If you're a smoker and looking to save money, quitting smoking is good place to start. Unlike canceling your cable subscription or buying generics, quitting smoking will put money in your pocket while also benefitting your health!
Costs of Smoking
• On average, a pack of cigarettes cost $6.36. Using this number, if you smoke one pack per day (20 cigarettes), you could save $2,321.40, or the cost of an engagement ring, after one year if you don't spend that money on cigarettes. Over three years you could save $6,964.20 - or about a 25% down payment on a new car. In five years (assuming the cost of cigarettes hasn't gone up), you would save $11,607.
• If you purchased a 20-year term life insurance policy for $500,000, it would cost between $570 and $1,035 in premiums yearly for a nonsmoking middle-aged man. It could cost as much as $4,240 for the same man if he smokes a pack a day. That's a difference of $3,215, or a week-long trip to the Caribbean.
• When trading in your car for a new one, car dealers will reduce the resale value of your car by about $1,000 for smoking damage, which is roughly the cost of a mortgage payment on a $150,000 house.
• Some studies suggest that smokers earn 4% to 11% less than nonsmokers because they are perceived to be less successful. This could equate to a $5,500 loss for someone who would earn $50,000 per year, or a maximum annual IRA contribution for workers under 55.
• Under the Affordable Care Act, premiums for smokers can be 50% higher than their nonsmoking counterparts. The same policy with a $300 per month premium for a nonsmoker can cost smokers $450, which equates to an additional annual premium of $1,800.
• If a 40-year-old smoker quits and puts the amount he or she would have spent on cigarettes into a 401k, he or she could save as much as $350,000 (assuming 9% annual rate of return) by the time he or she reaches 70 years of age.
• You could also put all of the money you save into a Health Savings Account (HSA). The money would accumulate tax-free, and you could take it out at a later date to cover your medical expenses (also tax-free).
Quitting really is a great way to save money. It's certainly worth serious consideration for you, your friends and family.
Posted Thursday, August 20 2015 1:23 PM
Tags : smoking, cigarettes, life insurance, saving money, health savings account
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