Dumb Money: Smoking

by Kevin on July 15, 2008


(Photo by Subliminally Obvious)

This is a continuation of my Dumb Money series. Other tales of Dumb Money? The Gym, The Lottery, and Too Much Cell Phone.

Facts pulled from TheTruth.org:

  • In 2006, over 5 million people around the world died from tobacco products.
  • About 90% of all lung cancer deaths among U.S. women smokers are caused by smoking.
  • Tobacco kills over 20 times more people than murder.

Smoking and tobacco has been linked to various types of cancer. Very, very bad stuff. I was kind of surprised that is kills 20x more people than murder each year.

That’s all well and good, but apparently some people could care less about the risk of cancer.

When I first graduated college I took a job with a rental car company here in town. During my first day of work at a large branch, four of the twelve employees working asked me if I smoked.

This is how all four conversations went:

Employee: You smoke? (walking toward back exit)
Me: No
Employee: Oh, really? Don’t worry. You will.

I kid you not this is how all four conversations went. I thought they were playing a joke on the new kid. I would soon find out that a majority of the employees in the branch (and at least our city) smoked.

The excuse to smoke was the job was so stressful. I’ll give them that, it was stressful. I just have better ways of dealing with my stress than increasing my chances of premature death via a horrible, life sucking disease.

Smoking is a Financial Cancer

I sat down with one of my branch managers during my tenure with the company. She was making good money and blowing through it like no one’s business. I set out to help her with a budget. When the line item for cigarettes came up she estimated she spent a minimum of $200 on cigarettes each month. This was on top of eating out, going to bars on the weekends, and simply blowing her money while student loans and credit card debt piled up. She shared a rented house with two roommates. Her cost for utilities and rent were ridiculously low. Yet the money burned a hole in her pocket.

Let’s look at what $200 per month can do:

  • Pay off $2,400 worth of debt in one year
  • For most people, $4,800 would also be a rather healthy start to an emergency fund
  • If you earned 7%, over thirty years that $200 per month would turn into $243,994.

Plainly put, her smoking was a financial cancer for her. It was also a symptom of other serious problems (blowing $1,000 per month on eating/drinking out). That $200 per month (minimum) cancer was slowly killing her odds at a secure financial future.

That may seem outlandish, but in my opinion also true. We could argue if $200 per month on cigarettes is significant or not in the long run … but it’s $200 on cigarettes. As I said, it was a sign of other issues in her financial life.

Smoking. $245,000 in the future. Seems like an easy choice to me…

Cancer is a Financial Drain

This goes without saying: cancer is a terrible ailment. For some people, genetics or plain bad luck puts them on the wrong side of the equation. Smoking is just asking for it. And last time I checked, cancer wasn’t a cheap and easy fix. It can completely drain your finances and put you into medical debt.

It’s just one choice. One, little, $200 per month choice. Yet how serious are the consequences? Not only financial problems stem from smoking. A whole range of health problems can be linked to tobacco use.

Smoking Addiction is Similar to Debt Addiction

One more quick note — addiction is similar across issues. “I’ll stop tomorrow.” “I’ll quit next week.” These phrases could be about smoking, and they could be about your credit card use.

Either way: make the smart decision. Don’t be dumb. Stop the habit. Do whatever it takes to quit.

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Carnival of Personal Finance #162 : Carnival of Personal Finance
July 21, 2008 at 10:02 am
Growing Money » Blog Archive » Carnival of Personal Finance #162
July 23, 2008 at 10:23 pm
Bookmarks about Smoking
August 13, 2008 at 11:00 am


Blake July 15, 2008 at 4:47 pm

Ugh, your picture on this post really makes me want to vomit!

I absolutely cannot understand why SOO many people who desperately need to do everything in their power to improve their finances puff away so much money constantly. It really upsets me to think about all the people out there who claim that they can’t provide for their children, yet smoke like a chimney.

I’m so glad Iowa recently bumped our per-pack increase on tobacco products from $.17 to $1.17. It might not deter those who are already addicted, but I hope it prevents plenty of younger people from making a huge mistake that leads to the demise of their health and finances.

Philip July 16, 2008 at 9:07 pm

I have always tried to follow bloggers math, but honestly, how does $200 per month pay off $4800 per year in debt? Otherwise I completely agree but I have never smoked and grew up with a family that never smoked so it is just disgusting to me no matter the cost.

Kevin July 16, 2008 at 9:13 pm

@Philip: Wow. Good catch. Let’s just say it was really, really late when I wrote this post. My math gets a little fuzzy … it should now read $2,400 in debt.


- D July 27, 2008 at 10:09 am

Great article! At work, I’ve brought up that point to a girl that always complains that she’s broke.

She chain smokes, so that some big money during the course of a year that she could use towards her finances. She makes decent money, but smoking and drinking drains any hope of building up a cash to get ahead.

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