoking was great. Like many people think drinking is great.
Great way to wind down, take a break, relax, take a 5 minute break with friends or spouse, etc
But after having a smoke (or a pack), I could still drive a car, go to work and operate machinery.
And after several smokes I didn’t get belligerent and loopy. Like some do with alcohol.
What I have never understood is the bad social stigma for tobacco, but the social acceptance for alcohol, which causes all types of issues as well and kills people, sometimes strangers, instantly when driving . There is even an entire industry of music (country) and several sports “enhanced” by drinking beer.
That said quitting is a smart idea. But quitting all vices is a good idea.
PatientWealth says
Great post. Smoking is bonkers and horrible. But thankfully we have the freedom in this country for people to make their own decisions. It’s great to lay out the numbers and calculations so people can see how much it is really costing.