With the cost of a pack of cigarettes hoovering at an average of $6 in Ohio, there little room for argument that smoking isn’t a costly habit. At that price, a pack a day habit would cost you more than $180 a month, or $ 2,190 a year. But the cost of cigarettes is only a small percent of the total financial costs. Although your health should be the biggest reason for quitting, consider the additional money spent because of smoking – hidden costs that arise due to increased risk as well as the deprecation of personal belongings. SavingAdvice, a personal finance website dedicated to teaching ways to save money, has estimated various hidden costs of smoking at http://www.costofsmoking.com/index.html. Their findings (summarized below) may surprise even the most savvy money manager.
Insurance costs more. Because smokers are less healthy, are more likely to experience fire damage to personal property, and die earlier, insurance companies charge smokers more for health, house, and life insurance. In addition, car insurance premiums are higher because smokers are more likely to get into car accidents than non-smokers. How much more does a smoker spend on insurance every year? All told, it is estimated that $1,500 more is spent per year on insurance by smokers than non-smokers.
Health and Dental Care costs more. It should be no surprise that smoker’s physical and dental health is not as good as non-smokers. It is estimated that a smoker will spend $120 more per year on dental health and $420 more on medical treatment and related mediation than their non-smoking counterparts.
Cigarette smokers always leave behind smoke, and sometimes stains, and burns. Household items, especially upholstery, drapes, and carpets, absorb and hold the strong odor of cigarette smoke so there is increased cleaning, repair, replacement costs – a cost of approximately $300 more a year. Even more impactful is the lower re-sale value of the house and car of a smoker. The depreciation of a house and a car, can add up to $2,200 per year in hidden costs.
In addition to these out-going dollar costs, studies have shown that smokers earn 4% to 11% less than non-smokers. A recent study in JAMA Internal Medicine (http://universityofcalifornia.edu/news/smokers-struggle-find-jobs-get-paid-less) found that not only did smokers find it more difficult to find work, they also earned an average of $5.00 less per hour than nonsmokers. In addition, smokers receive less in retirement income than non-smokers due to their lower income and shortened lifespans.
And then there’s the impact on personal savings. Because a smoker spends over $2,000 a year on cigarettes and an estimated $6,000 on additional hidden costs, these dollars are not available for saving or investing. That means a loss in potential dollars earned in interest on $8,000 every year. Even at a conservative interest rate of 3.5%, this would result in lost earnings of $280 per year. Saving $8,000 a year ($666 per month) over 60 years at 3.5% compounded annually would result in a lifetime loss of over $1.5 million dollars for a smoker. That would go a long way toward financial security in retirement.
If you smoke, consider all the dollars spent on smoking, not just the cigarettes themselves. Smoking puts a significant strain on personal finances and future financial security, and then there are the health implications. Did you know that on average, a woman’s life is shortened by 14.5 years if she smokes? That’s only one small fact of many regarding smoking’s health implications . . .