Stop Smoking Your Fiscal Life Away

Smoking is bad for you – surely by now you know that. But smoking is bad for more than just your physical health. It’s terrible for your financial health as well. Let’s do the math. For the sake of estimation, we’ll assume that you’re smoking a pack a day and you’re likely buying your cigarettes a pack or two at a time from a local store, not an online or duty-free marketplace.

Generally, cigarettes cost upwards of $5 per pack. In New York they can be as much as $13 per pack. If you smoke a pack per day, you’re spending a minimum of $150 per month on cigarettes. You might be spending as much as $400 per month. If you smoke more than one pack per day, you can double that cash outlay – now you’re paying as much for smokes as you would for rather expensive new car. That’s a lot of money on a vice.

Sucking Away Savings

Let’s assume you smoke a bit more than a pack a day on average, and you’re spending about $400 per month. Health concerns aside, the money you’re spending now can be considered an entertainment or a hobby expense if you’re already taking care of your personal finances responsibly. But since most Americans aren’t saving enough for retirement according to a recent study by the Employee Benefit Research Institute, it’s more likely that you’re not taking care of your financial business well enough.

In fact you might be one of the many Americans living paycheck to paycheck waiting out the recession. Yet how many of us though lived paycheck to paycheck even before the recession?

If $400 of your monthly income is going to cigarettes every month, you’re not only wasting money on something terrible for you, you’re also suffering from a huge missed savings opportunity. $400 per month is all you really need to save up for a much safer, more secure retirement – and that’s probably something you’ve been meaning to do, but haven’t actually started yet.

Saving, Not Smoking

If you were to stop smoking today and stick every dollar you would have spent on the cigarettes into a big jar somewhere, you’d have saved $144,000 in thirty years. Right now the average American has about $20,000 saved for retirement, so you’d be well ahead of the game. If you were to put that money into a safe investment like treasury bills or a savings account that pays out about 3 percent in interest over those thirty years, you’d have $235, 759.

Invest that money into a balanced portfolio with 8 percent interest over those 30 years and you’d have $639,000 at your disposal at retirement. That amount would pay you more than $3,600 per month for twenty-five years to add to your Social Security check every month (assuming Social Security still exists, of course.)

There are smaller savings along the way. When you’re saving money in a balanced portfolio, you can stash it away through an IRA, and earn a nice tax deduction from the government each year instead of paying the insane taxes that continue to rise on the cigarettes you smoke now. That’s not to mention the amount of money you’d save by needing less health care as you grow older without the influence of cigarettes on your well-being.

All told – the cigarette you’re smoking now might pay for a couple months of retirement in a few decades. Is it really worth it to light up?

Rebecca Garland is a professional freelance writer working hard to populate the internet with meaningful, interesting content. With advanced degrees in information science and business, Rebecca enjoys a variety of topics ranging from the current state of the educational system to money saving ideas like using the electronic cigarette to break the tobacco habit. Learn more about Rebecca on her professional website,

Leave a Reply

Your email address will not be published. Required fields are marked *